SHORT-SELLING THEMSELVES

And yet there is nothing in the data to suggest they are right to be so worried. As of 2014, 119 developing countries had implemented some kind of unconditional cash assistance program and 52 countries had conditional cash transfer programs for poor households.

Together, one billion people in developing countries participated in at least one of these.²⁴ The initial phase of many of these programs was implemented as an experiment. What is very clear from all these experiments is that there is no support in the data for the view that the poor just blow the money on desires rather than needs. If anything, those who get these transfers raise the share of their total expenses that go to food (i.e., it is not just that they spend more on food when they have more money, but they might even spend so much more that the fraction of food spending goes up); nutrition improves and so does expenditure on schooling and health.²⁵ There is also no evidence that cash transfers lead to greater spending on tobacco and alcohol.²⁶ And cash transfers generally increase food expenditures as much as food rations.²⁷

Even men do not seem to waste the money; when the transfers are given at random to either a man or a woman, there is no difference in how much is spent on food versus, say, alcohol or tobacco.²⁸ We are still in favor of giving the money to the woman, because it restores a little of the balance of power within the family and might allow her to do what she deems important (including working outside of the home²⁹), but not so much because we think that the man will drink it up.

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Source: Banerjee Abhijit V., Duflo Esther. Good Economics for Hard Times. PublicAffairs,2019. — 403 p.. 2019

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SHORT-SELLING THEMSELVES

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