Suzanne's Mom's Blog

Photo: Nichole Sobecki for NPR
This Kenyan hamlet is participating in a cash-distribution experiment. The nonprofit GiveDirectly will give $22 a month for 12 years to people in 200 such villages and compare the results with 100 other Kenyan villages.

MIT-based Abdul Latif Jameel Poverty Action Lab (J-PAL) has been working on poverty alleviation for many years now. The nonprofit describes itself as “a network of 145 affiliated professors from 49 universities. Our mission is to reduce poverty by ensuring that policy is informed by scientific evidence.”

A long-term experiment providing Kenyans with a guaranteed income was recently described at National Public Radio. The story caught my attention because my former colleague Erin has been proposing a guaranteed-income approach for years.

NPR’s Nurith Aizenman explains.

“Young guys in dusty polo shirts. New moms holding their babies. Grandmas in bright head wraps. They’ve all gathered in a clearing for one of the village meetings when something remarkable happens. Practically every person’s cellphone starts tinkling.

“It’s a text alert from an American charity called GiveDirectly. Last fall, GiveDirectly announced that it will give every adult in this impoverished village in Kenya an extra $22 each month for the next 12 years — with no strings attached. The money is wired to bank accounts linked to each villager’s phone. The alert is the signal that the latest payment has posted. Everyone starts cheering. Some of the younger women break into song.

“The payouts are part of a grand and unprecedented experiment that is motivated by an equally sweeping question: What if our entire approach to helping the world’s poorest people is fundamentally flawed?

“Today practically all aid is given as ‘in-kind’ donations — whether that’s food, an asset like a cow, job training or schoolbooks. And this means that, in effect, it’s the providers of aid — governments, donor organizations, even private individuals donating to a charity — who decide what poor people need most. But what if you just gave poor people cash with no strings attached? Let them decide how best to use it?

“GiveDirectly has actually been advocating for this kind of cash aid for the past decade. Founded by four grad students in economics who wanted to challenge traditional aid, the charity has already given $65 million to people across Kenya, Rwanda and Uganda, provided by a mix of Silicon Valley foundations and ordinary citizens who contribute through GiveDirectly’s website. And

GiveDirectly has shown through rigorous, independent study that people don’t waste the money.

“Still, those cash grants were relatively modest one-time payouts. With this experiment, GiveDirectly wants to see what happens when you give extremely poor people a much longer runway — a guaranteed ‘basic income’ they can count on for years.

“Michael Faye, the chairman of GiveDirectly, says they’ve chosen to set the payment at $22 because in Kenya $22 per person per month is ‘the food poverty line — the amount of money it would take to afford a basic basket of food for yourself.’

“This hamlet near Lake Victoria — about 400 residents living on less than $2 a day in mud-brick huts with no running water — is just the beginning. [This] fall, GiveDirectly wants to extend the monthly payments to every adult in 200 similar villages across Kenya, then compare them to 100 ‘control’ villages that don’t get the cash. To do this they need $30 million, of which they’ve raised $25 million.

“Some of the world’s foremost researchers of anti-poverty strategies will be doing an independent study of the data that emerges — including Alan Krueger, professor of economics at Princeton University, and Abhijit Banerjee, a professor of economics at MIT and director of the Abdul Latif Jameel Poverty Action Lab. …

” ‘Let them make the choices,’ says [Michael Faye, the chairman of GiveDirectly]. ‘Because the poor are pretty good at making them.’ ”