
GiveDirectly Planning to Give $30M in Basic Income to East Africa - deegles
https://givedirectly.org/basic-income
======
mwambua
I'm a Kenyan and I can tell you that this will do more harm than good. NGO
money has been distorting our economy for years now... giving people
livelihoods they can't sustain, making job opportunities that create no value
and making our government vestigial. The poor people that you're supporting
elect the same corrupt politicians every year because they have no idea that
the government is supposed to be supporting them.

I pay 30% tax as a lower-middle income worker but I see very little of this
used productively. The majority of voters don't pay taxes and rely on aid for
everything from farm inputs to school fees. As a tax-payer who understands
what taxes should do for me... I live with very poor infrastructure and
amenities while the government squanders away money. If developed countries
keep propping up our poor majority, they'll never learn to find innovative
solutions to their problems and elect governments that will create sustainable
wealth.

\- Frustated Kenyan

~~~
skunkworks
How are poor people supposed to find innovative solutions to their problems
and elect governments that create sustainable wealth while they're steeped in
desperate poverty? I believe that education is the tip of the spear, but are
there any examples where a poor majority has pulled itself up by its
bootstraps?

~~~
thaumasiotes
Singapore, South Korea, and Taiwan.

~~~
ptaipale
And if you look at what has significance here: it's about free trade and
predictable government. Not really freedom or democracy.

People's Republic of China has followed. India, not quite.

~~~
crdoconnor
There's nothing free about Chinese trade.

~~~
ptaipale
It's a lot more free than it was until late 1970's and China has got
tremendously richer as a consequence.

Nor is South Korea a model of freedom; it was authoritarian, it was and still
is protectionist. But it did integrate to world economy. Compare it to North
Korea, which started off as equally poor, and which has real, concrete, deadly
famines in recent memory.

Same applies to R.O.C. Taiwan; autocratic, even corrupt, but reached out to
world market (and as a consequence forced the mainland China to follow).

Singapore and Hong Kong: very free trade all the time, and way ahead of others
in the region.

~~~
crdoconnor
All of those countries enacted protectionist trade policies. Singapore/HK
tended not to target specific industries but they suppressed the value of
their currencies by loading up on US treasuries (their small size made this
easy).

In all of those cases those countries were given tacit approval by the US to
enact protectionist trading policies and yet maintain their access to US
markets.

~~~
ptaipale
Protectionism and freedom are not absolute. Yes, those countries as well as
the United States also engages in lots of protectionist policies.

However, the mentioned countries integrated more to world trade then most
other countries in their region, and as a result they are now among the most
developed.

Compare South Korea and North Korea, compare Taiwan R.O.C. to P.R.China prior
to impacts of Deng's policy change, compare China and India.

------
troycarlson
Recently fascinated by the thought of piping donations directly to poor
populations and allowing them to use it as they wish. I watched the
documentary Poverty, Inc. [0] regarding the "poverty industry" and how endless
foreign aid in these countries is killing the economy. If Toms shoes dumps
1,000 pairs of shoes in the city center every week, how the hell would a
cobbler stay in business. Or if the U.S. pumps an endless supply of rice into
Haiti, how could Haitian rice farmers sell their inventory?

Instead, give these people the cash to purchase locally sourced goods or open
a business of their own. Economies don't spring up out of a pile of free rice.

[0] [http://www.povertyinc.org/](http://www.povertyinc.org/)

~~~
okket
Just giving money will not work, see Saudi Arabia. They have all the money
they can dream of and did not evolve. If you want it to work it needs 3
things:

1) Free Education 2) High Taxes 3) Strong Unions

Sounds leftist? It may astonish you which countries have the highest ratio of
rich persons per capita live. This and a good explanation can be found in
"Where in the world is it easiest to get rich? (TEDxOslo)"

[https://www.youtube.com/watch?v=A9UmdY0E8hU](https://www.youtube.com/watch?v=A9UmdY0E8hU)

