Uganda and Universal Basic Income
Uganda is a southeastern African country neighboring Lake Victoria, Rwanda, the Democratic Republic of the Congo (DRC), South Sudan, Kenya and Tanzania. Its population sits below 50 million people and although it has been one of the poorest countries in the world as of 2012, the U.N. determined that it made enormous leaps in eradicating poverty thanks to ambitious ideas and thoughtful programs. For example, Eight, a Belgian pilot project, highlighted the effectiveness of universal basic income (UBI) in places where extreme poverty is a problem. The Borgen Project spoke with Eight, which enacted its first program in 2017 and showed the rest of the world just what Uganda and universal basic income might mean to the fight against global poverty.

How Eight Began

Maarten Goethals and Steven Janssens founded Eight in 2015 after finding poverty in their travels hard to swallow. “We see a lot of inequality and that is so unfair. A lot of people think poverty is a character problem, but it’s a money problem.” That unfairness inspired them to develop actionable solutions and experiments. In this case, they launched a basic income pilot program in Busibi, a remote village, in 2017. The idea was simple; give every inhabitant (about 150 people) 16 euros per month and children 8 euros per month. with no strings attached. The money would transfer to mobile bank accounts that the people of Busibi could access by telephone.

While some might believe this to be a futile attempt at utopia, the academic literature supports this kind of unburdened cash transfer system as a means of raising communities out of poverty. The Borgen Project has profiled universal basic income programs in the U.K., India, Iran, Kashmir and other places. All this research leads to one conclusion: when people receive money and freedom of choice, they make remarkably astute decisions. As co-founder Steven Janssens said in his interview with The Borgen Project, “people deserve to be trusted.” Likely because of the freedom and dignity it allows, UBI yields remarkable results in lifting people out of poverty. Without mandates, universal basic income restores agency and allows people the opportunity to insist on what is right for themselves.

What it Became

Eight’s pilot program took place over the course of two years from 2017 to 2019 and immediately showed the work ethic of the villagers. Inhabitants built businesses and sent kids who would otherwise be working to school. Maarten Goethals noted that “Shops started up in the village and a new dynamism arose.” Free money worked, as Rutger Bregman said in his 2014 book “Utopia for Realists.” It turns out that eradicating global poverty is much easier than many think tanks make it out to be.

Ortrud Lebmann, chair of labor relations at Helmut Schmidt University, conducted landmark research about those who live in poverty and their “restricted opportunity to choose among different ways of life.” His research, in essence, confirms what Eight intended to study. The Eight pilot project proved just how necessary and effective freedom of options are for those with inadequate resources. Janssens noted how bizarre of a concept UBI was to many in Uganda and elsewhere. “The people of Busibi reacted with a kind of disbelief… That they would receive money without conditions. Aid is always project-oriented.” By lifting the onus of conditions, the environment improved.

The Results

After two years, the data appears irrefutable. Most people in the group spent around 50% of their money on food, investments, clothes, health and education. Self-reported happiness improved by 80%. Only 50% of children in the village went to school before the unconditional cash transfers began compared with 94.7% after. Twenty businesses populated the town compared to the two that stood before the program. All markers of poverty declined with the advent of cash and choice.

Eight now plans to bring its ambitious idea that began with Uganda and universal basic income to the Democratic Republic of the Congo. “EIGHT wants to find out if the people from the villages close to a mine can be given more choices.” The question is not only if it will work (the evidence suggests it will) but how it might work in a place where children work in mines and risk their wellbeing for a dangerous but lucrative practice. Will unconditional cash transfers facilitate less child labor in these mines? Previous experiments tend to predict just such an outcome.

For now, there is a film about Goethals and Jansens’s project entitled “Crazy Money,” set to debut later in 2021. What Eight did with Uganda and universal basic income was nothing short of revelatory. Although UBI is not new, this is further proof it represents an actionable solution against global poverty. Maarten Goethals and Steven Janssens provided more evidence for choice, dignity and compassion for those who live in poverty.

