Viewpoint: Is Cash Better for Poor People Than Conventional Foreign Aid?

Wednesday, September 12, 2018

By Marc Gunther

In Matinza, a village in eastern Rwanda, Esther Nyirabazungu, a 63-year-old widow, lives with her son, daughter and two grandchildren in a hut with a dirt floor and no electricity or running water. Her life is hard, but not as hard as it was before she received six monthly cash donations worth about $100 each, with no strings attached, from a United States government trial program.

Her family had been malnourished, so Ms. Nyirabazungu first bought corn, soybeans, sorghum and a small amount of beef with her newfound funds. Then she purchased four goats, which cost between $28 and $46 each, and two chickens, which cost about $5 apiece. The goats had babies, which she now sells for cash to buy more food.

“The life I was living before and the life I am living now are very different,” she told me when I visited. “My kids are now eating eggs. They now eat meat. We were sleeping on the floor. Now we have a mattress.”

Ms. Nyirabazungu’s new life and the gratitude she expresses make her experience a data point in a bold initiative by the United States Agency for International Development, or U.S.A.I.D., that is intended to find out whether conventional projects to help the world’s poor — by giving them chickens, textbooks, toilets, job training or fertilizer — do as much good as simply giving people money and letting them decide how to spend it.

Photo courtesy of Pexels.

Source: New York Times (link opens in a new window)

cash transfers, global development, poverty alleviation