Fact checking universal basic income: can we transfer our way out of poverty?

by Berk Ozler
The World Bank Blog, 27 February 2017

Read online at:
http://blogs.worldbank.org/impactevaluations/fact-checking-universal-basic-income-
can-we-transfer-our-way-out-poverty

The New York Times last week discussed the universal basic income (UBI) experiments in Kenya by GiveDirectly. You can look forward to more pieces in other popular outlets very soon, as soon as they return from the same villages visited by the Times. The Brookings Institution, recently calculated that the global poverty gap – meaning how much it would take to get everyone above the poverty line – was just US$ 66 billion. That is roughly what Americans spend on lottery tickets every year, and it is about half of what the world spends on foreign aid. That means if we just were able to divert 50% of the current foreign aid budget towards cash transfers, we would eliminate extreme poverty. But, is that really true? The answer is: “not even close.” So, the author’s plea to media outlets covering this topic: consider requesting an interview with a few researchers who spent their entire careers worrying about poverty reduction. There are a lot of reasons for us to consider UBI in the portfolio of possible policy choices towards poverty reduction. But, a little restraint and sticking to the existing research and facts would go a long way in creating a healthy debate.

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