Joseph Hanlon - Book author, Just Give Money to the Poor and Senior Lecturer, Open University
David Hulme - Book author, Just Give Money to the Poor and What Works for the Poorest and Associate Director, Chronic Poverty Research Centre /Executive Director, Brooks World Poverty Institute
Paul Wafer - Team Leader/Deputy Head of Group, DFID Poverty Response Team
Caroline Harper - Research Fellow, Overseas Development Institute and Associate Director, Chronic Poverty Research Centre
The eradication of poverty has been a central challenge in the 21st century – but too often it has been burdened with complex economic theories, strategies and programmes to combat poverty. Amid all these, Just Give Money to the Poor challenges a simple yet powerful solution to poverty reduction that is sweeping across the South: to give money directly to the poor. Instead of relying on an expensive and complex aid industry, and by bypassing NGO’s and governments, cash transfers given directly to poor families will enable them to decide on the most effective ways for them to escape poverty.
This century’s goal of eradicating poverty has also shaped various initiatives to assist the poor – however, development practice has, for too long, focused on the moderate poor, and has failed to reach the extremely and chronically poor. What works for the Poorest? creates important knowledge about the poorest – because poverty reduction goals will be most successful when the issues of the extremely poor are addressed. What works for the Poorest hence provides essential analyses on current experiences, and presents what policies and initiatives will work for the extreme poor.
Authors of Just Give Money to the Poor, Joseph Hanlon and David Hulme (What works for the Poorest) discussed ideas from their book at this launch.
1. Caroline Harper introduces authors Joe Hanlon and David Hulme, and discussant Paul Wafer who is DFID Social Protection Team Leader.
2. Just Give Money to the Poor is introduced by Joe Hanlon who first highlighted the book’s subtitle, ‘the Development revolution from the global South’, as the idea to ‘just give money to the poor’ comes from the South, and not one that comes from the North or development agencies. This idea from the last decade has been a response to the Asian financial crisis, a recognition that the neo-liberal model promoted by the North did not work in the South, and a Southern challenge to the Northern way of thinking.
3. In industrialised countries, cash transfers are seen as a right / rights-based. They are also seen as long term grants and not safety nets, and are broadly based schemes, which are not targeted to the poorest of the poor. The Southern idea (to just give money to the poor) is based on the poverty trap model, and comes from government and civil society’s belief to trust the poor.
5. Joe reminds us that cash transfers is not a new concept, but has been done throughout the history of developed countries to encourage economic growth. The South is looking to apply positive lessons from industrialised countries in distributing cash transfers to the poor.
6. Joe pointed out that a common perception has been that the poor do not use money wisely. However, all the studies carried out in Just Give Money to the Poor prove that cash on hand empowers poor people, and that they use it wisely. Cash transfers tend to go into the family budget, and children gain most – they are able to get more nutrition, education, etc. When given to the poor, cash transfers are invested; after five years, it is found that families given cash transfers have an income that is more than the value of the cash transfer. Cash transfers also create a positive spiral and stimulates growth.
7. Joe stresses that there is no single model for cash transfers – they are designed differently in different countries. Interesting is that cash transfers come from countries who can pay for it themselves (Mexico, Brazil, Indonesia, etc), through taxes / current revenue, and then from countries who can pay it from minimal revenue (Mongolia, Ghana, etc). There has also been increasing South-South cooperation with countries advising each other on best practices.
8. For the poorest countries, cash transfers will have to come out of aid money. Joe poses the question of how to incorporate aid, as there are no set of rules that donors can impose. Joe conveys that every country has to come up with their programs themselves, and suggests five guidelines to follow. When these guidelines are followed, it is believed that cash transfers really work to reduce poverty and promote development.
- Programmes have to be transparent to the people to ensure fairness;
- it has to be assured;
- while it does not have to be large, it has to be big enough to make a difference to the family budget;
- it has to be practical (vary from country to country);
- it has to be politically popular so that it carries across through change of governments.
