And so, the debate about what might work better continues. Here's a story about a new effort in Namibia to alleviate poverty by providing small direct cash grants to every person in a particular town in the eastern part of the country. The loans are non-conditional, so different from the well-known Bolsa Familia program in Brazil, which require parents who receive the payments to keep their children in school and get them vaccinated, among other conditions. Here's a BBC story describing the Brazilian program.
In Namibia, a group of NGOs have joined forces to supply funding for every person in the village of Otjivero. Each villager (rich or poor) receives 100 Namibian dollars a month to do with as they wish. While some skeptics predicted an increase in alcohol consumption and crime, what's reported is that some of the recipients have started small businesses (such as bakeries), others are sending their children to school or improving their homes. These are the sorts of things people do when they receive remittances from family and friends, so it's not surprising they do similar things with these transfers. Interesting to me, the new entrepreneurs who are interviewed for this story are women -- not sure what the men are up to :-)
Are cash transfers a better form of aid? If managed effectively they do at least get money into the hands of the poor but they also raise concerns: will politicians use them to influence voting? do they create unhelpful incentives? and are the programs scalable? To sound an old note, without a reasonably stable and secure institutional environment (which Namibia has) they're unlikely to be a new silver bullet.
(HT: Jennifer Zambone; the photo is one of mine from near Swakopmund, Namibia.)