November 30, 2010 1:09 PM   Subscribe

Just Give Money to the Poor: bypass governments and NGOs and let the poor decide how to use their money? Should recipients be asked to satisfy conditions? Does it only work well in rural areas of developing countries? Found via this socialist rag; mentioned here first by this puny human.
posted by vertriebskonzept (30 comments total) 8 users marked this as a favorite
Funny thing, this is basically what I thought "international aid" was until I was in high school.
posted by theodolite at 1:18 PM on November 30, 2010 [1 favorite]

We been just giving money to the rich for decades
posted by 2bucksplus at 1:23 PM on November 30, 2010 [3 favorites]

Just Give Money to the Poor

may require a name change for this one to catch on
posted by nathancaswell at 1:26 PM on November 30, 2010 [1 favorite]

Does it only work well in rural areas of developing countries?

yeah I was gonna say, probably works great in the sticks, where everybody is poor, but in urban areas where wealth inequality is gallingly and ubiquitously visible, something more than cash will be needed.
posted by toodleydoodley at 1:53 PM on November 30, 2010

Well I have been a big fan of this idea as a tool of social programs / social welfare needs for a long time, for a lot of reasons, but one of the great things about such an idea is that much of the extraneous fat built around bureaucracies of government and NGOs that distribute services indirectly - social workers, bureaucrats, policy makers, significant brick & mortar, etc. - can be eliminated.
posted by RajahKing at 1:54 PM on November 30, 2010 [1 favorite]

Interesting. I can see why it wouldn't work as well in cities. Too much stuff to spend the money on, or something.

Still, paying parents to make sure their kids are educated is a good idea. But what happens after all those educated kids grow up and find no economic opportunities?
posted by delmoi at 2:00 PM on November 30, 2010

This proposal (as presented here, anyway) seems big on anecdote and short on data. For one thing, you're not actually by-passing governments and NGOs. That charming Vietnam story features Oxfam and the CCTs mentioned involved the NYC and Brazilian governments, not exactly Mom & Pop start-ups.

That's only the start of the problems. If the idea is to cut-overhead, then this ain't going work. Someone will have to administer the disbursements, and, in the case of CCTs, determine eligibility requirements. If the idea is stop trying to give poor people what NGOs and governments think they need, and instead allow them to determine for themselves how to invest charitable donations, well then it's a start. But there are problems inherent in this as in inherent in any welfare system (which is essentially what this is, gone global and subsidized by donations). Abuse of the requirements, dependency, and who actually controls the money are just the start of cracks in the system that would need to be constantly patched.

That's why aid organization are so big on projects like, "Build x-amount of schools" and "Disperse x-amount of grain." You may not be targeting the precise needs of the community served, and even ignoring the needs of certain individuals and groups, but you provided a service you determined was needed and they can take it or leave it. Keeps the donors happy. Same deal with food stamps and subsidized housing. This is the reverse, in that you are providing something you know will be used (cold hard cash), without control on it's use.

I don't want to sound like I don't think these programs should exist, I just don't think we should not delude ourselves into thinking this is some brilliant new innovation in charitable aid. After all, we've had programs like these in the States since FDR and LBJ, we just call them them exotic names like "Welfare" and "Social Security."
posted by Panjandrum at 2:08 PM on November 30, 2010 [3 favorites]

Related, in the Economist earlier this month: The most efficient way to spend money on the homeless might be to give it to them
posted by gaspode at 2:09 PM on November 30, 2010 [2 favorites]

I think the important thing here is not about the money itself but rather a shift in thinking from "we know best" to maybe the people we are trying to help might know what they really need. This thinking has yet to penetrate the brain trusts that run many large NGO's.
posted by Xurando at 2:17 PM on November 30, 2010

I put this idea into practice and gave a $20 to the homeless dudes hanging out on the steps outside. When I came back from lunch, they had purchased a 40oz of Mickeys. I gave them a thumbs up for participating in the new world order.
posted by Foam Pants at 2:22 PM on November 30, 2010 [4 favorites]

Eliminate the middle men? That way lies tea party anarchy. What will you do with all the out-of-work "non governmental" organizations?

Or this.
posted by chavenet at 2:28 PM on November 30, 2010

So how do we keep organized crime from getting its hands on the money?
posted by Grimp0teuthis at 2:31 PM on November 30, 2010 [1 favorite]

Outside of a corrupting influence, eliminating a middle-man does the most for both the poor folks and the community (read: economy). As we've seen, poor folks, even the poorest, will generally spend money on things they need. The occasional luxury, perhaps, but it's by-and-large food, clothes, and hygiene. Having need that exceeds their wealth, they spend the money quickly, and it circulates through the economy. Richer folks are likely to hold onto the money for a longer period of time, and the money will filter through the economy more slowly.

