It is Possible to Just Give Money to the Poor

Jul 24, 2011

It is Possible to Just Give Money to the Poor

The article explores two instances in the past decade where Mozambique adopted cash grant programs, which proved, according to USAID “that households make very prudent use of the money.” In the first instance, cash was given to demobilized soldiers and in the second to flood victims. In both cases, the money was used prudently by the poor to raise their standard of living and on productive investments, thus stimulating the local economy. This supports Desai’s theory that money should be given directly to the poor rather than to government officials who often gain more from foreign aid than the population for whom it is intended. Mention is made of South Africa’s basic income tax grant, which has been lauded by the Economic Policy Research Institute as “feasible, affordable and supportive of poverty reduction, economic growth and job creation.”

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