It’s an unprecedented – and massive – experiment: Since 2017 the U.S.-based charity GiveDirectly has been providing thousands of villagers in Kenya what’s called a “universal basic income” – a cash grant of about $50, delivered every month, with the commitment to keep the payments coming for 12 years. It is a crucial test of what many consider one of the most cutting-edge ideas for alleviating global poverty. This week a team of independent researchers who have been studying the impact released their first results…

  • OldWoodFrame
    14·
    11 months ago

    But the big news came on a different measure: people’s likelihood of starting a business. On this front, those who got the money in a lump sum vastly outperformed people who were promised the same amount for just two years but received it in monthly installments. For instance lump-sum recipients had 19% more enterprises – businesses such as small shops in local markets, motorbike taxis and small-scale construction concerns. And the lump sum recipients’ net revenues from their businesses were a whopping 80% higher.

    Interesting that a lump sum worked better but it makes sense for those starting businesses, you need to invest.

    Other points:

    Giving to everyone in a town seems to be useful because everyone knows everyone else has additional income, so there may be a market for the new motorbike taxis or whatever. That makes sense to me too.

    Also, no inflation. Some of that might be because it was only a town and you can always go to the next town over. But it might also be because inflation is “too many dollars chasing not enough goods” and when they started businesses, they produced more goods. So it balanced out.