Just giving money may help in short term anyway, but I doubt it is one
solution for everything.

~~~
s_q_b
_1) Free Education_

The Saudi's have a recently reformed education system, complete with a freshly
built full-fledged research university: King Abdullah University of Science
and Technology (KAUST.)

KAUST has a more Western model of education, instruction in English, American
and European faculty, partnerships with multiple Ivy League institutions. The
current President of KAUST is Jean-Lou Chameau, who was previously the
president of Caltech.

Perhaps most significantly, the university is granted greater freedom of
speech and thought than probably anywhere else in Saudi Arabia. Saudi
royalists politically protect the University, while the campus's isolated
location prevents random acts of "law enforcement" by the religious police.

KAUST has an endowment of $20 Billion USD, which puts it in the same league
monetarily with H/Y/P and is about twice the endowment of Oxbridge.

So the Saudis are investing in the right things in advanced education at
least: alternative energy, desalinization technology, chemical engineering...

They're also building a series of new model commercial cities along the coast
where they will attempt the same thing on a city-state scale. The religious
rules will be less strictly enforced in these model cities, but far more
importantly (for commerce), they will have independent judiciaries (still
based on sharia fiqh law), but with written standardized laws of contract
(uncertain contracts have put a strain on the Saudi economy.) They're also
considering relaxing the onerous permitting regulations required to start a
business.

It seems like the Saudis' want to have their cake, and eat it too. On the one
hand, they want the benefits of Western higher education and economic systems.
But on the other, they want to maintain a fundamentalist religious monarchy.

I cannot really see that being successful. The academic freedom needed to
conduct meaningful research is diametrically opposed to the restrictions on
thought and expression in a repressive theocracy.

~~~
sdiq
Education wise they may be doing well. However, I have a feeling they both do
not pay taxes and lack unions of any form.

------
scottrogowski
While I find UBI to be a fascinating idea worthy of consideration, I
vehemently disagree with running this experiment in East Africa. The proposal
seems to either be blind-to or minimizing the potential for unintended
consequences. Decades of trying to alleviate poverty in Africa have taught us,
more than anything else, that the road to hell is paved with good intentions.
Giving food tends to act as “dumping” and weaken the agricultural industry.
Providing foreign aid tends to empower corrupt governments. These consequences
only became clear after years of hindsight. Who knows what unintended side
effects of UBI will be?

If we are going to try UBI, a fundamentally Western idea, it’s only right that
it should be tried in the West. I’m not saying it won’t work - just that we
don’t really know what will happen. East Africa has suffered enough from our
neo-colonial experiments.

~~~
ppereira
There is quite a bit of anger and little fact in this comment. GiveDirectly
has been running UBI programs in East Africa for years now. They have an all-
star cast of economists examining their performance. Their pilot programs were
very successful, which is why they are scaling out further.

East Africa, and Kenya in particular, was carefully chosen for two reasons.
First, Kenya has a mobile phone network that makes it easy to transfer funds
electronically to individuals and then for those individuals to get cash from
the funds at local stores. I wish we had this in the West, but we don't
because of banking regulations. Second, poorer households in certain
communities tend to use natural roofing materials rather than aluminum, which
makes it easy to target funding by satellite.

The UBI is a political football in the West. The Mincome experiment was
cancelled because of a change in government. The potential utility benefits
from a UBI are so great that it would be a shame to think that we have to wait
for it to be politically palatable in the West before we can get any data on
its effectiveness. Also, as far as poverty relief is concerned, money really
does help.

~~~
alttab
You seem to know a lot of the detail. How are you affiliated with
GiveDirectly?

Also, this post also has little fact when the emotive aspects of it contain
phrases like "all star cast", "very successful", "political football",
"benefits so great", "would be a shame."

