To end extreme poverty, give cash — not advice | Rory Stewart
Sep 11, 2024
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Rory Stewart, a former UK Member of Parliament and advocate for unconditional cash transfers, challenges traditional development aid approaches. He argues that many global initiatives waste resources and fail to help the poor effectively. Instead of advice, Stewart promotes giving cash directly to those in need. He shares success stories from Rwanda, illustrating how cash transfers improve health, education, and economic stability. By focusing on real-world outcomes, he emphasizes the importance of respecting the choices and dignity of those living in poverty.
Rory Stewart argues that traditional aid often misallocates resources, suggesting a focus on unconditional cash transfers to effectively combat poverty.
Innovations in technology, like mobile banking and AI, are revolutionizing cash assistance delivery, empowering individuals to make informed financial choices.
Deep dives
The Reality of Extreme Poverty
Extreme poverty remains a pressing global issue, affecting hundreds of millions of people who cannot meet their basic needs such as food, clothing, and shelter. Despite some progress in reducing poverty rates in regions like China, the absolute number of people living in poverty continues to rise, particularly in sub-Saharan Africa, where figures have escalated from 170 million in 1980 to 430 million today. The inefficacies of international aid projects often contribute to this dire situation, as seen in a project where significant funds were allocated but resulted in minimal impact—a glaring illustration of mismanagement and poor resource allocation. These experiences highlight the necessity of re-evaluating our approach to aid and development to effectively combat extreme poverty worldwide.
The Case for Cash Transfers
Unconditional cash transfers have emerged as a revolutionary approach to combating extreme poverty, significantly outperforming traditional aid strategies that often focus on teaching skills rather than providing necessary capital. Programs that distribute cash directly to individuals have demonstrated remarkable results, such as increased neighborhood investment, heightened school attendance, and improved healthcare outcomes. Research indicates that the multiplier effect of cash transfers generates even broader economic benefits, helping not only the recipient but also the surrounding community. This shift in focus from aid-as-patronage to cash-as-empowerment drastically alters the dynamics of poverty alleviation.
Technology's Role in Poverty Alleviation
Advancements in technology are reshaping the landscape of poverty alleviation, enabling efficient delivery of cash assistance directly to those in need. With the rise of mobile banking platforms, beneficiaries in regions like Togo can receive funds almost instantaneously, allowing them to respond proactively to economic needs or crises. Additionally, artificial intelligence aids in predicting disasters, ensuring that help arrives before the onset of extreme weather events, thereby preventing further hardship. These innovations not only streamline the process but also empower individuals to make informed choices about their finances, enhancing their dignity and autonomy.
Are traditional philanthropy efforts actually taking money from the poor? Former UK Member of Parliament Rory Stewart breaks down why many global development projects waste money on programs that don't work. He advocates for a radical reversal rooted in evidence: giving unconditional cash transfers directly to those in need, a method that could unlock the secret of addressing extreme poverty worldwide.