Good call! Added
GiveDirectly
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Early findings from the world’s largest UBI study
Fair point re: “nearly twice” vs. “over 50%.” Edited original point to reflect this update.
To the second point, the differences in data sources seem moot to the overall argument. If we stick just to OWID’s visual from 1990 to 2019 (pre-COVID), this is is still a 117 million person (43%) increase of the number people living in extreme poverty since 1990, which is certainly an undercount given the well-documented setbacks post 2019.
Responding below, much of which are direct quotes from the original post.
Eradicating extreme poverty is not a high bar, it’s actually the lowest and one very much worth clearing.
The $2.15/day threshold is not “completely arbitrary.” It’s set by the World Bank, is an estimate of what a person needs to afford a basic basket of goods including food, clothing, and shelter. It’s a rough measure of how many live in unacceptable deprivation in our wealthy world.
While this metric is limited, it’s also quite descriptive. The many symptoms of poverty – disease, starvation, education deprivation, psychological suffering – are improved when a family is less monetarily poor, and further still when their whole community is less poor.
Cash transfers have been shown to grow the wider economy
As cash transfers are spent by recipients, the cash multiplies. Research finds that because people spend this money locally buying goods, starting businesses, visiting clinics, or going to school, the local economy can grow by as much as 2.5x what you give. In effect, the money you give grows the entire economy.
Researchers also found minimal inflationary effects: “Average price inflation is 0.1%, and even during periods with the largest transfers, estimated price effects are less than 1%.”
Many countries use cash transfers to eliminate extreme poverty, which economic growth alone will not solve. (more here)
Cash transfers alone will not eradicate extreme poverty, as countries also need essential public goods like access to healthcare, well-maintained infrastructure, and dependable institutions to foster a thriving economy. However, cash transfers are still needed to help people take full advantage of these resources.
Take Rwanda as an example:
Over the past three decades, Rwanda has maintained peace and security, with the GDP growing annually by 5-10%.
The government has invested in education and healthcare, providing subsidies to make them widely accessible.
Despite these commendable strides, over half of Rwandans still live in extreme poverty.
This is why Rwanda is now using cash transfers as part of their social safety net to help their poorest citizens take full advantage of these other opportunities.
Even China, widely recognized for its economic growth and poverty reduction efforts, is using cash transfers to lift the final ~1% of their population out of extreme poverty. For more on why we should not expect extreme poverty to “solve itself” overtime through economic growth alone, read here.
As people escape extreme poverty, that total decreases year-over-year—explained in detail here.
Sure. We expanded the excerpt from the blog for clarity: “[GiveWell’s moral weight approach] results in a spreadsheet. This framework combines the views of a relatively small number of stakeholders and then applies those outcomes to millions of people. GiveDirectly believes that the weights that should count the most are those of the specific people we’re trying to help. Each individual will have their own specific needs, preferences, and aspirations. We have yet to see a place we worked in (village, county, country) where everyone made the same investments, so why prescribe the same solution for everyone? Why not treat each individual person living in poverty as exactly that, respecting their individuality and allowing them the dignity of pursuing their own goals?” This is to say, we don’t subscribe to GiveWell’s moral weights approach, but instead hold recipient’s preference as our north star.
Research finds people use these funds to improve their health, education, income, and self-reliance, ultimately reducing adult and child mortality. And these results can be sustained years into the future. [Footnote: Source on reducing adult & child mortality. Two examples of long-term cash impact: Uganda (12 years), Mexico (20 years).]
GiveDirectly’s baseline measures don’t date back that far, but we do expect research on 5- and 9-year follow-up measures sometime in 2024.
Cash transfers alone won’t eradicate extreme poverty globally, however they’re an under-funded and under-utilized tool that would massively reduce extreme poverty and work in compliment with other efforts.
It was an active choice to not make this post a structured point-by-point debate with GiveWell’s thinking as theirs is not the only guiding philosophy of how EAs think about issues of global health and development. With much of the $200B/year in Official Development Assistance going to interventions of question effectiveness and over a trillion dollars sitting in private foundations, the EA movement can and should open the aperture of how it thinks about what it recommends beyond the marginal donation.
