JOSH: Hello, and welcome to Clearer Thinking with Spencer Greenberg, the podcast about ideas that matter. I'm Josh Castle, the producer of the podcast, and I'm so glad you've joined us today. In this episode, Spencer speaks with Miriam Laker about the value of direct cash transfers in fighting poverty.

SPENCER: Miriam, welcome.

MIRIAM: Thank you, Spencer. Happy to be on your podcast today.

SPENCER: Should we be giving some of the poorest people in the world cash directly, rather than trying to give them services?

MIRIAM: My answer to that is a hundred percent yes. We should be giving people living in poverty cash directly. And in addition to that, it should be unconditional. And the reason I'm saying that is because I believe in giving everyone a chance. If you think about it, arguably, most people living in poverty were born in poverty, and they have never been given a chance to actually get out of poverty in ways that work best for them. So I believe that giving them cash and giving it unconditionally will give them this opportunity to try and get themselves out of poverty.

SPENCER: A lot of nonprofits prefer to give services. I would say almost all of them prefer to give services. Why do you think that is? Why do they not give cash more often?

MIRIAM: Spencer, I think the reason most people, most organizations, don't give cash directly — and it also boils down to the way people who help, even their relatives, prefer to give help — I think it's because we come from the perspective of we know what people need, and so we give people what we would need if we were in their shoes, and forget that people in their shoes have a different sense of what they need. And also we think that people who are living in poverty are living in poverty because they are lazy. They're living in poverty because they have no aspirations, because they're druggies and because they're alcoholics. But interestingly, last year, we were talking to a group of our recipients in Rwanda. We asked them that question and said, "Is it true that people living in poverty do not plan for the future?" And Spencer, his answer was really powerful. He said, "We plan based on how much money we have. If I have enough money for the next meal, then I plan for the next meal. But if I have enough money to plan for something bigger — a year, two years, five years down the road — then I will plan for one year, two years, and five years down the road."

SPENCER: That's really interesting because you could look at people living in poverty and say, "Look, they're not planning ahead," but then you may not realize that that actually is, just because of their circumstances, they don't have the ability to plan ahead; whereas, if they had some freedom, if they had some more cash, maybe they could do longer-term planning.

MIRIAM: Absolutely. And I totally agree with you on that because, if you think about the way human beings are wired, we plan based on what we either have immediately at hand or what we know that we are going to get in the near future or the distant future. For a person who has been born and has lived all their lives in poverty, what they have is so little that all their planning is normally planned around that little that they have. And so once again, when you give them a large lump sum of cash transfers — because that is a model that we use at GiveDirectly — it is surprising some of the things that people do with it. One of the examples that never leaves me is a gentleman in Kenya. This gentleman decided to buy music instruments with his cash transfers. First of all, Spencer, if you notice, no one will ever think giving music instruments is the way to get someone out of poverty. Anyway, so he goes out and he buys this speaker, and he gets home and finds that the speaker — it was secondhand — that there was a beehive within the speaker, meaning the speaker could not be used for music. And guess what he did. He turned it into a beehive and, right now, as we speak, he's a bee farmer. He's farming honey. People can actually come up with solutions if you give them the capacity to come out of poverty.

SPENCER: I think that one of the arguments that people have for giving services is they'll say, in very poor communities, there might be things that could really benefit people but people don't have access to. An example might be vaccines of a certain kind, or certain kinds of healthcare, or even devices — maybe for farming — that people don't have access to, that could improve their crops and so on. What do you think of that kind of argument?

MIRIAM: That is a very plausible argument, and it makes absolute sense, because there is a world in which you will have all the cash that you need, but you have nothing to spend it on, or the things you want to spend it on are not available. And so, for that reason, we believe that the availability of infrastructure actually augments the impact of cash transfers. For instance, if someone receives cash transfers and needs to receive medical attention, they are more likely to travel to the health facility and to pay for the services that they need in there. But also, we've seen, on the other hand, that sometimes the services come to the community that has, suddenly, this increased ability to consume. We've seen, for instance, in one of the programs we did in a very rural part of Uganda — very rural, far away from the markets — once the community received cash transfers, business owners from other villages far off moved into the village to offer their services there. It just works both ways. Either give cash plus the access to the infrastructure or the services that people need or sometimes give cash and the services will come and find the people where they are.