Spencer Daniels
Photo: Flickr

Universal Basic Income in Kenya
Imagine if one received free money from the government every month, directly into their bank account with no one asking any questions. It may sound too good to be true, yet that is the main premise behind universal basic income or UBI. Universal basic income in Kenya is going a long way toward fighting the results of the COVID-19 pandemic.

What is Universal Basic Income?

With UBI programs, governments, organizations or private funders deposit direct cash payments to citizens monthly. These deposits occur regardless of status or circumstance with no strings attached. This means no interest and no expectation to recipients to repay the money. UBI programs intend to supplement or even entirely replace other financial social programs and help those struggling financially. The goal of this financial aid is to prevent vulnerable groups from falling deeper into poverty. In addition, it works toward alleviating national poverty on a wider scale.

The idea of universal basic income has long been under debate with skeptics insisting that providing free money to the impoverished would only lower the incentive to work, bankrupt any government who would give it an honest try and fail to address the root causes of poverty. While these criticisms are well grounded, UBI has nonetheless collected a growing base of supporters. Early supporters of a UBI program date back to the Enlightenment, including political activist and philosopher Thomas Paine and French general and emperor Napoleon Bonaparte. In more recent years, supporters have included Silicon Valley giants Bill Gates and Jeff Bezos and South African billionaire Elon Musk. Others range from author Milton Friedman to Pope Francis.

UBI in Practice Globally

Perhaps surprisingly, countries all over the world have experimented with UBI programs. What may come as an even bigger shock is that it has been in use in the United States for the last four decades. Since 1982, Alaska has implemented the Alaska Permanent Fund, an investment fund that disperses a dividend of anywhere from $1,000 to $2,000 to every Alaskan resident including children. The results have virtually eliminated extreme poverty in the state. Extreme poverty refers to those living on $2 or less a day.

Outside of North America, UBI programs have undergone implementation in every continent except Antarctica, from Brazil to Japan with a varying degrees of success. This highlights the widespread capabilities and applications that are possible with basic income systems. However, 2020 introduced a new variable to the theory of UBI. How would a basic income system affect communities dealing with the adverse health and economic effects of a global pandemic?

UBI and COVID-19

The longest-running and most ambitious attempt at a universal basic income system is currently underway in Kenya. Since 2016, nonprofit GiveDirectly has been sending direct cash payments to more than 14,000 households in the Siaya and Bomet Counties of Kenya. The mission is to continue the program through 2028. In doing so, it will collect decades worth of data on the effects of UBI on poverty-stricken communities.

However, the unprecedented arrival of COVID-19 has brought disastrous effects to Kenya’s economy and will likely send millions into poverty. The unpredictable addition of a global pandemic has enabled researchers to examine the effects of an established universal basic income infrastructure. This situation provides invaluable insight into how a basic income system might help vulnerable communities cope with a large-scale crisis.

Based in the Siaya and Bomet Counties of Kenya the program split the recipients of cash payments into four groups. These groups included long-term, short-term, lump sum and a control group. For long-term recipients, every adult for the duration of the 12-year program is to receive $0.75 per day. This amount sufficiently covers food expenses and basic health and schooling needs.

The short-term recipients received the same amount for basic needs, $0.75 per day, for two years. The third group received a lump sum that amounted to a one-time payment of $500. Finally, the control group did not receive any payments at all. This allowed an honest comparison amongst villagers to evaluate the significance that UBI payments had on individuals who received payments.

The Results

Those receiving universal basic income in Kenya experienced better food security and were less likely to report experiencing hunger in the past 30 days. This resulted in a widespread improvement in overall rates of hunger. Hunger rates fell from 68% to 57%, with the strongest improvements coming from the long-term group of recipients.