9.David Hulme introduces What Works for the Poorest, which originates from discussions between researchers in Bangladesh (BRAC) and the CPRC on the failure of microfinance programmes to reach out to the poorest. What works for the Poorest was published to bring forward learnings from Bangladesh and internationally about the ultra poor.
11. David emphasises that even when there is growth in developing countries, large numbers of people still remain poor and receive no benefits at all from growth. Hence, interventions are essential so that the extreme poor are included. In What Works for the Poorest, David highlights the main objectives of the book:
· Raise awareness on the extremely poor, who are difficult to access and where little is known about them. There is a priority need for this because the extreme poor suffer greatly, because it is associated with the intergenerational transmission of poverty, and because those who are extremely poor have been denied all their lives of their human rights. There is a classic notion that the extreme poor are dependent and are mostly orphans, widows, elderly, etc, but those who live in extreme poverty generally work long hours in very poor working conditions.
· Encourage the collection of data to identify the extreme poor and promote policies and projects to assist extremely poor people. It is important to create knowledge of different types of people who experience extreme poverty, and what the causes of their poverty are.
· Provide practical examples of projects and policies that eradicate extreme poverty to provide learning and inspiration. How do these programs work and how can they be targeted to reach the poorest?
12. David stresses that context is very important in the transfer of knowledge and learning on the extreme poor. Key messages from What Works for the Poorest include:
· Growth figures do not show that it improves the lives of the poor. To help the poorest, it is important to find out what is the income growth of the bottom quintile (and not the overall), in order to raise questions on how to improve the bottom quintile.
· Social protection can help reduce vulnerability, add to productivity, increase nutrition, and may be able to contribute to social cohesion.
· Service delivery should be more effective, especially on basic health services. To make services more available, policies should tackle discrimination, remove user fees, innovations to service delivery, and breaking down public expenditure by quintiles.
13. To conclude, David says that the ideas to understand what works for the poorest need local knowledge, understanding and experimentation; there needs to be unsung heroes – people willing to work in difficult environments. It is not the case that very poor people are dependent and need charity, as poor people are struggling in very difficult environments, to try to improve their lives and their children’s lives, hence we need to create the strategies to be able to assist them.
14. Paul Shafer shares his comments on both books and reflects on the importance of reaching out to new audiences and breaking out from usual languages. According to Paul, it is essential to communicate and reach out differently and think about how a broader engagement in international development issues can be achieved in the UK.
15. Paul notes that the two books are complementary to broaden understanding of who are the poorest and what this means for cash transfers. Both books raise questions on the importance of understanding how cash transfer programmes are being implemented? Who are the poor? How do we understand poor people lives?
16. Paul touched on the role of donors, for instance and in particular the DFID, which he expresses play a complimentary role in scaling up cash transfers, and an important role to:
· build and support an evidence base, especially on issues like how the design of social protection programmes can have different impacts;
· deliver quality programmes on the ground and work at country level with local governments;
· help shape the international debate, to create space, to ensure that issues around the poorest and social protection are covered and stay high on the agenda.
Discussions, comments and questions raised by the audience included:
· Could ‘just giving money to the poor’ bring problems of controversy in the field?
· Are cash transfers appropriate, for instance like in the case of Tanzania, where pilot programmes on conditional cash transfers are underfunded and there is a great reluctance on officials to consider cash transfers?
· In the case of India, cash transfers are finally happening and being talked about. What are the implications if not all five suggestions on cash transfers are satisfied?
· Is it really possible to get evidence on the poorest to ensure that programs to reach the poorest work?
· In low income countries in sub-saharan Africa, the coverage of cash transfers reach only a few percent of the poorest, only meets a small household expenditure, and donors focus on target groups. How can donors and international agencies support governments on cash transfers to the poorest? And how are cash transfers used in difficult contexts like in fragile states?
· Is there an international agenda or initiative on cash transfers to the poorest?