Making Money Pay: Cash Transfers in Kenya
Instead of handing over billions of dollars to bureaucrats to devise ways to help the world’s poor − and make aid vulnerable to ‘leakage’ in the process − why not just send one-time disbursements of cash directly to recipients so that they could lift themselves out of poverty?
Last month, I travelled to western Kenya to interview some of the recipients of cash transfers in those communities. (My research was funded by GiveWell, a non-profit organisation that vets the work of international charities).
“People used the money in different ways, to pay their children’s school fees, to buy a motorbike, to build a new house like you see my neighbour has done here,” one recipient explained. “I think everybody has used it well according to their own needs.”
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This is precisely what makes cash transfers different, and superior, to traditional forms of aid, proponents say. In an article for the Cato Institute Journal, former Lead Economist in the World Bank’s research group, Branko Milanovic, wrote: “By delivering aid in cash, we do not tell poor people what they should do…and how they should spend their money. We just allow them to decide, without paternalism, on their own. And we improve, ever slightly, their condition.”