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A trial with unconditional cash handouts in rural Kenya showed positive results in wellbeing and economic conditions
The best way to fight global poverty is to give people cash and let them spend it in whatever way they want, according to a new study by economists at Harvard University and from Massachusetts Institute of Technology (MIT).
The research focused on households in rural western Kenya, where nearly two-thirds of people say they do not have enough food available for the next day. An average equivalent of $720 was given randomly to recipients through the mobile banking service M-Pesa between 2011 and 2012.
Food consumption increased 20 percent, with a 42 percent reduction in the number of days children go without food. Recipients were also able to increase their ability to earn income. Revenue from raising livestock rose by 48 percent; total revenue from self-employment rose by 38 percent.
In some cases, the researchers gave money directly to women, and noticed lower levels of domestic violence, as well as lower levels of stress especially when transfers were sent to women rather than men, according to Johannes Haushofer, the study’s co-author and an economist at MIT.
Most aid to poor people is delivered through "in-kind" transfers of food, livestock or medical care but unconditional cash transfers are gaining traction and now reach one billion people, the study said.
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