Where's the facts?

~~~
colah3
I'm not the GP, but I have a similar impression that GiveDirectly has really
strong evidence supporting it.

GiveWell -- a separate organization that does in depth analysis of giving
opportunities -- has a detailed write up on them:
[http://www.givewell.org/International/top-charities/give-
dir...](http://www.givewell.org/International/top-charities/give-directly)
GiveWell recommends GiveDirectly as one of their top charities.

GiveDirectly's intervention has been tested by multiple randomized controlled
trial, including a large-scale one. (See the GiveWell write up for details.)
In general, the case of them seems much stronger than most charitable
interventions.

(I have no affiliation with GiveDirectly, though I'm close friends with many
GiveWell staff.)

------
kogepathic
Interesting concept. I'll be interested to see if it works.

I worked with a company building AC mini grids in East Africa. They connected
around 130 households in each village to a 220V grid.

The expectation was that people would use the electricity for basic needs
(e.g. light, cell phone charging) but also for productive uses (e.g. grinding
grain to flour, air compressors, saws, etc).

The expectation was that as people entered the second phase of energy use
(after basic necessities) their consumption would increase as their income
increased.

What this company found though, was that very few customers followed this
pattern. If people bought anything that increased their consumption, it was
almost always a TV. This obviously didn't improve their income, so often their
use would actually decrease because they can't afford the increased
consumption.

Last I heard, they were having serious problems getting people in these
villages to use more power.

Through some pricing campaigns, they discovered that people's energy use was
almost directly correlated to the price. If you made the price similar to
other well developed countries ($0.10-$0.30 kWh) people would use lots of
energy, but the amount they paid was still relatively small. If you raise the
energy price, people use much less, but end up paying almost the same amount
per month. So if it costs $0.25 per kWh people will use 4kWh, but if it costs
$1 per kWh they'll only use 1 kWh.

Since their model included batteries to cover the night load, they couldn't
afford to sell the energy this inexpensively. Hence their wish to increase day
time energy use among the villagers through equipment use (e.g. welding,
grinding).

My expectation from this program: some small percentage of people will use the
money to invest in tools and means to improve their economic situation. The
vast majority though will waste the money on things which benefit them in the
short term, but provide no long term economic benefit to them (e.g. better
cell phone, television, or maybe a solar home system)

Also from hearing the horror stories of doing business in East Africa
(draconian regulations + corruption) I'm sceptical if anywhere close to 90%
can make it into the hands of normal people. Hopefully this isn't the
reality...

Not sure why I'm getting down votes. I've worked with a company actually
working in East Africa and I don't see people using the opportunity of energy
to improve their economic situation. After basic necessities they seem to use
it for leisure.

~~~
pbhjpbhj
Your analysis seems largely as expected but this part to me seemed a bit
wrong-headed:

>The vast majority though will waste the money on things which benefit them in
the short term, but provide no long term economic benefit //

Things like having a TV? Do you have a TV, is it a _waste_ of money too? Would
you say most of the people who own TVs would describe them as a waste of
money? After you've got a bed, clean water and food, some sort of diversion
from the humdrum is probably the next "need" that most people would address.
TV can be a benefit, an inspiration, it's just not an obvious direct economic
benefit (unless you're running the local TV shop, electrician or repairer).

Part of the problem with providing utilities with an expectation of them being
used to create economic benefit is surely that people don't know how to use
them for such purposes? Did you address that with your projects - like if you
bought this apparatus for this amount you could process millet and run a
company earning this amount.

Couple of questions about your electrical mini-grids - was there any
cooperative buying, like setting up a TV in a communal building? How was the
power being generated?

~~~
kogepathic
> Do you have a TV, is it a _waste_ of money too.

Yes I do, and yes, since it brings me no economic benefit and I could easily
live without it, it is a waste of money.

By comparison, my smartphone allows me to send emails, make phone calls, and
generally communicate with my colleagues. This creates value. Watching TV or
Netflix creates no economic value.

It might create social value, but the OP is about creating economic value.

> Did you address that with your projects - like if you bought this apparatus
> for this amount you could process millet and run a company earning this
> amount.

Yes! Of course they realized that people might not have the ideal or the
capital to go and buy one of these machines. They worked on a hire to own
scheme with local partners, and offered a lower energy price to those who
wanted to buy one.

Again, only a tiny percentage of people were interested in doing this.

> setting up a TV in a communal building

This is quite difficult to achieve. You cannot be seen as picking favourites,
it's really not something that works from a business perspective in these
communities. People get envious really quickly.

So, communal buildings. Well, there aren't any. The government has basically
no presence in these places, and asking them to build a building would
probably take 5 years, if it happened at all.

The only buildings that really exist are businesses, and if you set up a TV
there, the guy running it will charge people to watch it. You're playing
favourites!

You could give every business a TV, but then everyone will rush to set up a
"business" so they can benefit from the scheme as well.

This company itself cannot set up a TV or build a community structure because
quite frankly, it will be vandalized for parts. Also the legal situation in
these countries w.r.t. copyright and statements against the governments is
appalling. So there is a huge liability toward providing services to the
community (e.g. internet, distributing content on SD cards)

> How was the power being generated?

Small scale PV array built in the village with supporting equipment housed in
a structure. The scale of these projects was <20kWp.

Look. I'm not trying to sound negative. I want Africa to develop. They
absolutely have the chance to be the next China and become an economic power
house.

Unfortunately, I don't see that happening with the current political and
regulatory environment there.

