Tuesday, July 1, 2014

A Case for Cash for the Poor

In the wake of Chinese tycoon Chen Guangbiao’s failed attempt last week to hand out $300 each to hundreds of homeless people in New York, a Columbia University political scientist speaks up in The New York Times for the growing practice of fighting poverty by giving cash to the poor.
Mr. Chen had publicly promised to give money to poor New Yorkers at a free lunch in Manhattan last week. The philanthropist asked the New York City Rescue Mission to supply guests for the event, but the charity agreed to cooperate only if he withheld cash handouts, which mission officials feared recipients would spend on drugs and alcohol.
“This pessimism (and paternalism) is common and understandable. But evidence from other countries suggests we should be more optimistic,” Christopher Blattman of Columbia’s School of International and Public Affairs writes.

Mr. Blattman says his work with nonprofits and government agencies in Africa and other research on cash-transfer programs indicate that the poor “do not waste grants” but instead most often use the money to address immediate food and housing needs and to start small businesses.

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