Does Cash Aid Help The Poor — Or Encourage Laziness? : Goats and Soda A major study in Zambia showed the benefits of just giving poor people money with no strings attached. But the government isn't entirely convinced. Here's why.

Cash Aid Could Solve Poverty — But There's A Catch

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It's an emerging idea in the fight against global poverty. Instead of offering poor people traditional aid, such as seeds or job training, why not just give cash? NPR's Nurith Aizenman traveled to Zambia where they've just finished a major experiment.


NURITH AIZENMAN, BYLINE: We're in a classroom in a village called Yuka. Outside, the kids are at recess. In here, the room is crammed with adult women, all listening intently as an official at the teacher's desk calls out names from a list. He gets to number 76.

UNIDENTIFIED MAN: Likezo Nasilele.

AIZENMAN: Likezo Nasilele.


AIZENMAN: A petite 30-year-old in a green sarong and flip-flops steps forward. The official reaches into a metal box and starts handing her cash.

UNIDENTIFIED MAN: Three, four, five, six...

AIZENMAN: Pocketing the money, Nasilele is all smiles.


AIZENMAN: These payouts have changed her family's life. She's been getting up to $18 every other month for over two years. Before that, she and her husband couldn't even afford to feed their kids properly. But they were able to use the cash to start a bunch of businesses. We've more than doubled our money, she tells me, speaking in the local language, Lozi.

NASILELE: (Through interpreter) We are now all set.

AIZENMAN: Hundreds of other couples tell a similar story. The payouts were an experiment by the government. Officials wanted to see what would happen if they gave some of the country's poorest young families a steady stream of cash. The results have been so impressive, the government has now decided to massively scale up cash aid - with one caveat. They're only going to give the money to people who can't really work - the elderly, the sick, single moms with lots of kids. They're not going to give it to the kinds of families that made up the vast majority of this experimental program, families like Nasilele's, where there's both a mom and a dad who's able-bodied. Esther Ngambi is the official in charge of the new cash program.

ESTHER NGAMBI: We had to strike a balance. What was going to be socially acceptable?

AIZENMAN: Socially acceptable - this is a story of how our gut feelings about which poor people deserve our help - and which do not - can be so entrenched, they led a government to ignore the radical lesson of its own experiment, to take a pass on a transformative solution to poverty. When the possibility of cash aid was first floated in Zambia, it seemed totally implausible.

NGAMBI: People would say, you're just putting money into a bottomless pit.

AIZENMAN: The year was 2009. Researchers and donors were pushing the idea. But in Zambia, officials were wary of giving people money with no strings attached.

NGAMBI: Maybe they will use it for beer, and it won't be put to good use.

AIZENMAN: And even if people didn't waste the money on vices, as soon as they spent it, wouldn't they be right back where they started, needing more? So officials settled on two pilot programs. The first gave the money to any mother of a young child, like Kezo Nasilele from the school. The second targeted people who couldn't work - the disabled, the elderly. And the government commissioned a study of these pilots. Ashu Handa conducted it. He's a professor at the University of North Carolina. He found that people didn't waste the money, but he notes that Zambian officials also insisted on checking...

ASHU HANDA: That in fact the money is used not just responsibly but actually productively.

AIZENMAN: Are people able to invest it in ways that make them more money, maybe even grow the wider economy? A few years later, when those results came in...

HANDA: Holy smoke - they were incredible.

AIZENMAN: In both versions of the program, the recipients managed to boost their spending, which is effectively a measure of their income, by more than 50 percent over what the government had given them. That's head and shoulders above the returns from traditional aid.

HANDA: You know, I've sort of never seen impacts so large in my life (laughter).

AIZENMAN: And the young families, because they were able-bodied, achieved this by doing something remarkable. They became entrepreneurial.

AIZENMAN: Is it those huts over there or even further?

I get a feel for this when I walk home with Nasilele to meet her husband and four kids.

CHIPOPA LIONI: (Laughter).

AIZENMAN: They live in a round hut made of sticks and mud. Before the cash program, the couple mostly worked day jobs in construction, pulling in about $30 a month - not even enough to cover basics, says Nasilele - soap, shoes, food.

NASILELE: (Through interpreter) We would have only one meal a day.

AIZENMAN: And her husband, Chipopa Lioni, says he had an idea for how to make more money.

LIONI: (Through interpreter) A business to sell mats, reed mats.

AIZENMAN: He pulls one of the mats out to show me.

LIONI: (Speaking Lozi).


AIZENMAN: It's about 6 feet by 10, woven from the reeds that grow in the marshes around here. People use them to sit on, as fences, walls for their homes. In this area, they only sell for like 30 cents. But Lioni thought, if he could buy up a bunch, rent a canoe and paddle them across the marshes to this big town, he could probably sell them for much more.

LIONI: (Through interpreter) I figured we would need about $120.

AIZENMAN: So when the couple found out Nasilele was going to get the government payments, they decided to save every penny for a mat business. It took more than a year.

Do you remember when your wife came home from getting that last payment?

LIONI: (Laughter).

(Through interpreter) Yes, I can remember that day well. I said to her, now everything's going to be OK.

AIZENMAN: And he was right. Their first trip selling mats in the big town, they turned a profit of $340. Now, it takes weeks to purchase enough mats. On their last trip, their canoe capsized in choppy waters, and they lost every single one. Still, when I ask Lioni, now that the cash program is being phased out, will you be OK? He shrugs it off.

LIONI: (Through interpreter) We're not worried that we'll ever go back to that life. Now we're on another level.

AIZENMAN: The researcher, Ashu Handa, says the implications of this dynamic were huge. Forty percent of Zambia's population is extremely poor. Here was a way to help them graduate out of poverty.

HANDA: That seems to be, in some sense, the magic bullet. Like, this is it.

AIZENMAN: Best of all, Zambia can afford it. They've got vast reserves of resources like copper. So why aren't they going for it? Ngambi, the social welfare official, says there'd been gripes from the public - young women collecting a government check just for having a kid? People were calling the women divas.

NGAMBI: Yeah, we're turning them into these divas.

AIZENMAN: As for the dads, if they can work, why should they be on the program? But most important, Ngambi says, Zambia's top leaders shared that queasiness. They're putting in tens of millions of dollars to support people who are not able to work. But Ngambi says it was clear they would never back a plan to include able-bodied people.

NGAMBI: No, we were not going to get support because everybody would be saying that you're trying to give money to lazy people and that you're encouraging laziness.

AIZENMAN: That view you change, she adds, but she's not sure she'll be alive to see it.

Nurith Aizenman, NPR News.


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