~~~
pbhjpbhj
Thanks for fleshing things out. If you don't mind one last question - you
mentioned about communality not really working [for TV ownership at least],
who then owns the PV array - is it your company that owns it, does the
community acquire ownership over time. Who is responsible for repair and the
costs of that?

~~~
kogepathic
The company owns it, and they handle operating costs and maintenance.

At this time, there are no plans to transfer ownership to the community.

Ownership transfer has been done before, notably by some NGOs, and to my
knowledge it has always ended up with the system failing due to lack of
maintenance (either due to skills or funds) and being parted out.

------
agrona
GiveDirectly's previous work involves finding the poorest communities in the
world and targeting the poorest members with direct cash transfers. I was
turned on to them a few years ago by GiveWell (unrelated), which attempts to
evaluate charities based on cost effectiveness and capacity for more funds.

In addition to the GiveWell reports, GiveDirectly also document and publish
their work and research. It's exciting to see the impact that they are having
(and how minimal the systemic abuse of the money is):

[https://givedirectly.org/research-at-give-
directly](https://givedirectly.org/research-at-give-directly)

[https://givedirectly.org/research-on-cash-
transfers](https://givedirectly.org/research-on-cash-transfers)

------
deegles
TL;DR: "With your help, we will run a long-term, universal basic income and
study it rigorously to find out.

We think the whole thing will cost roughly $30M, of which around 90% of the
funds will go directly to very poor households."

------
Aelinsaar
I like this. Everything I've learned about charity seems to indicate that in
most cases, giving people who need money, money... is the way to go. Being
able to examine the impact of a basic income in my view, is an additional
benefit.

------
fche
"With this pilot, we want to provide a true test of a universal basic income."

... except for the part where taxes are collected from the population to pay
for said universal basic income.

~~~
dragonwriter
Yeah, an exogenous UBI is a fundamentally different kind of thing than an
endogenous UBI. (Also, an openly close-ended trial is different than an open-
ended program in the way that it affects behavior.)

------
home_boi
The study won't be valid unless they wait at least 2 generations after UBI is
implemented.

People born before UBI grew up with the scarcity on their minds, shaping the
way they act with UBI.

People born right after UBI is implemented will be biased by parents who grew
up wirh scarcity, like the children of American immigrants.

The study can only be valid when the parents of the person to be observed has
UBI for their entire life.

~~~
dragonwriter
UBI doesn't eliminate scarcity, so that whole argument is grounded in a false
premise.

~~~
home_boi
Put differently, people train their work ethic in an environment that does not
include UBI. It will take 2 generations after UBI is implemented for this bias
to mostly disappear (although there might still be a few lingering effects
that converge to 0 as time goes on).

------
geekfactor
FYI the April 13 show of the Freakonomics Podcast takes on the question "Is
the World Ready for a Guaranteed Basic Income?" and mentions some of the prior
studies noted in this article.

[1]
[http://freakonomics.com/podcast/mincome/](http://freakonomics.com/podcast/mincome/)

~~~
ultramancool
A few more good podcast links here, 2 episodes of NPR's Planet Money about
GiveDirectly's results:

[http://www.npr.org/sections/money/2013/11/08/243967328/episo...](http://www.npr.org/sections/money/2013/11/08/243967328/episode-494-what-
happens-when-you-just-give-money-to-poor-people)

[http://www.npr.org/sections/money/2013/08/16/212645252/episo...](http://www.npr.org/sections/money/2013/08/16/212645252/episode-480-the-
charity-that-just-gives-people-money)

Overall the basic income idea... I don't like it in a lot of ways, I just
can't see it resulting in a productive society personally. But that's just my
gut reaction and I could be wrong, so far the data I've seen is a pretty mixed
bag.

I think things like this are a great way to experiment with it though (and
without tax payer money). I might change my mind if there's more good data.