SPENCER: I don't think this is the motivation of your organization, but it's interesting to me how libertarian a solution this is. It's basically saying, "Look, if you give people cash, they then will have the freedom to buy whatever goods are most beneficial to them," and if you trust people to make better decisions for themselves than you trust other people to make decisions for them, then, well, okay, you're actually going to have a better solution if you give them cash directly. And not only that, but it will change the nature of the market. If suddenly people have cash, then other people will start offering them services, which will provide solutions for them.

MIRIAM: That's absolutely right. One of the things that, when you think about giving services or bringing aid in kind... I'll give an example. Let's say you notice that this community is living in poverty, and you believe that they need food because they're going some days without food, and suddenly you bring grain into the community. What you're forgetting is, one, there's someone in that community whose livelihood is selling grain, and so suddenly you've given everyone grain, and this person can no longer earn any income for himself. The other thing that you're doing is, you're giving someone who is living in a very small house where maybe the floor is made of earth and the roof is grass-thatched, you're giving them a sack of grain to keep in their house, and the house is open to the elements. And so now they're having to struggle with where to put this and how to make sure that it doesn't get moldy. But if you give someone cash transfers, they're going to look for their solution. What is the solution for my family right now? And the other interesting thing about cash, as you probably know, is that cash is one of those fungible things. It's like a fungus, right? It just suddenly grows. You can use it for so many different things. The same amount of money that you receive, you can use it to improve your house, you can use it to get water to your house, you can use it to pay school fees for your child. So that is also the other aspect. Cash transfers are able to meet multiple needs at the same time, and yet all of those needs would have had to be met by different organizations providing those specific services.

SPENCER: Another issue this brings up, besides libertarianism, is the issue of rationality. If you study the literature on how humans make decisions, you find that we as humans are riddled with biases. We have so many different biases. For example, we'll overemphasize the really short-term benefits at the expense of the longer-term benefits, or we'll make rapid judgments based on little information and so on. And so there might be some people that say, "Well, if you give people a bunch of cash really quickly, maybe they're going to spend the money in irrational ways." And even if you have no prejudice against poor people, you might say the same of anyone. You might say, "Well, people just tend to make bad decisions," and so maybe you could help them more by giving them something that you know is useful to them, to nudge them towards using something more usefully. It's sort of like if you're in New York and you pass by a homeless person, the difference between trying to give them food versus trying to give them money, where you might worry that they might use the money in less effective ways. What do you think of that argument?

MIRIAM: Spencer, this concern is something that we get several times when we are talking about the work that we do at GiveDirectly, and I really think that it comes from the fact that we have a paternalistic approach to the way we think of helping people. We've already taken a step back and decided that, when people receive a lot of money, they're going to spend it irresponsibly. So either I'm going to give them what I want them to receive in terms of some kind of aid and the like, or very small amounts. Interestingly, a lot of research has shown that when people receive in-kind aid — for instance, a bag of rice — many people actually sell that bag of rice so that they have money to meet their other needs. Also, very recently, we got results from one of the evaluations of one of the projects — a 12-year project — that we are running in Kenya. It's right now the largest universal basic income study in the world. But in that study, we were comparing three groups of people. One group of people, entire villages received $500 as a lump sum, every adult in the village. And then there were villages where every adult received $22.50 on a monthly basis for up to two years. And then there's a third group of villages where every adult is receiving $22.50 and they're going to receive it for up to 12 years. At the two-year time point, the researchers who are evaluating it found that people that received the large amount of cash transfers at once immediately invested it into some form of business. In other words, they were thinking in terms of, "Since I have this big amount of money, can I invest it in something that is going to bring me more money in future rather than spend it all on things that are not lasting right now?" And interestingly, even the group that is set to receive cash for up to 12 years, what they decided to do was to form some kind of savings groups where they would pool their money, create a large amount of money, and then give it to one person in that group who then would invest it in a long-term investment. So people in poverty, interestingly, are not very different from people that are not living in poverty. And many times, we find that they actually put the money that we give them to better use than we would have put to use. We give, on average, one thousand dollars per household, and the things that people are able to do with this money is usually very baffling, even for us who are doing this work.

SPENCER: Could you describe some typical uses of it?