But there's that thing I said about "a corrupting influence." Where there's easy money, there are warlords, drug dealers, and other greedy bastards. It's important to make sure that the recipients will actually get to spend the money themselves, and that the recipients aren't being preyed upon, and are able to make intelligent decisions about how to spend it. Giving folks money does no good if McDonalds is popping up wherever money's going.
posted by explosion at 2:43 PM on November 30, 2010 [1 favorite]

In the U.S., we've not even manage to keep organized crime from taking most of the federal student aid, Grimp0teuthis. So I suspect your answer is : we fail.
posted by jeffburdges at 2:52 PM on November 30, 2010

If corrupt governments divert aid, won't they just follow the poor out and "tax" them? This seems like the ultimate in aid diversion problems short of the "give poor people AK47s" program.
posted by a robot made out of meat at 3:20 PM on November 30, 2010

I disagree with "giving money to poor people." I think it's better to subsidize services that improve the productivity and quality of life of poor people. Services like education, medical care, public transit, police, and psychological services.

You might say that poor people could pool their resources to provide these services locally, but I think that government 1) is in a much better position to make value decisions because its ministries have longevity, which entails more experience; 2) has a larger pool of resources (money, people, land, etc.); and 3) a national monopoly eliminates work duplication, and the need for advertising.

In general, I think poor people will spend money directly on repaying debt. "Rich" people are never going to accept this use of public funds because poverty (and the fear of poverty) drives productivity. It forces people to work rather than spend time at the beach or with friends or reading.

So, on the one hand you can improve the lives of the poor by giving them money, which they use to reduce the work they do, and thereby, you directly weaken the economy. Or, on the other hand, you can use it to provide the services I described, which in my opinion, are human rights, and so improve the lives of the poor without reducing their need to work, but in fact, magnifying their productivity.

(If you measure productivity in solely economic terms, then maybe you would deliver low levels of services, such as a baseline education that is bare literacy. Clearly, effective participation in democracy requires a much higher level of literacy. Maybe with careful focus on what "effective" members of society are, you would end up with good service levels.)

Also, this is not a categorically good reason to allocate money:

Having need that exceeds their wealth, they spend the money quickly, and it circulates through the economy. Richer folks are likely to hold onto the money for a longer period of time, and the money will filter through the economy more slowly.

Yes, during a recession, you want to increase the velocity of money, but during an inflationary period, you want the opposite. It's not like money given to poor people is somehow less of a gift because "it goes back into the economy." All money goes back into the economy; the time it takes to do that affects the money supply, which affects inflation/deflation, either of which can be bad.
posted by esprit de l'escalier at 3:20 PM on November 30, 2010 [2 favorites]

Three years ago at Christmas, I walked around downtown Chicago on a terribly windy day and handed 20 dollar bills to homeless people and took pictures with them.

I gave my family the 8x10 framed photos as Christmas presents along with a note explaining what happened to the money I was going to spend on them. I'm bad at gift giving anyway, so they weren't missing out on much.

The homeless people in question seemed to agree with this philosophy. One of them was delighted that he was going to be able to spend the night in a motel with the money. I suppose I didn't lift him out of poverty, but he got a good night's sleep in a warm bed. That's pretty great. It was certainly a lot more satisfying to everyone involved than if I'd put coins in a jar somewhere.

Try it!
posted by swellingitchingbrain at 3:23 PM on November 30, 2010 [4 favorites] of the great things about such an idea is that much of the extraneous fat built around bureaucracies of government and NGOs that distribute services indirectly - social workers, bureaucrats, policy makers, significant brick & mortar, etc. - can be eliminated.

RajahKing: Why do you hate the poor?
posted by ZenMasterThis at 3:52 PM on November 30, 2010

what happens after all those educated kids grow up and find no economic opportunities?

They join fundamentalist religious sects or political fringe groups and become fanatical terrorists, of course.
posted by IndigoJones at 5:07 PM on November 30, 2010

@swellingitchingbrain, I live in Chicago, too.

A long time ago, I "adopted" a homeless person. Her name was Helen. I bought her food--she preferred Cheez-Its from Walgreen's--and gave her cash routinely. Over time, though, I realized that Helen was a congential liar. I never blamed her for that. She was a decent person conditioned to say whatever might bring her a buck.

