Give cash to the poor, and they’ll squander it? This Nobel laureate has a different opinion


In most contexts, it is “much better, much easier, much faster to give cash to people” than to give them food, she told In Conversation.

“So why not then give them the money — which is much easier to organise, has less corruption, has less procurement problems — and therefore make more resources available for everyone? And (trust) a little bit (more) that people do what’s right for themselves.”

INCENTIVES AND WHAT TO DISH OUT FOR FREE

Duflo’s research has also added to knowledge about boosting immunisation among the poor.

Based on a randomised controlled study in rural Rajasthan, she and her collaborators found that offering modest incentives to families in poor areas could increase immunisation uptake significantly.

Even though vaccination benefits individuals and those around them, people are liable to procrastinate because it “isn’t fixing a disease you already have; it’s preventing something from happening” in future, she said.

But if people receive something they can use immediately, such as lentils or mobile phone minutes, it makes up for the “cost” of the effort to get vaccinated.

Such incentives are “not going to convince you if you don’t want to do it for ideological reasons, because it’s a very small gift”, she noted.

“It doesn’t change your view about vaccination fundamentally. But if you’re someone — (like) many people in developing countries — who already thinks that ‘yes, it’s good to get vaccinated, and I should get it for my children’, then it’s going to encourage you to do it today rather than to wait.”

She and Banerjee are co-founders of the Abdul Latif Jameel Poverty Action Lab (J-Pal), a research centre whose network of affiliated professors round the world conduct randomised impact evaluations to test and improve the effectiveness of social programmes.

Among other things, J-Pal’s research has shown that people do not necessarily have to pay for something in order to value it. One such study, by development economist Pascaline Dupas, is on bed nets that protect people against malaria-spreading mosquitoes.



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