MIRIAM: Happy to do that. There are multiple examples. I'll give an example from a place in Northeastern Uganda. This is a place called Karamoja, the poorest place in Uganda, which has a nomadic community. Billions of dollars of aid has been given to that community. When we started working in that community, giving people large lump sum cash transfers, one gentleman said that what he did with his first batch of transfers was to lease land — agricultural land — and to plant rice. And then when he harvested the rice, he used some of the money to improve the quality of the house he and his family were living in. And when he did that, he made part of the house into a retail shop. So now he has a retail shop in there, and then he used part of the money that he got from the rice to then lease more land and grow more rice. And so now suddenly, he has this cycle of income from multiple places. Another gentleman in the same community went out and bought a small car, and now that has become the village taxi or the village car, taking people to hospital, taking people to urban places that are a bit of a distance away from where they live. So these are some of the creative things that we've seen people using their cash for.

SPENCER: Those are just examples because they have positive ripple effects in the community. Now there's a car, other people can benefit from that car being there, or now there's a store, other people can benefit from that store. But I'm also interested in what are the most typical uses? If you break down how people use it, what is the most common use? What's the second most common use? And so on.

MIRIAM: What we've seen — and it's a reflection of the fact that our recipients are living in extreme poverty — when we give cash transfers, the first thing that many people do is to meet their immediate basic needs. The family suddenly has food and diversity in the food that they eat. The children's school fees are paid. The family is able to buy clothes and meet immediate health needs that the family has. And what is left over is then put into a business. That is the order that we've mainly seen. Put into a business, people are purchasing livestock; that could be cows, goats or chickens. But like I said, these are the typical ways people use their money, including also improving the quality of their households. And you know what is funny? Initially, with our very first project, everyone was shocked. They're like, "Why would someone living in poverty, instead of starting a business, spend some of the money improving the quality of the house they're living in?" Because most of the recipients were living in houses that were grass-thatched. And in interviewing the recipients, they said, "You know, when I changed my roof from grass to a metal roof, first of all, I'm not going to have to replace my roof every year, so that cost of replacing my roof is gone. Two, my children are going to sleep in a house that does not leak even when it's raining. Three, when it rains, I'm able to put a tank outside and capture rainwater. Four, because I no longer have a grass-thatched roof, we don't have mosquitoes breeding in the roof, and therefore my children are not going to get malaria." So those are some of the very creative things that people do. But what always surprises me is the reasoning that everyone has for the way they choose to spend their money.

SPENCER: Yeah, it's so interesting because I've heard about people using cash transfers to improve their roof. But I didn't know about these underlying reasons. And those seem really compelling; those seem really smart reasons. But if you just hear they're replacing their roof, that may not sound very significant.

MIRIAM: Exactly, exactly, and then it just goes to show you that people know what they want. People know what is best for them. But most times, they are not achieving these because they're not capacitated to make these changes in their own lives.

SPENCER: Let's talk about business in these countries. Because a lot of our listeners are in the US, if they think about business, I suspect they might have a different notion of what that means to invest in a business. So what are the sorts of businesses that people are starting?

MIRIAM: There have been a number of businesses, but I'll give you some of the examples. One of them is the motorcycle taxi. In many parts of East Africa, it's called the boda boda. These motorcycle taxis have been shown to be great not just in taking people from one place to another, but in many places, they actually act as the community ambulance. That is one thing that people get into. The other form of business is agriculture. A lot of people get into agriculture, and they're able to improve the quality of their crops and also able to access markets. Consequently, we've seen in a number of peri-urban areas, people get into IT-type things. They're either buying and selling phones or, because most of the places we work do not have electricity, they're charging phones for the community. We've also had people getting into other agricultural output-type activities like opening grain mills or doing wholesale of agricultural produce. Those are some of the businesses that people do: could be cooking food to sell, so people open a small restaurant that serves the community, and there've been multiple others. But for me, the most interesting one was a gentleman in Kenya who decided to buy music instruments. This is my second music instrument story. Most of the people in this community were buying goats, and he bought music instruments. And when we asked him why he chose to buy musical instruments, he said, "You know, not everybody wants a goat." And what is interesting, Spencer, is now that his community is better off — because the economy has been improved by the cash transfers, and people are able to afford things like parties and go dancing — and guess who provides the entertainment in those events: this gentleman who has instruments and now has hired a number of people to be part of his band. Those are some of the businesses that we are seeing; very creative ones sometimes.

