Josh Mills is a first year student studying History and Politics of the Americas at the Institute of the Americas in UCL. He recently founded a small NGO looking at aiding secondary school students carry out their own fundraising projects to support equal education in South America.
The opinions expressed in this article reflect the opinions of its author(s). They do not represent the views of UCL's Diplomacy Society, Diplomacy Review nor The Diplomat.
Common perspectives on international development closely resemble the fears and sentiments we harbour in our own society. For example, in the UK, it is commonplace for many to not give money directly to the homeless out of fear that this money will be spent on all the wrong things. In international development, there is a persistent fear that direct cash transfers to those in the most remote and impoverished areas of the world would be futile. Like in our own society, so much of international development has proven to be about telling other communities exactly how to live their lives.
A mechanism of this trend in international development is the use of a third party, often the local government, to distribute funds appropriately. However, too often, huge chunks of the aid given to these governments disappear or are spent on areas that benefit elites instead of those most in need. This can be most clearly seen in sub-Saharan Africa where rural areas receive almost no investment from the government.
With the proven flaws of the third-party method, direct cash transfers are the best option, and the attitudes towards direct cash transfers must be eradicated as they are predicated on baseless stereotypes and presumptions. In fact, the evidence is incredibly clear. A recent study in Canada about direct cash transfers comprehensively validated the idea that direct cash transfers do not just go to “temptation goods” such as alcohol. The charitable organisation Foundations for Social Change gave fifty individuals experiencing homelessness a one-time unconditional cash transfer of CAD$7,500. After a year, in nearly every metric the situation of the homeless person improved. More importantly, the average amount spent on these homeless individuals over a year was less than the government would normally have spent on their welfare. This development illustrates that it is not only better for those suffering from homelessness, but direct cash transfers are also a societally cheaper way of supporting these people.
What does this mean in the field of international development? Well, there is no doubt that the same logic applies within this realm. Those in extreme poverty understand what they need to do to get out of it; they just do not have the money to do so. Yet governments and international organisations presume they know what is best.
Yet, there are some non-governmental organisations like Give Directly that have implemented direct cash transfers. Let us take their work in Siaya County, Kenya, an area facing extreme poverty and food insecurity. The project gave several different households in the region an average of $500, and over a three-month period found that these households experienced positive outcomes not only economically but also in terms of nutrition and health. These studies have been taken further by organisations such as the World Bank, which demonstrate clear long-term benefits to this approach.
So what should the UK government do about international development? Firstly, there must be a return to the pledge of 0.7% of GDP spent on international aid. The movement from 0.7% to 0.5% under Boris Johnson caused the power of DFID (Department for International Development) to drastically decrease. Additionally, the dismantling of DFID as an independent department and its merging into the Foreign Office by Mr Johnson undermined the perceived value and significance of international development within the United Kingdom. Finally, the United Kingdom must pledge its efforts to the research and implementation of direct cash transfers to support the world’s poorest areas.
These direct cash transfers could be the key solution to finally decreasing poverty, particularly in areas such as sub-Saharan Africa, where 35% of the population are still in poverty. However, in order for these transfers to have a wide-reaching effect, major donors, such as the UK and US governments as well as the corporate sector, must recognise this method and invest in it much more significantly. Undoubtedly a radical shift in international development policy for the government, but a necessary one.