Looking at general health including mental health, UBI recipients showed promising results. Results indicated that payments reduced the probability that an individual would seek medical treatment. Furthermore, households were around six percentage points less likely to report that a household member was ill. Research also suggests that payments reduced hospital utilization, which helped preserve hospital capacity. Having the peace of mind that at least one stream of income would remain steady certainly played a factor in improving the well-being of Kenyan’s facing economic uncertainty.

Universal basic income payments helped individuals stay resilient through the devastating effects of COVID-19. Nevertheless, basic income is still far from a silver bullet for fighting poverty. In Kenya, UBI was not effective at completely protecting recipients from economic hardship, and by nature, a UBI program will expose individuals to economic volatility and cannot guarantee complete financial protection.

However, payments allowed individuals a crucial advantage in holding on to basic needs such as food and healthcare in comparison to those without any basic income payments. This demonstrates that putting the infrastructure in place for universal basic income in Kenya can provide much-needed relief and security to citizens when they need it most.

Andrew Eckas
Photo: Flickr

UBI in KenyaIn 2019, former Presidential candidate Andrew Yang proposed a universal basic income and introduced many Americans to the concept. For the developing nation of Kenya, UBI has been an ongoing research project for years.

Universal basic income is a system in which the citizens of a country receive a recurring payment from the federal government for basic necessities such as food, housing and medicine. The goal is to lessen wealth inequality while fostering a higher standard of life regardless of one’s status in society.

Universal basic income in Kenya started in 2017 as a study to map the effectiveness of supplying money to individual villages. In each village, a different stipend was doled out with varying degrees of frequency. The $30 million UBI program was created with the help of GiveDirectly, a non-governmental organization dedicated to addressing global poverty through direct payments. In both 2019 and 2020, researchers followed up with more than 8,000 people involved in the study. What they found proves the success of universal basic income programs to improve food security, health, and mental and emotional well-being.

How the Cash is Distributed

For this study, it is important to note how the payments were allotted to the 14,474 households that participated. The researchers split counties in rural Kenya into four groups. The people in the first set of villages received $0.75 per day for 12 years. The second group received the same stipend but for only two years and was therefore never surveyed during COVID-19. The third group received a one-time lump sum of $500. Finally, the last division of villages was given nothing to act as a comparison.

Food Insecurity

The comparison group, which received no UBI, reported only 32% food security in the last few years. The three UBI groups who received payments reported a notable decrease in hunger between 5-11 percentage points. The study shows that the first group, which received a recurring amount during 12 years, experienced the smallest hunger levels. This suggests that UBI in Kenya can alleviate hunger, especially when provided in smaller payments over time.

Physical, Mental and Emotional Well-being

Universal basic income in Kenya also affects physical health. About a third of respondents without a stipend said they sought medical attention in the last month. However, those in the UBI groups were healthier, with fewer respondents reporting clinical visits or sick family members. Given the lack of COVID-19 cases in the respective villages, the pandemic did not change the findings.

The researchers also found that degrees of depression varied by the method in which the income was distributed over time. Mental health was considered low in the cashless group. Not all UBI groups benefited; however, the group provided with the $500 lump sum reported high levels of depression. Some researchers speculate that receiving a cash payment in regular increments is more beneficial to one’s mental and emotional well-being.

During the Pandemic

The COVID-19 outbreak has brought to light how beneficial a universal basic income program can be when faced with unforeseen financial setbacks like a pandemic. When the study researchers checked in with Kenya in 2020, the pandemic struck the world. Only 12 cases existed in Siaya and Bomet, where the study was being conducted. Kenya underwent a strict lockdown in March, pushing vulnerable people living in rural communities into even more precarious situations. The study showed that UBI recipients were less likely to engage in social activities or visit a clinic, both of which increase the likelihood of catching the virus.

While the study is new and not fully complete, good signs point toward a permanent UBI in Kenya because of the proven benefits. Universal basic income has the ability to offer financial assistance and stability to lessen the blow of the pandemic for Kenyans. With UBI, Kenya has the potential to help those in desperation and foster a higher standard of living for all.