SPENCER: Could you give us a bit more color on what these communities are like? Because, as I understand it, you're really trying to find some of the poorest communities in the world that you can also distribute money in, because you need those two things: the extreme poverty, but also that you can reach these communities. Tell me a bit about the kind of communities you end up finding.

MIRIAM: A lot of our work has happened in the more rural parts of the world, especially Africa, and most of the rural parts of Africa are actually hard-to-reach places. When you look at some of the work that we've done in the Democratic Republic of Congo and in Liberia, these are places that are very hard to reach. Our teams sometimes spend days just trying to get there, or have to travel on boats to get to these communities. And in many cases, we've had to work with mobile phone network providers to even set up boosters in those communities because — I didn't mention this — we don't give people cash as physical cash. We actually send it through the mobile money system, therefore getting them financially included. So it's usually very rural communities, people living in grass-thatched houses, people living in single-room houses. There are many subsistence farmers. Majority of the people that receive our money end up being women, people that are far from infrastructure like schools and hospitals. And even when the infrastructure is close to them, sometimes they have inadequate supplies, like not enough medicine, not enough teachers or not enough textbooks. Those are the typical communities that we work with. But we also do work with communities like refugee communities that have moved to countries and have lived in those countries for a long time, and usually the issues they are struggling with are very similar to the ones that the citizens of the country are struggling with in terms of poverty.

SPENCER: How large are these communities, usually, and how tight-knit are they? Is it a pretty strong group where everyone knows everyone and is helping everyone, or are they a bit more diffuse?

MIRIAM: Most of them are communities. In most rural settings in Africa, communities know each other. The way we do our cash transfers is, when we go to a community, everyone in that community is eligible for cash transfers. They have the option to opt out if they don't want to. And normally we work with formal administrative units so we find out what the boundaries are, and that is what we use as our boundaries. And most of these communities know each other; either they are friends, or they know each other by virtue of the fact that they're in the same geographical location, or they are relatives. We see that a lot in many of the communities that we work in.

SPENCER: Now correct me if I'm wrong, but my understanding is that you didn't always give money to a whole community at once. Is that true? Like in the early days of GiveDirectly, you sometimes would give it to just individual families?

MIRIAM: Yes, that is correct. This is the concept of targeting. When GiveDirectly started, first of all, the objective was to get cash to the poorest people in communities. The way we used to target in the very beginning was defining poverty based on the quality of someone's roof. So when we went to a community, we targeted only houses that had a grass-thatched roof — because we believed that that was a measure of poverty — and those are the only households that received cash transfers. But very quickly, we learned that, because many of these communities are either close-knit — like I have just explained — or just live close to each other geographically, it caused a lot of tension in the communities. There was jealousy; people felt it was very unfair because a number of people who live in houses that are not grass-thatched are actually also living in poverty as well. And also just recognizing that, while the majority of the community is in extreme poverty, even those who are marginally wealthy are actually still in poverty. They are at the poverty line or slightly above it. And so based on that experience, we made a decision that, wherever we work, everyone in the community is entitled to receive a cash transfer. And if we are working with external donors who have a specific preference — for instance, if their preference is children — then we explain to the community that this money that is coming in is only meant for households that have children within a certain age range. That is very objective; it's easy to explain to the communities. And in cases like that, we then don't get issues of tension and jealousy because people realize that this was really fair. "My house doesn't have a child that fits that criteria, so it is the reason why I did not receive cash transfers."

[promo]

SPENCER: So in some communities, money is not just an indicator of what someone can buy, but it also influences social status and how people look at each other. I'm curious: when you go into a community and you give cash, do you think it changes the social status dynamics of how people view each other?

MIRIAM: Good question. First of all, because we give cash to everyone in the community, we avoid the stigma that is associated with poverty. Studies have shown that, in situations where people are targeted to receive whatever form of aid it is, the people who are targeted sometimes feel 'less than' in the community because the fact that they are targeted is proof that they are the poorest of the poor. So giving cash to everyone is great because then everyone feels equal, in a sense. There's no stigma that happens. We've also found that, when people receive cash transfers — this is just in conversation with a number of our recipients — people have made statements like, "I can now stand up and speak in public." We've had people suddenly ready to run for public offices because they are no longer ashamed of their poverty. We've actually had situations where people changed their lifestyles completely. I'll give an example. In Kenya, there was a gentleman who had broken up with his wife, was living by himself; he was actually a drunk in the community. But after he received cash transfers, his family came back together. He started fishing, bought a fishing boat for himself. And when we asked him what happened, the gentleman said he used to drink a lot because he was really ashamed of himself. He couldn't provide for his family like he believed the man was supposed to. But once he got this cash transfer, all of that was overturned, and suddenly he has this pride in himself, pride in his family, and he's able to stand up and speak — he said, "Like a man" — in the community, but also in his household. So those are some of the examples that we've seen.

