PITTSBURGH, Pennsylvania — Despite the global economy’s recession, groups are still looking for ways to help the poor in the long term. In Kenya, GiveDirectly is testing universal basic income (UBI), a way to mitigate dire financial conditions.
UBI is a program that gives regular and significant payments to everyone living in a certain area. Stanford University specifies that UBI has no additional requirements or conditions and must go to every person (as opposed to every family).
GiveDirectly is a non-government organization (NGO) that is “specialized in delivering digital cash transfers” according to its website. The site distributes money from donors and sponsors across the world to those in need. Its Kenya UBI experiment began in 2017, runs for at least 12 more years and distributes “millions of dollars to 20,000 individuals living across 197 villages.”
The Exacts of the Experiment
GiveDirectly’s program selected 295 developing villages on the western side of Kenya and split them into numerous groups. The basic measurement in this UBI experiment is a sum of Kenyan Shillings roughly equivalent to $0.75 per day, although the program distributes this monthly rather than daily.
There are four main groups in this experiment. About 7,333 people across 80 villages are receiving the cash over two years. Meanwhile, about 8,548 people in 71 villages will receive the same amount but all at once at the start of the program. Additionally, 4,966 people in 44 villages receive cash over 12 years, theoretically netting them six times the total cash of the former two sets and 100 villages will receive no cash as a control group, or a reference point to what occurs without financial intervention.
Additionally, two other villages receive a monthly payment for 12 years but are not part of the experiment. According to GiveDirectly, this is to have “in depth, qualitative conversations” that the rigors of experimentation will not affect.
GiveDirectly tracks numerous factors to see changes during the experiment. So far, the organization sees improvements in the participants’ moods, food security and health despite complications from the COVID-19 pandemic. However, GiveDirectly notes the Kenya UBI experiment will not reflect UBI implementation on a larger scale or in areas that don’t share Kenya’s conditions.
The Fuss Around UBI
What makes this experiment significant is that UBI is an often-argued but little-used economic concept. The Berkeley Economic Review succinctly sums up common arguments for and against UBI. Proponents such as U.S. Democrat Andrew Yang say that UBI mitigates unemployment risks, increases economic activity and supports movement into “higher-level” jobs such as technology. Opponents believe UBI disincentivizes work, incentivizes irresponsible spending, costs an unfeasible amount and increases inflation.
Writer Sigal Samuel of Vox News created a list of regions that attempted UBI. Of them, only Iran, the state of Alaska and Kenya ran long-term programs through GiveDirectly. Thus, the Kenya UBI experiment is significant for being one of the few empirical sources with data on UBI implementation.
The Good, the Bad and the UBI
The experiment has yet to conclude, but the results are still significant regardless. For professional analysis and an interview, The Borgen Project e-mailed two professors who previously wrote on UBI, Father Thomas Massaro of New York’s Fordham University and Professor Guy Standing of the SOAS University of London, to learn about their findings regarding the program.
Father Massaro concluded that UBI is “a positive initiative to provide income security where it is desperately needed.” He acknowledges that people would misuse UBI funds but that most would live and work normally. Massaro did express some concerns about how universal UBI is and what levels of income “need” financial help. However, overall, he believes the system is beneficial and that most people just want to live a decent life, not abuse systems for maximum gain.
While Professor Standing supports basic income (BI), as he calls it, he has doubts about the Kenya UBI program. Drawing from his experiences with BI pilot programs, he critiques the program’s length and worries that staff turnover will affect the program’s results. He also believes the program’s publicity is troubling because it is still in progress. Finally, he thinks that randomized sampling of recipients prevents “community-wide positives” from BI.
Though the Kenya UBI experiment does not apply universally, as already stated, this is still an important step in proving whether UBI is viable or not in the long term. However, even if the program fails, it still proves that people are hard at work to improve the lives of other people no matter where they live.
GiveDirectly receives backing and funding from numerous corporate entities including Google, NBA Cares and the USAid charity evaluation organization, according to its website. It has distributed more than “$580M+ in cash” to “over 1.37 million people living in poverty.”
Currently, some of GiveDirectly’s programs focus on providing aid to Africa. However, it also addresses challenges in other places such as areas that experienced recent hurricanes like Puerto Rico.
– Henry Bauer