~~~
rm_-rf_slash
Basic income could just as likely increase productivity. Without the need to
work, there is a greater incentive to automate jobs. People don't work crap
jobs because they like to, they do it because they have to. Anyone who wants a
higher standard of living than the basic income minimum can improve their
skills while they're sustained by their safety net. Meanwhile, basic income
puts more money in the pockets of consumers, creating more market
opportunities, especially for the low-cost goods and services those consumers
used to work to make.

Or maybe everything I've said is bullshit. Who knows? Only one thing is for
sure: without experimentation, we only hurt ourselves in the long run.

~~~
maaku
Why wouldn't I just let someone else figure out how to automate jobs? I've got
my income. Let someone else figure that out.

~~~
dragonwriter
> Why wouldn't I just let someone else figure out how to automate jobs? I've
> got my income.

Empirically, people often expend effort to increase their income when there
are opportunities available, even if their current income meets basic survival
needs. I don't see why that wouldn't continue to be the case with basic
income. What, people are going to stop wanting luxuries?

~~~
ultramancool
> What, people are going to stop wanting luxuries?

Not sure about you, but most of the luxuries I own, I've basically only bought
because I had money for them. If I didn't have money to blow on them, they
really don't bring me that much joy, relatively basic items would suffice.

So many things I think of as the real luxuries these days are free or
basically free. I can spend hours watching youtube or playing games for
extremely little cost.

I would not exert extra effort to buy better phone or a 4k monitor and a 980ti
instead of settling for a weaker setup. Instead I only have these things
because the money was there already and I had nothing better to do with it.

Basically, I'd drop out of the workforce in a heartbeat if I could afford
living and a few minimal luxuries. $15-20k/year would do the job to split a
cheap apartment with a friend and keep the rest under control. This is half of
what some people have proposed as a UBI.

~~~
dragonwriter
You might accurately describe what you would do, but I think the evidence from
the world around us is that most people in the US _do_ see sufficient marginal
utility in things beyond what it takes $15K-$20K -- or even $30K-$40K -- to
afford to exert additional effort to earn beyond that level given the
opportunity. So even if we could somehow establish a UBI that would (after
accounting for whatever inflationary effect the UBI itself had) provide a
standard of living comparable to $30K-$40K in current dollars (which I don't
think we can come anywhere close to today), I don't think you'd see a whole
lot of people who were had job prospects not working.

~~~
ultramancool
> I think the evidence from the world around us is that most people in the US
> do see sufficient marginal utility in things beyond what it takes $15K-$20K
> -- or even $30K-$40K

Do we actually have evidence for this? If you're comparing working a skilled
vs unskilled labor I think there's a lot more difference than just pay there
that must be considered. In a lot of ways the skilled job is lower effort,
even if the up front effort requirement was higher, the daily effort
requirement is often lower.

You also have to consider than even a relatively low effort job 8 hours a day
is a massive effort difference from zero, which is the alternative you're
actually comparing to. Basically, if you need to exert several hours a day
worth of effort to get by, you better optimize the value you get back from
them. But if you don't need to exert any at all to get by, that's a very
different situation.

But maybe I'm just an uncommonly lazy turd. It's possible. I just don't have
evidence to say it for certain.

------
EGreg
Basic income is inevitable.

Wages have been lower relative to inflation, real estate etc because demand
for human labor has been dropping. Consumer goods come down in price but real
estate, gold and other limited resources are a reference for how low demand
for human labor is falling.

Technology enabled outsoucing, and automation, to erode the demand for human
labor. Luddites were 150 years too early. The capabilities of computers are
only growing.

The next will be self driving cars, kiosks at mcdonalds and drone delivery.
That will put a lot of people out of work.

Relying on wages to trickle money down only works when employers value their
employees. These days we are in the intermediate period with a growing
unemployed class, part time temp work, two year stints at companies, and
stagnant wages for the average profession including developers.

There is no reason not to tax the productivity gains made by corporations by
R&D and automation, and redistribute that to everyone. Alaska has been doing
unconditional basic income from a tax on using its natural resources.

Most people will be 90% consumers and only 10% producers. Already, most full
time jobs are just make-work. Conditional welfare and fulltime jobs make
people afraid they'll lose their check if they work on what they are
passionate about. That's an infantile mentality that holds many back from
living productive lives. They instead pretend to work or pretend to be poor,
to keep getting that conditional check. It's time to let the humanity at large
grow up, stop wasting time and tap their potential.

