What if there was a miracle treatment for world poverty? It might already exist. - The ... - 0 views
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Study after study shows cash improves the lives of the poorest with next to no negative side effects.
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A recent review of 19 separate studies shows that, despite early fears, cash transfers very seldom increase spending on temptation goods like alcohol or gambling. Nor do they induce people to work fewer hours.
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The mechanisms through which cash achieves these results aren’t clear, but one study in Kenya finds important reductions in the stress hormone cortisol in some groups who receive cash transfers. These are accompanied by large improvements in self-reported psychological well-being, with larger transfers associated with bigger effects.
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Direct cash aid is also amazingly cost-efficient. A 2016 study by Innovations for Poverty Action looked at 48 separate anti-poverty programs and found that one-time cash transfers have the highest cost-benefit ratio compared to a range of other anti-poverty measures
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So why aren’t cash transfers being used more widely? Perversely, their own cost effectiveness might be part of the reason
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As many as 94 cents of every donor dollar spent on direct transfers to the extreme poor reach them directly
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a sprawling international aid bureaucracy — which, like all bureaucracies — feels threatened by newer, cheaper, more effective ways of delivering its mandate.
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For the last decade, one small aid organization — GiveDirectly — has worked out all the kinks, documented results and proved the idea can work at scale.