The last straw for me was when she asked for money to bury her daughter, who by my count had just died for the third time.

From that day forward, a decade ago, I have never given a penny to a street beggar. Instead, I give to the Tribune Holiday Fund, which gives to organizations that help those in need. Their foundation covers administrative expenses, so every dollar donated goes directly to programs.

Chicago, my adopted home town, has been good to me, and I give back until it hurts. But to dole out cash to the needy on the street? Never again.
posted by Short Attention Sp at 5:53 PM on November 30, 2010

Aid - public policy in general - is complicated, unique, and deeply contextual. I'm totally not a fan of any "rules" for any kind of public policy, especially aid - where it's typically driven more by the mores of the donor than the recipient.

No doubt, giving directly is very effective in some situations, and totally ineffective in others. Certainly, it's one of the many options on the table when it comes to policy development, but as many people have alluded to, there's a lot of assessment and consideration to take place before it becomes the option.

That makes for a fairly boring news story, but hey, good policy often does make for a poor news story, with its ambiguity, refusal to be easily broken down, and reliance on expertise, and inability to be broadly applied. May it ever be so.
posted by smoke at 6:42 PM on November 30, 2010

I don't know. There seems a real risk that the money will just be hoovered up by corrupt governments, charlatans, or criminals. Corruption is often a huge problem in region with poverty, and money is just so easy and profitable to steal. Food is more difficult to make off with - it's bulky and not terribly profitably without a large volume. Services can be nearly impossible to steal.

I'm concerned that small-scale tests of this idea may not accurately represent this, because the criminal networks don't mobilize effectively to rob the population when small amounts of money are involved for short periods of time. If you tried it over longer periods of time, I think it would pretty much just end up splitting up most of the money up between the government and the mafia (in those places where they are not one and the same.)
posted by Mitrovarr at 7:02 PM on November 30, 2010 [1 favorite]

We been just giving money to the rich for decades

That should have been the end of this thread.

And, even if you hate poor people, according to the Congressional Budget Office, just giving them money is more stimulating to the economy than bank bailouts.
posted by clarknova at 7:14 PM on November 30, 2010

I live in Hanoi, Vietnam, which is the nation's political center, and thus crawling with NGO's. I know plenty of westerners who work for NGO's. Most of them mean well.

But these organizations waste so much money on infrastructure, which is often duplicated for every podunk NGO. I see the UN and NGO people driving round central Hanoi in Toyota Landcruisers, jacking up the rents everywhere they go by not negotiating prices, sending their kids to expensive international kindergartens or the UN International School (fees $20,000 US / year).

That waste is compounded by the fact that international staff are typically only here for a year or two, which is barely enough to start to understand the local culture. They may only start to be productive at the very end of their tour, then they leave shortly afterwards.

And that's just the westerners. The local staff earn good salaries too, and by and large they're the children of the elite here (those are the only ones with the connections and language skills).

The UN has mostly gotten out of the business of directly implementing aid projects, so I hear. That's a good thing. My wife's village is dotted with concrete cisterns built at great expense by the UN far from any source of water. Sure, they're fun for kids to play on, and you can use the tops of them to dry rice, but they haven't ever contained water as far as I know.

Just an anecdote, I know, but there are plenty more where that came from.
posted by grubby at 8:24 PM on November 30, 2010 [3 favorites]

CCT is interesting but too many requirements. What about just a straight unconditional guaranteed income program? Are there any other programs like the Basic Income Grant (BIG) project in Ojitvero (Namibia)? I didn't see it mentioned in any of the links though I might have missed it. Not a large population and rural so who knows how it would work on a larger scale, but I think it's interesting.
posted by Danila at 9:55 PM on November 30, 2010

This works great in Australia. The government holds on to half of peoples' welfare checks and tells them what they're allowed to spend it on, and makes receiving any money at all contingent on jumping through a number of hoops.

Well, black people, anyway.
posted by obiwanwasabi at 12:58 AM on December 1, 2010 [1 favorite]

But these organizations waste so much money on infrastructure, which is often duplicated for every podunk NGO. I see the UN and NGO people driving round central Hanoi in Toyota Landcruisers, jacking up the rents everywhere they go by not negotiating prices, sending their kids to expensive international kindergartens or the UN International School (fees $20,000 US / year).

This is interesting to me because my job for the past 3 years (which I've spent in Haiti and various African nations pretty much exclusively) has been to change this kind of thing, at least specifically within my own NGO.