~~~
jjawssd
> Already, most full time jobs are just make-work.

Wow this is quite a bold statement! How can you be so sure and generalize so
much?

~~~
EGreg
Because I choose to be bold.

And I like to focus on the main factors in a situation if I can find them.

------
tn13
Letting markets function has helped poor countries like India, China and even
North Korea. Making decisions on behalf of poor people has hurt poor even in
the richest countries like USA. Common sense to me.

There is always an issue of law and order though. If theft is a common problem
then this may not work.

~~~
abannin
If people choose to donate, isn't that just the market working?

------
brianbreslin
Can someone point me to any unbiased research on the micro/macro effects of
basic income vs raising minimum wage? I've been struggling to find non-
hyperbolic politically laden information on the subject.

~~~
choward
In my perfect world, most human work is automated away. What's the point of
minimum wage if there are no jobs to do?

------
dragonwriter
FWIW, this isn't really testing a what "Basic Income" is usually defined as in
any area, since the benefit will be given to people in the target area when it
starts, and follow them if they leave (and not be given to new residents of
the target area that arrive during the trial). And also may include different
levels _in_ the target area. So its an experiment about giving free money to
individuals, in an arrangement substantially different than a Basic Income.

------
safeharbourio
Let us jump in with our opinion (We are a startup from Kenya), This has the
potential to do great good, and at the same time, great harm. As someone from
this region, my first thought like mwambua, is the instant abuse by corrupt
individuals as a get rich quickly mechanism, and thats my biggest worry, will
this project be able to ensure that needy people actually get this, or who
decides who gets it? More or less this is the only thing i would have a
problem with, as integrity issues down here have and continue to ruin
everything, if this program can by some means manage to rise beyond that, then
for sure, this will be great, and i would definitely look forward to the
results. This is my take, if you can get it done transparently and with proper
selection (weed out perennial NGO dependents), this may very well be the best
social/political science experiment out there. As a tangential observation,
one of the reasons corrupt politicians get power down here, is that they have
the means(through dubious sources, usually stolen from the taxman) to dole out
cash bribes/handouts to young otherwise destitute/jobless guys. Should this
experiment change the economic circumstances on the ground, the politics will
also have to change, which may be quite frightening for politicians, have you
guys thought of what sort of reaction you will get from influential
individuals with a stake in the status quo? That said, viva la basic income,
bring it ;), we are all for it, after all, whats the worst that could happen?

Should some of the concerns we've raise be addressed, this will definately
sidestep the problems mentioned in haiti and other areas on this thread.

------
larrik
"It is provided to everyone, regardless of need, forever."

How long will the experiment last? I feel like the recipients knowing they are
guaranteed a payout for at least a decade will result in very different
behavior than only knowing you have it this year and maybe next year, even if
you do for it a decade.

------
jrbapna
I'm looking forward to the day when the other half of the world gets "on the
grid" so to speak. The rise of other economies will greatly benefit humanity
as a whole.

Great experiment. Very excited to see where this goes.

------
awt
While initially in favor of basic income due to the income trap created by the
traditional approch, I have come to oppose it due to a better understanding I
now have of the nature of money. Consider that basic income works when you
think of money in the micro context as a means of exchange for goods and
services, but not when you think of it in the macro context as a reflection of
the wealth of a society. Simply transferring money from one group to another
does not make the second group wealthier.

~~~
dragonwriter
Basic income isn't designed to make the recipients wealthier directly (OTOH,
access to greater goods and services produces more _opportunities_ to _become_
wealthier over time, which is more the point.)

~~~
awt
This implies that they're not wealthy because they don't have access, would
you agree? Is it possible they're not wealthy because of some other reason?

