Just Give Money to the Poor? A Surprisingly Effective Solution to Poverty

July 4, 2010 | By
Melinda Burns

Half the world's population lives below the poverty line, despite extreme free-trade policies that were supposed to "lift all boats." It's time to try something new.

Who’s responsible for the poor?

Back in the reign of the first Queen Elizabeth, English lawmakers said it was the government and taxpayers. They introduced the compulsory “poor tax” of 1572 to provide peasants with cash and a “parish loaf.” The world’s first-ever public relief system did more than feed the poor: It helped fuel economic growth because peasants could risk leaving the land to look for work in town.

By the early 19th century, though, a backlash had set in. English spending on the poor was slashed from 2 percent to 1 percent of national income, and indigent families were locked up in parish workhouses. In 1839, the fictional hero of Oliver Twist, a child laborer who became a symbol of the neglect and exploitation of the times, famously raised his bowl of gruel and said, “Please, sir, I want some more.”

Today, child benefits, winter fuel payments, housing support and guaranteed minimum pensions for the elderly are common practice in Britain and other industrialized countries. But it’s only recently that the right to an “adequate” standard of living has begun to be extended to the poor of the developing world.

In an urgent new book, Just Give Money to the Poor: The Development Revolution from the Global South, three British scholars show how the developing countries are reducing poverty by making cash payments to the poor from their national budgets. At least 45 developing nations now provide social pensions or grants to 110 million impoverished families — not in the form of charitable donations or emergency handouts or temporary safety nets but as a kind of social security. Often, there are no strings attached.

It’s a direct challenge to a foreign aid industry that, in the view of the authors, “thrives on complexity and mystification, with highly paid consultants designing ever more complicated projects for ‘the poor’” even as it imposes free-market policies that marginalize the poor.

“A quiet revolution is taking place based on the realization that you cannot pull yourself up by your bootstraps if you have no boots,” the book says. “And giving ‘boots’ to people with little money does not make them lazy or reluctant to work; rather, just the opposite happens. A small guaranteed income provides a foundation that enables people to transform their own lives.”

There are plenty of skeptics of the cash transfer approach. For more than half a century, the foreign aid industry has been built on the belief that international agencies, and not the citizens of poor countries or the poor among them, are best equipped to eradicate poverty. Critics concede that foreign aid may have failed, but they say it’s because poor countries are misusing the money. In their view, the best prescription for the developing world is a dose of discipline in the form of strict “good governance” conditions on aid.

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Funny; strange that this topic should arise right now. When I was a believer, (in a god) I believed that what my church leaders said about helping the poor was correct; that they should work for welfare, that we should not give but lend. This might be appropriate in countries where people have enough to eat and they are receiving adequate education, food and shelter.

The LDS Church has a Perpetual Education Fund for the desperately poor that church members in wealthier countries pay into. When the people get that loan to further their education, they are expected to begin paying it back right away, before they have even had their post secondary education and gotten a job. We don't do it that way in Canada with government student loans. We don't have to pay back until our education is complete. Why would a church; a charitable organization ask for money from those who do not have enough food even? Some cannot even afford electricity so they have to go to bed in the winter when it is cold and dark, so they can scarcely do their homework. Why would a church that supposedly obeys 'the master' ask that from their poverty stricken members?
Why can't we just give to them? Who made up the rules and spoke to the emotions that those who receive help experienced? The church says that it is not good for their self esteem to take without giving back. If this is true, why can't those people give back to their families and their communities? Would that not help their self esteem?
They also say that when people do not pay back their loans they feel guilty and stop attending church. So??? Is that what the help is all about; to keep them attending church? Or shouldn't it be to help them just because they are human beings too who truly need our help. I expect nothing in return from those who cannot give. Love makes the world go around and money sure doesn't do any harm when given to the hungry, homeless and hopeless. It can do more harm left in our hands if we let it. Greed is what our governments, churches and businesses thrive on. Why can't we allow others to share in the wealth without expecting anything back except the knowledge that someone's life has improved?


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