– Zachary Sherry
Photo: Flickr

Rutger Bregman's Three Ideas to End Poverty
In the best-selling book, “Utopia for Realists,” author and Dutch popular historian, Rutger Bregman, outlines three utopian ideas to eliminate extreme poverty. Universal basic income, a 15-hour work-week and open borders are Bregman’s three leading solutions to creating an ideal global society. Bregman’s writings, interviews and fiery speeches, like the one he gave at the Davos World Economic Forum in 2019, reminds one of the importance of utopian thinking. Here is a breakdown of Rutger Bregman’s three ideas to end poverty.

Universal Basic Income

A universal basic income (UBI) is the first of Rutger Bregman’s three ideas to end poverty. UBI is an unconditional cash transfer that countries can give to citizens; the concept involves the allocation of a certain amount of funds regularly to cover essential living costs. Recipients of the grant are free to spend it however they choose. The idea has found support from a wide range of credible thinkers, including Dr. Martin Luther King Jr., economist Milton Friedman and Facebook co-founder Chris Hughes.

The longest-running UBI experiment is currently happening in Kenya. The charity GiveDirectly is paying more than 20,000 people roughly 75 cents per day. Less than $1 may not seem like a lot, but that amount is roughly what Kenya’s poorest make daily. Money from the nonprofit essentially doubles recipients’ annual incomes. GiveDirectly’s trial began back in 2016 and should span over 12 years. So far, the results have shown a positive impact. By using a cellphone-based payment system, the nonprofit has increased food consumption by 20 percent, reduced the number of days a child goes without food by 42 percent and increased revenue from livestock and small business by 48 percent.

Additionally, UBI might be around the corner for the United States. As the coronavirus health crisis unfolds, the U.S. government is moving quickly to jump-start the nation’s economy. In a rare bipartisan effort, Republicans and Democrats have signed a colossal $2 trillion stimulus plan which will include direct cash payments to American citizens. The Senate aims to send one or two cash transfers to American adults for $1,200, and an additional $500 for children. It is the most extensive emergency stimulus package in American history.

15-hour Work Week

In “Utopia for Realists,” Bregman reminds his readers that at one time the idea of a 15-hour work-week was not as inconceivable as it may sound today. In 1930, British economist John Maynard Keynes predicted that a 15-hour work-week would be inevitable by 2030. He believed that society’s real problem would be dealing with boredom from all the spare time. Alas, his prediction did not come true. In fact, the opposite is true in some cases, and people are working more hours than they did in previous generations.

In a world where time is money, it is hard to imagine the practicality of working less to earn more. However, Bregman insists that “productivity and long work hours do not go hand in hand.” Over time, fatigue and stress are causing burn-out in workers all over the world. The problem is so severe in Japanese corporate culture that it has a name for it, Karoshi, meaning death caused by overwork. There comes a point when working more becomes less productive.

Americans, on average, are clocking in 137 more hours than Japanese workers every year with 52.3 percent of people report being unhappy at work. Although average productivity has gone up 400 percent since 1950, real wages (adjusted for inflation) have remained stagnant. People are working more than they did 70 years ago and are not seeing the difference in payment.

But does working less pay more? A New Zealand based estate planning company, Perpetual Guardian, believes so. The staff experimented with working four days a week and have dubbed it a massive success. A survey from before the experiment determined that only 54 percent of employees felt they were able to manage a work-life balance. After implementing a four-day work-week, 78 percent felt they could. Employee stress levels dropped 7 percent and team engagement rose 20 percent. This idea of Rutger Bregman’s three ideas to end poverty would allow greater pay with shorter hours.

Open Borders

Open borders may be the most radical solution of Rutger Bregman’s three ideas to end poverty. Opening up the world’s borders to allow the free movement of people across any country makes many skeptical and afraid of societal collapse.