My job is particularly in modernizing our various Supply Chain Management (SCM) functions, taking things like procurement / sourcing, centralizing and streamlining them, bringing more visibility and accountability to what we are spending our donor dollars on, how, and why. Highlighting who is making those decisions, and how they are selecting their suppliers, and is there anything sketchy going on in the process. That's just procurement. We also look at deliveries / receipt / handling of goods / confirmation of final beneficiary receipt in the field.

Vehicle Fleet Management (VFM) falls under my fold as well: what kind of vehicles are we buying, from where, for how much? Why? How are we using them? How is fuel purchased and tracked? How are we maintaining our fleet and who do we pay to do it and why? Where do we get the spare parts? Who really needs to drive a $60k Landcruiser because they work in some of the most remote areas in the world (see the recent FPP on driving through the DRC), and who can get by with a Hilux Doublecab or perhaps an even simpler vehicle?

My job is to show up in our Regional and National Offices and shift the age-old approach towards one of maximizing our organization's economies of scale (procuring the LC's / spare parts / building materials / et. al. in bulk when we can, etc.) while simultaneously trying to balance the development of local markets at the same time. All of this while trying to bird-dog corruption out of our dealings with suppliers, and eliminate not necessarily corrupt but suspect practices within our organizations (every staff member needing a LC).

Suffice to say I am not a very popular person in my organization. But I think my work is important and it shows not in hundreds of thousands of dollars in savings but in the millions, on a nation by nation basis, if I can muscle my way through the mountains of obstacles that are daily placed in my way to get my job done.

I've never driven a LC. Thousands of them are driven by our local staff in the field, and I've rode in plenty for field visits, but when I came on board we were initiating the change at our regional office levels to give staff monthly vehicle allowances and stop owning and maintaining such expensive vehicles for them. Mind you: vehicles are FRICKIN expensive in Africa, especially if you're not working for an embassy as a diplomat and thus exempt from paying duties. When I bought my rather modest vehicle here, a full 1/3rd (!!!) of the total cost to me was duties to the Kenyan government. After import costs, etc. - I'd estimate I paid twice what I would have paid for a comparable vehicle in the US. You can see why a lot of people were pissed off when we stopped the practice of the organization procuring and owning the vehicles for them. It was a personal nightmare for me to live for months, waiting on a delayed ship to come from Japan, but it was part of my new job.

So was negotiating the nightmare of a real estate market. grubby nailed it: decades of decadent expats with the UN and NGOs have driven rent prices for even modest locations in the big cities (Nairobi, Addis, etc.) through the effing roof. So, instead of having the Administrative staff here deal with a real estate agent and pay them whatever they want, I demanded to meet with multiple agents and bid them against each other. People were flabbergasted, some outraged - this may have been the first time an expat NGO worker had ever done this in the country. Maybe the continent. What followed was months of mucking through back-door handshakes, shady deals that staff had made with "friends" or maybe even family members with real estate agents. When I reported these things in detail to an effectively non-functioning HR office, I was treated as the trouble-maker. I guess I was. I eventually got a decent apartment at a good cost and pissed a lot of people off because they weren't going to be making their cut.

And that was just me. There's hundreds of us expats in these big cities with all the various NGOs and UN organizations. I've never met another one - not even one - with all the other organizations, with my strategic mandate to address the second highest categories of spend in our entire organizations (after salaries, I don't even want to think about that). I'm pretty sure my organization is the only one that has even identified it as a target area for improving our field operations. Probably because nobody in the organization wants to address it, if it means a change to their quality of life.

A lot of people in the developed world seem to be of the assumption that all NGO workers should live in mud huts with no electricity or running water or A/C or a decent vehicle to get around. This is incredibly maddening to me: here are the few and the brave willing to even GO to these places and maybe even LIVE in them for years on end, and because they're doing development work, the general expectation is that they shouldn't get to live a lifestyle of even comparable comfort to what they would back in their place of origin. People who think this way have clearly never been to or at least spent extensive time working in some of the hardest places on earth. No, not everyone should be driving LC's or living in lavish mansions, but clearly there has to be some more reasonable middle ground.

Most of the organizations I see infuriate me in this regard (and sometimes my own as well, but again - its my job to change that). I go to church and I see big lavish Landcruisers with the names of relatively small NGOs pulling up to church alongside the streams of people who don't have a car and have to walk to church. Last Sunday in Addis one of the families crossing the main road just outside the church itself had a child struck by a bus. These things aren't right. I go to the supermarket and I park my crappy little car that I had to beg and borrow out of the office where everyone else is driving LC's or Prados (because they're still fighting my change work), and I am surrounded by big white brand new SUV's from Toyota, Nissan, etc.. They all have the bright blue "UN" or "Unicef" or "WFP" logos on the side. Its maddening and at the same time deeply alluring - how nice it must be to just show up in that country and have a lavish lifestyle all arranged instead of having to fight through every transaction and justify your own costs and that of everyone else. But again - that's much job.

