Aid, and how it is administered and used, is a huge subject. There is a whole industry around the delivery of aid, global transport networks, ambitious programmes and huge multinational experiments. But as writers like Dambisa Moyo or William Easterly have been at pains to point out, the legacy of aid is pretty mixed. $2.3 trillion has been sunk into aid projects in recent decades. It would be an exaggeration to say that nothing has been acheived, but it certainly doesn’t look like value for money.
That’s prompted a simple but radical suggestion – what if we skipped the middle man? 1.5 billion people live on less than $1 a day. Couldn’t we just give them an extra dollar or two?
It’s an idea that’s been taken up by many of the larger developing countries, including Mexico, Brazil, India and South Africa. There are many ways of delivering the funds, but a typical scheme would involve a small amount of money given to the mother of a household, for paying for education or healthcare, or whatever is needed. There is an ongoing relationship with the family, so that it is clear how the money is used and whether it is working or not.
It’s an approach that empowers the poorest, giving them choices. It lets them decide what they need, in what order, rather than enrolling them in a programme to have things done for them. So far, the schemes have been very successful. A new book, Just Give Money to the Poor: The Development Revolution from the Global South, by Joseph Hanlon, Armando Barrientos, and David Hulme, explores the phenomenon. Barrientos explains the theory here, and Oxfam’s Duncan Green reviews the book here.
Giving your citizens money isn’t actually a particularly foreign concept. We have child benefit in the UK, a flat sum granted to every household with children. Some direct transfer schemes operate like pensions. In that sense, cash transfers sound less like a new idea in aid, and more like a re-invention of social welfare for the developing world. If that moves the power from Western aid agencies to the poor themselves, then it could be a very significant shift in the story of development.