Foreign Aid

A Universal Basic Income in Africa

An experiment gets off the ground.

|

GiveDirectly

Foreign aid has traditionally taken the form of in-kind assistance: sending meals or medicine, helping build houses or schools, and so on. This can lead to all kinds of unfortunate side effects, as when free food from abroad undercuts local farmers. There is also a recurring mismatch between what the planners in aid agencies think a community needs and what the people on the ground actually want. And so a small group of forward-looking aid workers has embraced a cheaper, more flexible, and less paternalistic approach: Just send people cash instead.

The leading player here is GiveDirectly, a U.S.-based charity buoyed by the rise of mobile payments, which have made it much easier to send people money without passing through political or bureaucratic middlemen. The group has been sending conditionless cash aid to East Africa for several years, with encouraging results. It is now preparing an ambitious experiment in a universal basic income. In this setup, everyone in several Kenyan villages, not just the neediest citizens, will be eligible to get money. (I reported on this privately funded experiment back in December, and you can read that story for an outline of the plan.)

Now The New York Times has published a dispatch from the first village to get the funds. Here's an excerpt:

The villagers had seen Western aid groups come through before, sure, but nearly all of them brought stuff, not money. And because many of these organizations were religious, their gifts came with moral impositions; I was told that one declined to help a young mother whose child was born out of wedlock, for example. With little sense of who would get what and how and from whom and why, rumors blossomed. One villager heard that GiveDirectly would kidnap children. Some thought that the organization was aligned with the Illuminati, or that it would blight the village with giant snakes, or that it performed blood magic. Others heard that the money was coming from Obama himself.

But the confusion faded that unseasonably cool morning in October, when a GiveDirectly team returned to explain themselves during a town meeting. Nearly all of the village's 220 people crowded into a blue-and-white tent placed near the school building, watching nervously as 13 strangers, a few of them white, sat on plastic chairs opposite them. Lydia Tala, a Kenyan GiveDirectly staff member, got up to address the group in Dholuo. She spoke at a deliberate pace, awaiting a hum and a nod from the crowd before she moved on: These visitors are from GiveDirectly. GiveDirectly is a nongovernmental organization that is not affiliated with any political party. GiveDirectly is based in the United States. GiveDirectly works with mobile phones. Each person must have his or her own mobile phone, and they must keep their PIN secret. Nobody must involve themselves in criminal activity or terrorism. This went on for nearly two hours. The children were growing restless.

Finally, Tala passed the microphone to her colleague, Brian Ouma. "People of the village," he said, "are you happy?"

"We are!" they cried in unison.

Then he laid out the particulars. "Every registered person will receive 2,280 shillings"—about $22—"each and every month. You hear me?" The audience gasped and burst into wild applause. "Every person we register here will receive the money, I said—2,280 shillings! Every month. This money, you will get for the next 12 years. How many years?"

"Twelve years!"

To read the rest, go here. To see some testimonials from the villagers, go here. And stay tuned—I've been writing a feature for Reason on the long, messy history of the basic-income idea. It'll cover GiveDirectly and a great deal more.

NEXT: The used car that came with a special option: A GPS device secretly installed by the police

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The idea sounds good until you realize this just makes all of Kenya a welfare state dependent on cash from others. Teach a man to fish etc.

    1. They’re just going to spend it on drugs.

    2. Real universal income is just another form of theft.

  2. I’m mostly curious to see how the concept is gamed when we read the post mortem two years from now.

  3. Some thought that the organization was aligned with the Illuminati, or that it would blight the village with giant snakes, or that it performed blood magic.

    Noo!

    Others heard that the money was coming from Obama himself.

    Nooooo!

  4. Hmmm. What happens when people from surrounding villages want in on the action?

    1. Spoiler alert: some nasty business involving machetes.

    2. Supposedly there’s some sort of control process, it may involve the racist use of IDs.

  5. Then he laid out the particulars. “Every registered person will receive 2,280 shillings”?about $22?”each and every month. You hear me?” The audience gasped and burst into wild applause. “Every person we register here will receive the money, I said?2,280 shillings! Every month. This money, you will get for the next 12 years. How many years?”

    “Twelve years!”

    Just like Oprah, except instead of a car you get $22 a month for 12 years.

  6. Fiat money, how does it work? If anything, this will just drive up local prices — and enable corrupt bankers who can easily game the foreign exchange market.

  7. Not a bad idea. I’ve heard that donated clothing and the like had kinda devastated the business of local clothing-makers, so giving everyone money directly seems like a better approach to charity than the usual model.