Most of them never bother trying to learn the language - on top of endless work I'm trying to pick up enough Kiswahili and Amharic and Shona and French and Kinyarwanda to at least begin to endear my local colleagues to me and make it clear I'm not there to point fingers but to help us drive more efficient programs that reach more beneficiaries. This means cutting infrastructure in our organization and so people smile at me only to my face. But at least I'm here and trying.

When I first came over I had these dreams of the big expat communities I'd engage with and network between and learn from and have friends in. That never materialized. They are here, but I'm not a welcome person in that group, because its my job to bring a big shift to the way things are done, and its one hell of a gravy train to slow down. Those that do stay long term are those that don't engage with the local communities, those that enjoy the Big White Vehicle lifestyle, those that don't want prying eyes into what's going on with all these millions and billions of dollars being poured in.

Do you realize that my organization, and most NGO's, and even the UN orgs in some cases are actually PAYING TAXES to the governments of the countries they work in? Typically in the form of Value Added Tax (VAT) for the goods they procure either in the country or internationally, and its usually anywhere in the range of 15-20%. And everyone just throws their hands up and says "TIA" and the government officials need their kick too. Some countries that I won't list are effectively having their governments run and funded by World Back, who actually requires this, or at least actively makes it difficult for the NGOs to pursue any kind of waiver with the government. Yeah, its my job to try and reverse that whole trend too. Not only am I hugely unpopular with my own organization, but with the governments of the countries I work with. My work is technically "right," but not really all that enjoyable to anyone.

I guess this is getting long and screedy so I'll try to wrap it up, but its been my entire life for a few years now and I feel like I'm trying to turn the titanic around with one of those plastic oars you get with a 2-man raft at Wal-Mart. Enough to feel like I'm pushing some water, and yet always know nothing's really going to change. And still its like I try to hold onto some hope - I'm not sure why, sometimes. Probably if it weren't for seeing the rather few and unique field implementations that are bringing real change to people who've never had clean water or a proper latrine or a school for their kid to go to. Even if it means the Big White Vehicle community has to be there having their share too.

The UN has mostly gotten out of the business of directly implementing aid projects, so I hear.

Yup. They've begun to outsource the actual field work to NGO's like mine, who in a typical year might distribute to end beneficiaries more of World Food Programme's food than WFP even will themselves. Why? We're already there in the communities with the warehouses and lorries and staff and infrastructure, and its what we do, and we're just plain better at it. There's nothing wrong with that, we (and all the other NGO's) aren't going to get it perfect but we will get it done better than anyone else can, and it will bring positive change in the communities we work in, if we're improving our internal systems and taking better stock of ourselves on an ongoing basis.

But, why the hell then do I still park in between 2 Big White Vehicles when I go out for dinner? What the F are they even DOING if we're doing their jobs for them?

Reducing the infrastructure is an absolute must, there will always be more to be reduced or at the very least questioned. Bypassing governments and NGO's is laughable even on its face. What are you going to do, throw a few bucks in an envelope and mail it to Malawi? Guess what, you just contracted with the USPS and Malawi's postal service as well and created at least that much infrastructure. How are you going to get the family's address? Hint: more infrastructure. There has to be some level of organization and intermediaries in the process to make it function well, its a fact of life and people continuing to try to buck it is neither new nor logical.

But there's a happy medium out there, and most of the developing world hasn't seen even the beginning of what that might look like.
posted by allkindsoftime at 6:27 AM on December 1, 2010 [9 favorites]

What's an "NGO"? I only started seeing this term a few years ago, in place of "Non-Profit Organization." Obviously, the initialism stands for "Non-Governmental Organization," but what does that mean? I mean, any organization (PepsiCo, the Catholic Church outside of Vatican City, the Mafia) is a non-governmental organization. How does an NGO differ from a non-profit? Or is this just jargon drift? "We need to come up with new names for things because the old names have entered the popular lexicon"?
posted by Eideteker at 7:56 AM on December 1, 2010

And yes, the point of aid-giving organizations is to pool the resources and put them to a collective greater good than would be individually possible. A public library rather than a book per person/household.
posted by Eideteker at 8:01 AM on December 1, 2010

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