We’re optimistic the movement could influence existing pots of money orders of magnitude larger than what it does today, thus doing even more good in the world. This could perhaps have been more clearly argued in the post, open to your thoughts / feedback!
That said, we have engaged with the the question of GiveWell under-valuing cash both in this post and in previous posts (see below)
How you score ‘effectiveness’ is ultimately subjective (see our blog), but it’s worth considering the vast range of benefits this single intervention can have
As that previous blog points out, “[GiveWell’s moral weight approach] results in a spreadsheet. This framework combines the views of a relatively small number of stakeholders and then applies those outcomes to millions of people. GiveDirectly believes that the weights that should count the most are those of the specific people we’re trying to help. Each individual will have their own specific needs, preferences, and aspirations. We have yet to see a place we worked in (village, county, country) where everyone made the same investments, so why prescribe the same solution for everyone? Why not treat each individual person living in poverty as exactly that, respecting their individuality and allowing them the dignity of pursuing their own goals?” This is to say, we don’t subscribe to GiveWell’s moral weights approach, but instead hold recipient’s preference as our north star.
While addressing diseases like malaria or river-blindness would reduce suffering, they are only endemic in some but not all places with high extreme poverty – in 2021, malaria impacted only a third of the extreme poor.[12] Giving cash is impactful nearly everywhere that extreme poverty persists.
The global health and development issues GiveWell’s list targets are relatively niche compared to the wide applicability of cash transfers. The funding gap opportunities they’ve identify are more limited still.
[Footnote] It’s worth noting that the charity evaluator GiveWell does not currently factor in these multiplier research results into their cost effectiveness analysis for GiveDirectly.
GiveWell is likely undervaluing cash by their own moral weight terms based on the research they have right now. They’ve commissioned other research that may further change their own ranking.
Ending extreme poverty through cash transfers should be a central EA cause
4 things GiveDirectly got right and wrong sending cash to flood survivors
Thanks, very interesting insights re: healthcare access (you’d enjoy this pod with our research director who is a former medical doctor). The ~$15 is at market value for a phone, so the incentive isn’t especially appealing. That said, sometimes other members of a household will have a phone but the assigned recipient does not so elects to buy one.
Here’s the link in question: https://www.fsdafrica.org/wp-content/uploads/2021/11/YEG-Brochure-29.10.21.pdf
The impact of mobile phones & mobile money for people in poverty
Hi @Robi Rahman we have a webinar on effective zakat this Saturday April 1. Hope you can come.
Great question! We’ll discuss at our upcoming webinar this Saturday. Hope you can join.
It has not! We just posted the sign up link here: GiveDirect.ly/zakat-webinar (it’s this coming Saturday April 1)
Great question. How we approach this:
Our Yemen program is not the same as our Zakat fundraising. We’ve been paying Yemeni families since August 2022 using non-zakat funds. Zakat funds are delivered according to the zakat policy. Non-zakat funds are handled the same as any other donations.
We don’t ask families about faith status and do not plan to start doing so. The reason we direct zakat funds to Yemen is that it’s a non-issue – 99.99% of the country is Muslim. Our zakat advisors who certified the fund were happy with this arrangement.
What’s described above (“an otherwise eligible family informed you they were actually Christian, or some other non-Islamic faith”) is an edge we have yet to see. If this did happen, we’d simply arrange for their transfer to come from our non-zakat funds (see point #1).
We do have a page in Arabic for non-English readers. However, an important part of building trust with zakat givers is transparency and directness (donor=>GiveDirectly=>Yemeni recipient). Rather than market/collect zakat through another organization as a pass-through, we opted to stick with the simplicity that has appealed to other donors. UNHCR is a secular organization with a successful zakat campaign marketed under their name, albeit a much more famous name than GiveDirectly.
Another way we plan to bridge the gap: working with Muslim groups and influencers to share the campaign.
Offer an option to Muslim donors; grow effective giving
Two reasons:
- Our biggest program (large transfers) allows families to select a single head of household to receive the funds. Women often handle household spending so are slightly over-represented as the recipient in this program.
- We run a few specialty programs that are explicitly targeting women (e.g. this nutrition program or this cancer program)
good idea! just did https://www.givedirectly.org/evidence-on-how-cash-transfers-empower-women-in-poverty/