    1. I read the article. One of the things that was most interesting was that the area had a superfluity of tanks and Jerry-cans donated by a charity focused on providing access to water, which is great if there had been enough sources of water. As it was, they had plenty of cans but no plumbing.

      So far most people have used the money to fix their houses or start small businesses of their own. I have no opinion on this a a general rule, but at least the beginning is promising, and the village has a few houses in better repair and a couple new businesses.

  8. Giving people guaranteed free money leads them to indolence and dependency. Except for the entrepreneurial ones who’ll use the money to buy candy bars from three towns over and bring them back and sell them at twice the price. Those are the ones you want to encourage, but instead they’re the ones who’ll be the first get their heads chopped off when the money stops coming. Evil greedy bastards, investing their money for future returns like ants instead of spending it as fast as they can like grasshoppers.

    1. I wonder if after 12 years, any of the persons will have become accustomed, nay dependent, upon that monthly stipend. Some may even complain that their money is now being taken away, and how unfair it is.

  9. Disruptive technology is fun! One of the problems of disruptive technology, whenever it crops up, is that it puts a lot of people out of work. Now historically, these unemployed folk have been able to find work elsewhere in new industries, though often they go from well-paying middle-class life-style to bottom-of-the-barrel-scraping-by lifestyle, but what’s a few cracked eggs, right?

    The problem is, the last couple of bouts of “disruptive technolgoy” in the US hasn’t really seen the “new industries”. We lost a lot of farm jobs almost a century ago, and the folks went to the cities or were absorbed in manufacturing jobs, and so-on. Then when we lost manufacturing jobs, folks went to retail. Where are folks in retail, in shipping, in burger-flipping, and so-on going to go when eventually their jobs cost more then a machine?

    What new industries are being created, are mostly for the educated, which is a group categorically distinct from the newly unemployed.

    So the question of what to do with people that lack marketable skills and lack the affinity to learn them is one that we’re going to need to answer sooner or later.

    Thinks like UBI might be the answer. It’s good that we’re seeing long-term tests now, before we need to find a solution that works here. Maybe the naysayers will be right, and it’ll turn out horrible. Maybe the well-wishers will be right, and it’ll work. But at least we’re going to find out before we need to find out.

    1. People have been saying ‘what are future workers going to do’ since the beginning of the industrial revolution.

      The answer to that question is we don’t know what exactly they will be doing, only that they will be doing something and it probably hasn’t been invented yet.

      1. Not to be snarky, but when your response to people’s problems is “we don’t know what they’ll be doing, but they’ll be doing something”.

        Not saying that you’re wrong (that’s a totally different question), just that if you want to get political support for your ideas, you gotta at least act like you’re concerned about the problem. Repeating the parable of the Luddites is a great one-up, but its sh*tty politics.

        1. *don’t expect people to take you seriously and gain an interest in hearing about libertarian ideas.

          Sorry, accidentally clicked submit instead of preview.

  10. Disruptive technology is fun! One of the problems of disruptive technology, whenever it crops up, is that it puts a lot of people out of work. Now historically, these unemployed folk have been able to find work elsewhere in new industries, though often they go from well-paying middle-class life-style to bottom-of-the-barrel-scraping-by lifestyle, but what’s a few cracked eggs, right?

    The problem is, the last couple of bouts of “disruptive technolgoy” in the US hasn’t really seen the “new industries”. We lost a lot of farm jobs almost a century ago, and the folks went to the cities or were absorbed in manufacturing jobs, and so-on. Then when we lost manufacturing jobs, folks went to retail. Where are folks in retail, in shipping, in burger-flipping, and so-on going to go when eventually their jobs cost more then a machine?

    What new industries are being created, are mostly for the educated, which is a group categorically distinct from the newly unemployed.

    So the question of what to do with people that lack marketable skills and lack the affinity to learn them is one that we’re going to need to answer sooner or later.

    Thinks like UBI might be the answer. It’s good that we’re seeing long-term tests now, before we need to find a solution that works here. Maybe the naysayers will be right, and it’ll turn out horrible. Maybe the well-wishers will be right, and it’ll work. But at least we’re going to find out before we need to find out.

  11. 1. Is $22/mo enough to not work present day in that location?
    2. If “Idle hands are the devil’s workshop” is true… not good.
    3. Would today’s ghetto’s where 99% are unemployed count as UBI?
    4. I know a village that’s gonna need a wall. (Okay… slightly trollish.)

  12. More money begets more buying power. More buying power begets higher prices. Pretty soon that $22 will only be worth $22.

Please to post comments

Comments are closed.