~~~
mbil
I find it hard to imagine that if you're struggling to attain your own bare
necessities you're going to have the energy or wiggle room to generate more
wealth (e.g. to start a business)

~~~
awt
But why are they struggling so? Is it simply because of a lack of money?

~~~
mbil
Good point. They're struggling due to having unmet basic needs. Since money
provides almost no nutritional value I can't see how it would help them.
You've enlightened me; I'm now a social darwinist. /s

------
mathattack
Seems like a great experiment. I think this will do wonders for both the
people, and our knowledge of how to best provide aid.

2 things I'm interested in seeing:

1 - Does it make a difference if it's USD sent over, versus local currency?
(Is it a cash shortage, or a foreign cash shortage?)

2 - How much inflation will occur?

~~~
skybrian
1\. The donations will likely be in local currency (via mobile phone
payments), but the charity needs to exchange dollars for local currency. So it
helps somewhat with the exchange rate if the country is short on foreign
currency, but I'd guess the scale is not nearly enough to have any significant
effect.

2\. It doesn't increase the amount of currency in the country as a whole.
Locally, if the economy is doing better, perhaps people will charge more for
jobs, but they also trade with other parts of the country so that would tend
to keep prices stable (if not too isolated).

~~~
dragonwriter
I don't understand your responses here: this is a western charity putting in
10 million USD and soliciting (and not exclusively soliciting in the target
country, which hasn't even been _identified_ ) another 20 million USD for the
effort. Where do you get the idea that the donations would "likely be in local
currency"?

~~~
skybrian
I don't know, but I've been watching GiveDirectly for a while and assume
they'll handle this similarly to how they have before. This basic income
experiment looks like a minor variation on what they already do.

From [https://www.givedirectly.org/basic-
income](https://www.givedirectly.org/basic-income)

"Location: To be finalized, but likely East Africa, where we have existing
operations."

They've paid people before using mobile phone networks and it's worked well
for them.

~~~
dragonwriter
Okay, I think the miscommunication is on the word "donation"; you're referring
to the payments to beneficiaries it sounds like, I took "donations" as the
money going in to GiveDirectly.

------
thedevil
While it's noble to give away $30M, it won't necessarily give strong support
for universal basic income. In order to have an effective experiment, you need
to also tax those people $30M and redistribute it. That's missing from their
checklist.

Of course free money is better than no free money! That's all this will prove
and few will debate that. The real questions are: 1) is it worth the cost, and
2) is it better than alternatives?

I would personally donate to a large-scale A/B experiment where you give one
group cash and the other group food, housing and education worth an equal
amount and see which works better.

I worry that the recipients are going to be better off (because you just gave
them $30M) and then everyone is going to want to implement a huge, risky (and
fundamentally different) program in the US.

Note to avoid excessive downvotes: I like the idea of UBI in theory and I will
support it one day but I think we're not there yet. I think we need more
automation and more overall wealth before it makes economic sense - before
benefits > costs.

~~~
noahlt
> Of course free money is better than no free money! That's all this will
> prove and few will debate that. The real questions are: 1) is it worth the
> cost, and 2) is it better than alternatives?

I think the majority of dissent in the United States would actually argue that
free money is worse than no free money. (If this surprises you, you may also
have been surprised that Trump is going to be the GOP nominee.)

------
Vaenae
I wonder what is the control group here? I mean I'm sure that giving away free
money helps, but shouldn't the question be 'Is this the most effective way to
help'?

------
jijji
sounds like another 319 scam waiting to happen. bye bye money. all you have to
do is read the thousands of stories about different governments or NGO's
attempting to "help", or "fund", or "develop" projects in that part of the
world and all the people have done was squander the money. History repeats
itself if you don't learn from its mistakes. I think a better place to flush
money down the toilet is to use an actual toilet, at least you know where its
going.

------
aab0
I'm very interested in the outcome of this trial, and have donated $800
recently (using Bitcoin).

------
j4kp07
LMAO....they need donations to "test" Basic Income. That speaks volumes
people.

