I was intrigued and excited by the story in 'Act one' of this recent This American Life episode. In it, Planet Money reporters looked into the work of GiveDirectly: a charity that, rather than giving poor people cows or seeds or other goods or training, simply gives them money.
The reporters went to a village in Kenya where the poorest residents had each received the equivalent of US$1000. From what I could gather, they were people living in a cash economy and this money was roughly what they would normally earn in a year. The reporters were keen to find out what that money had been spent on.
The villagers lived in thatch-roofed huts and the majority of them had used part of their money to replace the thatch with corrugated iron. Iron is not only more water-tight and much less hassle to maintain than thatch, over its 10 year life-span it also works out considerably cheaper (you have to buy special grass for thatch). With the remainder they did all kinds of things: mostly buying income-generating assets such as a cow or a motorbike, but not always.
The story that moved me the most was that of one man who spent the remaining money on a mattress. Previously he'd been sleeping on the dirt floor (maybe on some kind of a mat - I can't remember for sure), now he sleeps on an actual mattress. When he was asked why this was important to him, he said something like: "Before, I was just the image of a human, but now I am a human.". I was stunned.
It got me thinking, too. I've never heard of a charity that gives away mattresses. Cows or grain mills, yes: but not mattresses. Yet it was a mattress that this man wanted, and he wanted it because it gave him dignity. And surely that's really important?
It also made me realise my own racism. It keeps on popping up within me: racism.
When I heard about GiveDirectly, I was uncomfortable. It didn't seem right to just give these people money. I wasn't confident that they'd spend it well, whereas I was confident that a trustworthy aid agency would give them the right goods and training to really improve their lives. "Give a man a fish, feed him for a day" and all that.
However, a while ago when I heard that the New Zealand government was proposing to limit what certain beneficiaries could spend their money on, I wasn't very happy about it. Partly I was concerned on a practical level - how could WINZ know what was best for everyone in all their different circumstances? - and partly I was concerned that it would take dignity away from already vulnerable people.
Why had I thought it would be any different in Kenya?
In the This American Life story they also talked about how all the people in a nearby village had recived cattle from another charity. In the GiveDirect village, some people had chosen to buy cattle, but others had bought all kinds of other things instead - including the man who had more-or-less bought himself dignity. It seems that my concerns about the New Zealand welfare proposal may well have been valid, but I'm ashamed that I didn't apply the same respectful thinking to vulnerable people far off as I did to those in my own country...
NB If you don't want to listen to the whole This American Life story (it's 28 minutes long), you could listen to a 6 minute version on the Planet Money website or read an article about the investigation on the New York Times website.
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Other schemes that trust people to know best what to do with the money (to varying degress): conditional cash transfers, microfinance. This definitely seems to be a positive trend.
ReplyDeleteOne thing you didn't say that surprised me, though. C's experience of living in a remote Kenyan village was that the economy was essentially cashless: each family was subsistence-farming and made enough for their own use, supplemented by reciprocal sharing of produce and of cash. The way the cash thing worked was - each family had some cash (from sale of excess produce, remittances, etc), and if someone had need of cash (e.g., for equipment, medical treatment, etc) there would be a get-together and the hat would be (metaphorically) passed around. (see http://en.wikipedia.org/wiki/Communal_work#Harambee). I was surprised that the article implied each family spent the money on stuff for themselves - that was a much more American-individualist approach than would have been the case in C's village. Was it really like that?
These people definitely weren't subsistence farmers. They didn't explicitly say so, but as far as I could tell they lived completely in a cash economy. They earned money from things like labouring and definitely used it not only for the kind of occasional needs you describe but also for their 'daily bread'. So money functioned quite differently for them than it sounds like it did in C's village.
ReplyDeleteThere was no mention of people using their windfall for communal needs. Nearly everyone used about a third of it to roof their own individual house. The balance generally went on income-generating assets so they could have a more steady income than they previously had. Quite possibly they then would have used some of this income as you describe, but not the capital.
Given that they lived in a cash economy, maybe giving away the windfall would have been more analagous to people in C's subsistence-farming village giving their actual farm away, rather than some of its produce or cash?