SPENCER: What do you find to be some of the biggest challenges of giving cash in these communities?

MIRIAM: One of the biggest challenges, as I alluded to earlier, is some of these communities are very remote and hard to reach. We try as an organization to keep what we call our efficiency very high. And by efficiency, I mean, of every dollar that we receive as a donation, we want to give at least 90 cents to the recipients. But sometimes it's hard to reach them. We have to use multiple ways to get to them, and that sometimes costs us as an organization. The other challenge, which I think is the bigger one, is the funding constraints. We really wish we could give more people cash transfers, but it's sad because, based on the budget that we have, we have to go to communities and explain to them that what we have is just enough to give to some members of the community and not everyone. And for me, as a person working in this field, that is the biggest challenge that we have. We really wish we could have more money to be able to reach more people with the same kind of service, because we've seen the impact that it actually has on people's lives.

SPENCER: I thought though that now you give to everyone in the community, rather than just some people.

MIRIAM: That is correct. But remember, like I said, we determine the geographic area we're going to give cash based on the formal administrative boundaries. So sometimes the neighbor is on a different boundary, and yet they know each other. We have places where the difference is, literally, a road, a path, that is between the two administrative units. So people on one side are receiving cash, and on the other side are not receiving cash, but they're all living in poverty at the same rate.

SPENCER: I see, because technically the road is the demarcation point between the two villages, and so you don't have enough money to give to both of them, so you give to one of the villages because it's maybe poorer. How does that affect the social dynamics between villages?

MIRIAM: Just correcting, we're not giving to the other village because it is poorer. These are normally villages that are equally poor but, because the resources are constrained, we are going to have to limit it to a well-defined, formally-defined area for the purpose of fairness. So how did it affect the social dynamics? It can go both ways. There is a project that we run in Kenya in a place called Siaya, and we have a group of external researchers who are evaluating the impact of these cash transfers. And what they found is that even households that have not received cash after two years — so we have the results from the two-year time point — their ability to afford basic needs is exactly the same as the households that receive cash transfers. We call this a spillover effect. There's a positive spillover that happens. Because the local economy has been improved, even those that did not receive cash transfers benefit. The other thing that we've also seen is, because many of our recipients are wage laborers, when they receive cash transfers, they start their own businesses, which means there's a labor gap that is created. And we've noted that a number of people from surrounding communities that did not receive cash come and take up those jobs, and also the cost of labor goes up in these places that have received cash transfers, meaning these people from the surrounding communities now are able to get a better wage than they would have got had we not done cash transfers in those areas. But of course, there's going to be complaints here and there. People are saying, "Why were we not chosen while the other community was chosen?" Some of them boil it down to luck or bad luck for that reason. But yeah, there's that longing for, "I wish our community was receiving cash as well." Sometimes they're asking us when their chance is going to come. We don't know how and how much money we'll get when. It is hard for us to make any commitments to them that, "You know, after one year, we'll be able to come and give to your community as well."

SPENCER: Yeah, it's a funny thing about cash where, if someone gets cash, well, they either save it or they spend it. If they spend it, they're essentially giving it to someone else, hopefully in exchange for something that benefits their life. If they save it, well, depending on how it's saved, often, someone else can borrow it, or it could still be used in some way. So this funny way where cash, it's not destroyed; it just kind of moves around. And so if you inject in a community, hopefully it continues to percolate around that community. Maybe eventually it just diffuses out into broader society. But it's interesting to think about how it's not just about giving cash to one person; giving cash to one person also gives it to the community they're in.

MIRIAM: That is really true. Still referring to the same project that I was talking about that was evaluating how cash affects the local community and the local economy, you would think, if I give one dollar to this community, even when the person spends it, it will go out as one dollar and the value will remain one dollar. But we found a very interesting multiplier effect. We found that there was a 2.5 times multiplier effect. Every dollar that we sent to that community, in this sense, multiplied itself to 2.5 dollars, which was absolutely interesting to learn. The impact of the one dollar that we sent to the community was more than twice the impact of what we thought it would have in that community. So you're right. You give money to a community; whether someone is saving it, they might be saving it in a village saving scheme where it is loaned to someone who then pays back with interest. And it's just amazing, the things that money can do when it goes out to a community.

