Basic Income/Negative Income Tax

The Universal Basic Income: Innovative Social Welfare Reform or Satanic Plot?

An experiment in international aid hits a snag.

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Kitab al-Bulhan | wikimedia

The more sour critics of the basic-income movement have occasionally called it a cult, but I didn't think any of them meant that literally. Until now.

Basic-income proposals come in several forms, but the key idea is to center social welfare policy around giving people cash, without attaching conditions that restrict how the money can be spent. GiveDirectly, a U.S.-based charity, has spent several years distributing funds in different East African communities in this anti-bureaucratic manner; one of their aims is to measure the idea's effectiveness. (So far, the results have been positive.) Last month they extended their operations to Homa Bay, a county in Kenya.

There they hit a snag. Elsewhere in Africa, only 5 or 6 percent of the people asked to participate in the program have said no. In Homa Bay County, nearly half turned them down. "As it turns out," Will Le recounts on GiveDirectly's blog, "these challenges have been common for NGOs working in the area. Other development programs focused on HIV, water and sanitation, agricultural development, education, and female empowerment have also faced community resistance."

In Homa Bay County, apparently, the locals are more likely to suspect ulterior motives when someone shows up and says he'll give them something for free. "Potential recipients find it hard to believe that a new organization like GiveDirectly would give roughly a year's salary in cash, unconditionally," Le writes. "As a result, many people have created their own narratives to explain the cash, including rumors that the money is associated with cults or devil worship."

I know virtually nothing about Homa Bay County's culture and history, so I won't speculate about why the people there are more suspicious than in the other communities GiveDirectly has helped. But I can say pretty confidently that it isn't the only place where outsiders bearing gifts won't be trusted, and that any experiments in such transfers' effects will eventually have to take those cultural differences into account. Business Insider reports that GiveDirectly is now thinking about "comparing results across villages where acceptance rates have differed." That's certainly sensible, but a bit of digging into why those rates are different would be wise as well.

(Clarification: While GiveDirectly has plans to launch a full-fledged basic income pilot program, in which members of an entire community receive a long-term income that is enough to live on, the program sparking rumors in Homa Bay County is a more modest set of conditionless cash transfers aimed at the neediest families in the area. I tend to use the phrase basic income loosely—maybe too loosely—as a catchall term that covers a range of related policy ideas; I don't want to conflate these two projects in the process.)

Bonus video: ReasonTV interviewed GiveDirectly co-founder Paul Niehaus last year: