The world is complicated – the ‘you-can’t-even-just-hand-out-a-wad-of-cash’ chapter

I don’t understand why, but there has been a lot of tweeting in the twitter world about the wonders of addressing poverty by just giving everyone a handful of cash. That would make a number of aid issues a lot easier to deal with.

However…..

The world is complicated. Everything has unexpected side issues.

An experienced worker in the aid field who maintain anonymity by self-identifying as “J” writes at AidSpeak.

He explains why even giving cash away is difficult in his post, Cash.

He puts this in the fad category:

Which is to say that it is the latest “OMG, fixing world poverty really is easy” fad for journalists and undergrads alike to get all breathless over. Last year it was water. …  Before that it was accountability, or maybe innovation. I get my aid fads mixed up.

The article lists four concerns with even as simple a program as giving away cash.

For starters,

There is no magic bullet.

Nothing works well in every circumstance in every location.  Reducing poverty is very complicated.

Second, there are a lot of wrong ways to give cash; it is necessary to avoid a range of bad options.

Third, there can be significant unintended consequences.

For starters, when working in a poverty-stricken area, putting what counts as a lot of cash for the local situation into someone’s hand creates a security risk for that person when they walk away from the distribution point. Going to the distribution point with a stack of cash equal to the number of people you are helping multiplied by what is a lot of cash per person in the local area equals a huge amount of cash in one announced place at one known time which creates a serious security risk for your staff.

Another risk that comes to my mind is whether the local cultural norms will allow a person to hold a stack of cash which they can spend & invest slowly on themselves or will have to spend it immediately to assist extended family.

What are the unintended consequences and side effects of giving cash out in this village but not that one, to this family but not that one, to this politically connected extended family but not every family?

Finally:

There is no such thing as “no strings attached. Sorry.

Why do you pick one village or develop a certain screening criteria to select certain people? Because you are trying to encourage behavior. You are trying to drive certain activity that will facilitate development. How do you identify people who have an entrepreneurial bent and put money in their hands while keeping the money out of the hands of the local warlord? Any way you try to carry out that idea will create strings, the lack of which is supposed to be a major advantage of handing out cash.

Like I said, I don’t quite get the concept that just-cash is the solution. J’s article points out that even handing out cash is very complicated. Why? Because the world is very complicated.

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