I’ve written quite a bit about cash transfers recently, through Give Directly, or through the related concept of the citizen’s income. It’s a familiar term in development, but not well known generally. I suspect it will be, because it’s an idea that is proving itself in all sorts of ways at the moment. In a nutshell, cash transfers are direct aid – giving money to people on low incomes, rather than second guessing what they need and delivering it in the form of goods and services.
To sceptics, it sounds like money for nothing, or a recipe for wasting your aid funding. In reality, people generally know what they need better than aid agencies do. Because it runs against the natural bureaucratic tendencies of the aid world, it’s been scrutinised more than most aid programmes and the research shows that it works. That shouldn’t actually surprise us – people with very little money have to spend what they have far more carefully than people with lots of money.
So here’s a short introduction to cash transfers from the Overseas Development Institute.