GiveDirectly: Applying the golden rule?

Word of a new NGO is flitting round the blogosphere (hat tip: Duncan Green). It’s called GiveDirectly and it only does one thing: it gives poor families in Kenya $1,000 each over two years.

It looks like a great pilot. The founders quote impressive evidence that giving poor people money is a good way to help them tackle poverty.

Personally, I’m convinced. It’s not going to fix the causes of poverty, like making governments work for the poor, providing decent jobs or tackling discrimination. Those are all still crucially important.

But it puts the idea of empowerment directly into practice: empowering local people to spend aid money in ways that they have reason to value (as Amartya Sen put it). That could be more effective than running workshops on the subject.

It’s also respectful, extremely cheap and – with modern technology – relatively easy to police against fraud. That ticks a lot of boxes. It gives high confidence of short term results, rather than low confidence of long term results – sadly the category a lot of projects fall into.

Most of all, it meets a golden rule of NGO management: treat beneficiaries the way you’d like to be treated yourself.

If someone had funding to help you, how much of it would you want them to spend on staff to organise you into a neighbourhood committee and write reports to donors – and how much would you want them to give directly to you?

4 Responses

  1. Thanks Alex – this is a very interesting initiative. What do you think of the selection process that Give Directly use to identify which households should benefit?

  2. This is probably about the simplest programming there can be but is there a higher risk of moral hazard, i.e. if it achieves large scale, will potential beneficiaries work less hard (for example) if doing so would lead them to be ineligible for cash transfers?

    Also what are the long term effects. It might increase short-term wellbeing but does it lead to ‘development’?

  3. Mahatma Gandhi National Rural Employment Guarantee Scheme Act(MGNREGS) aims to enhance the livelihood security of people in rural areas by guaranteeing 100 days of wage employment.

  4. Update: An evaluation of GiveDirectly’s work is now out, apparently with impressively positive findings. And even the Economist reports that the cash transfer bandwagon is well and truly rolling. See:

    http://chrisblattman.com/2013/10/25/and-the-cashonistas-rejoice/

    http://www.economist.com/news/international/21588385-giving-money-directly-poor-people-works-surprisingly-well-it-cannot-deal

    http://web.mit.edu/joha/www/publications/Haushofer_Shapiro_Policy_Brief_UCT_2013.10.22.pdf

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