For a few years now, a universal basic income has been tested in pilot programs all over the world. Everyone is given cash to cover essential needs. Can such a measure eradicate extreme poverty?

©Eve Thompson-USAID
©Eve Thompson-USAID

The idea is nearly 500 years old–Thomas More imagined it for the first time in his Utopia,– yet it still generates heated debate between economists, philosophers and politicians worldwide. Often considered utopian, the concept even encounters resistance from defenders of social justice.

For some, it can help eradicate poverty and ensure universal access to basic services. For others, it’s just another pretext for the erosion of social services and the dissolution of welfare. Both sides agree on one aspect though: implementing such a system costs so much money caution is required. From Kenya to Finland, the details of the pilot programs influence the results in a way that makes coming up with a global evaluation of the system quite difficult.

A tool for universal access to basic services

Two pilot studies have taken place in several villages of Madhya Pradesh in 2014, with support from UNICEF. The results showed improvement in living conditions in the beneficiary villages, as opposed to control villages. Access to toilets, clean water and reliable energy sources have increased more considerably in households which received a basic income. This experiment shows that basic income can be considered a viable tool to help populations overcome extreme poverty by improving their access to essential goods and services.

The most elaborate pilot program so far is being implemented in Kenya by NGO GiveDirectly, with financing from American Internet companies. For 12 years, 16 000 people in over 200 villages will receive USD 22 per month to address their basic needs. The process is already showing impacts on women’s status as they handle a budget of their own often for the first time. Beneficiary Irene Ogutu Kira says the program has been successful in helping her escape extreme poverty: “Before I had to ask my husband for money, now I can get things with my own money. I am out of poverty”. In certain villages, collective savings groups have been implemented to help certain members of the community finance their projects. “Giving cash enables people to respond to their needs the way they understand it best”, says program coordinator Caroline Teti.

 

What of public services?

Others believe that States should be made more responsible for the eradication of extreme poverty. As of today, data concerning the impact of a basic income on employment in developing countries is scarce. The process seems helpful to cover urgent needs of poverty-stricken populations, but its impact on extreme poverty may not last long if public services aren’t reinforced. For French researcher Anne Eydoux, basic income must not become “a means to accommodate unemployment or job precarity”.

Stronger communities

In other pilot programs, basic income is appreciated for its impact on youth and community ties. In the USA, a casino has been generating enough cash to distribute a basic income to all members of the Cherokee community for the past twenty years. Medical psychology researcher Jane Costello has studied the impact of this income on over 1 400 children, including 350 Cherokees, until all turned 30. “As adults, those who received the cash supplement use less alcohol and fewer drugs. They commit fewer minor crimes and are more likely to graduate from high school […] at age 26, the average IQ of this group is a bit higher.” Other studies show positive effects on people’s involvement in democratic processes.

Basic income is no magic solution, but many studies now show evidence that it can contribute to bettering the lives of poverty-stricken populations. Can it be implemented on a larger scale and are its impacts long-lasting? Time may tell.

 

 

The opinions expressed on this blog are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.

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