It is Possible to Just Give Money to the Poor

Meghnad Desai of the London School of Economics recently suggested that, rather than ‘giving fifty billion dollars of overseas aid’, we should simply ‘find the poor and give them one dollar a week . . . That would probably do more to relieve poverty than anything else’. Two experiences in Mozambique of simply handing out money show this is possible. Payments to demobilized soldiers over a two year period and single payments to flood victims were of the order of magnitude suggested by Desai. Rural people had no difficulty cashing cheques and used the money prudently. The money stimulated the rural economy and thus had a development impact. Administrative costs were between 5 and 10 per cent, much less than in other aid projects. Using the Mozambique experience, this article concludes by suggesting that Desai’s proposed one dollar per person per week could be paid as a family grant bi-monthly, which would keep administrative costs low.