Development economist Michael Clemens argues that open borders would double global GDP by allowing the free movement of labor to become more productive. Clemens also dissuades fears of job loss and culture degradation pointing to the U.S. Chinese immigration ban that was in place from 1882-1965, and how after the ban lifted, none of the predictions became true.

Economist Bryan Caplan argues that nation-dividing borders more often act as a form of global apartheid. The level of economic inequality one experiences generally depends upon which country they were born in. Rutger Bregman states that 60 percent of someone’s income depends simply on their country of origin. With the enforcement of stricter border policies all over the world, poor people have little to no say in where they can live.

Rutger Bregman’s three ideas to end poverty are bold and unorthodox, however, some are conducting studies around the globe to determine their viability. Bregman’s ideas are utopian, and that is the point. Ending slavery, improving women’s rights and adopting a 40-hour work-week were once utopian ideas too. “Utopia for Realists “argues that it is essential to dream big, to create a better society for everyone.

Henry Schrandt
Photo: Flickr

Universal Basic Income in India
Universal Basic Income (UBI) is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement. This practically means that everyone gets the same amount of cash, regardless of their social or economic status. 

Universal Basic Income in India might soon become a reality. If India implements this program, it would be the first state-administered basic income program in the developing world. In a country with over a billion people, it would be a large-scale endeavor, but one that could improve the existing welfare system.

Pros and Cons for Universal Basic Income in India

In January 2018, Chief Economic Advisor of India Arvind Subramanian said in an interview with the India Times that he sees one or two states implementing Universal Basic Income in the next one to two years. UBI will allow the population to receive compensation to fulfill their basic needs and Subramanian argues that it will be an improvement over the current anti-poverty schemes in that are in place because the program would be easier to administer.

Supporters of this program also claim that a UBI would be an improvement over anti-poverty interventions and inefficient subsidies that have seemingly been largely consumed by the affluent and damage the country’s overall financial stability. Opponents of a UBI program claim that incentivize work, and that the government should focus more on funneling funds into education and health care.

Subramanian is not the only supporter of UBI, as the International Monetary Fund (IMF) also believes this program could be successful. The IMF estimates that the government could provide $35 a year to every citizen if the country eliminates food and energy subsidies.

Consequences of Universal Basic Income

Implementing a UBI and getting rid of energy subsidies would result in a sharp increase in energy prices. It is estimated that if the government implemented such a program, the cost of gasoline would increase by 67 percent, the price of diesel would increase by 69 percent, kerosene by 10 percent and coal by 455 percent.

India has been in a state of premature deindustrialization in recent years, meaning that the country is either partially industrializing or not industrializing at all. This is due to structural transformations due to changes in technology, making it hard for developing countries to become manufacturing powerhouses.

United Progressive Alliance Reform

India has already had progress in cash transfer programs, as in 2012, the United Progressive Alliance (a coalition of political parties) began reforming the government’s subsidy structure by making payments directly into beneficiaries’ bank accounts. This program was instilled to cut down the corruption, reduce leakages, eliminate middlemen, better target beneficiaries and speed up the transfer of benefits to eligible recipients. This program has been deemed overall as successful, but it remains a small part of India’s welfare infrastructure.

Since no country has implemented a long-term national UBI, India does not have a practical framework to make a comparison of whether the program will be beneficial for the country or not. So far, there are only theoretical ideas of this program. Developing a UBI program requires a high initial investment and may also require the country to scrap existing welfare programs. Countries implementing UBI pilots such as Finland will give India more data to draw comparisons with.

Universal Basic Income in India is a program that is gaining traction in the country. This can be attributed to complaints with the existing welfare programs, as well as the fact that the program is being supported by the Chief Economic Advisor of India and IMF.

Since there are no real-life examples of this program, one can only hope that its implementation would be beneficial for India and the country’s goal of eradicating poverty.

– Casey Geier
Photo: Flick