A basic income approach to development

As it turns out, that assumption was wrong. Across many contexts and continents, experimental tests show that the poor don’t stop trying when they are given money, and they don’t get drunk. Instead, they make productive use of the funds,feeding their families, sending their children to school, and investing in businessesand their own futures. Even a short-term infusion of capital has been shown tosignificantly improve long-term living standards, improve psychological well-being, and even add one year of life.

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As a result of this evidence, the winds are shifting in the world of development policy: The European Commission recently suggested that policymakers “always ask the question, ‘Why not cash?’” UN Secretary-General Ban-Ki Moon has argued that “cash-based programming should be the preferred and default method of support.” In other words, the hard evidence behind cash has provoked a healthy debate about how to reform the infrastructure of anti-poverty programming and foreign aid. …

This idea of a basic income guarantee is being debated around the globe, with pilots being considered by Finland’s center-right government and Canada’s liberal party, and support from across the political landscape, including libertarians from the Cato Institute and liberals from the Brookings Institution. The Swiss will vote in a referendum on June 5 on whether to make a basic income the law of their land. The stakes in these debates are enormous, with trillions of dollars of social spending under review. Should we move from a patchwork system of overlapping poverty-reduction programs, administered separately to address different issues (nutrition, housing, employment) to simply guaranteeing a basic income? What would happen if we did?