SPENCER: At the most basic and fundamental level, it seems to me that what you're taking advantage of, in order to benefit people, is this idea that, the less money you have, the more money benefits you. So if you have a wealthy donor, let's say in the United States, they have a thousand dollars and that thousand dollars doesn't really do that much for them; maybe it helps them a very, very slight amount. If you move that thousand dollars to someone who has almost no money, that thousand dollars benefits them tremendously. And you see this reflected in happiness research or life satisfaction research, where you tend to find a logarithmic relationship between income and happiness. As you get more and more money, it continues to make people happier, but not very much. You get marginally less and less benefit. So if you take someone who's way at the beginning of that curve where they don't have much money, they can actually improve their lot a tremendous amount for relatively little money.

MIRIAM: Yeah, that is absolutely true, and I really think one of the ways that a person who has maxed out the ability to be happy with money can get a little happier is by helping other people. So if you have this extra one thousand dollars and just give it to somebody else who does not have money, just seeing the impact that it has on this person, I believe, is a way to be happy. In the past, as an organization, we gave our donors the opportunity to actually meet our recipients — whether in person or online — to see what the impact of their money was in those communities. And it was a very enriching experience. So talking to the recipients, the recipients showing them what they'd used their money for, why they had made the decisions that they had made, I think that was absolutely amazing. And it's funny; my parents always say there is a limit to the things that you can buy with money. Even if you have ten houses, you can only sleep in one house at a time. Even if you had four cars, you can only drive one car at a time. So when you have excess, I think a good thing to do is just think about, "How can I bless somebody else who is not as fortunate in life as I am, who is most likely going to have a huge impact on their lives from this seemingly small amount of money that I can give them?"

SPENCER: When I first heard about GiveDirectly many years ago, I had this reaction like, "Well, isn't this the most obvious thing to do?" in a sense. Why isn't this the default? And then, if this is the default, then if you're trying to do some other form of charity, you have to say, "Well, it's better than just giving people money." But my understanding is that, actually, it was kind of strange when you first launched this. It wasn't the way people usually did things. I'm curious about the initial reaction you got early on in the days of GiveDirectly. I'm not sure if you were there at the time, but what was the reaction of the broader nonprofit community?

MIRIAM: A very funny question. And I think there are two schools of people. There are those people who are going to hear about this concept of unconditional cash transfers, and they'll be like, "Oh my gosh, this is common sense. This is the way we should be doing it." And then there's another school that says, "Absolutely no way this thing works." It's almost like marmite. The British say you either hate marmite or you love it. There's no in-between. When people directly started doing cash transfers, I wasn't with the organization at the time, but I have read and I have watched some of the conversations. I remember when one of our founders, Michael Faye, was being interviewed on a TV program, the question someone asked was, "Are you smoking crack? How do you even think you can give people in poverty cash and think it's going to do anything for them?" So I think it takes looking at, one, the evidence. My role in the organization is the research director. And my coming into the cash space was also driven by the evidence. I was like, "I need to see what it can do." The evidence is obvious. And interestingly, cash is the most studied aid intervention in the world right now. And no matter where it is in the world, the evidence just keeps repeating itself. This thing absolutely works. But the second — which I think is the most important and the most beautiful — is meeting people who have been beneficiaries of a cash transfer and asking them how it has impacted their lives. I think for me, that is the strongest evidence that is possible.

SPENCER: Do you worry about biases there where, okay, you're giving someone money; of course, they're going to say something nice. They're not going to say, "Oh yeah, that was pointless. That didn't help me."

MIRIAM: Yes, we worry about biases, but the thing is that we actually go to their communities. We go to the communities and see the impact in those communities. We see how lives have changed. Recently, one of our colleagues in Malawi was showing us a satellite shot of a before and after of a particular village and the changes, I mean, you don't need anyone to tell you that these are the changes that have happened. I think it was two years ago when we were presenting work that we had done with a set of refugees in Uganda. We had the Minister of Disaster Preparedness in the room, and had all the leaders of that community present in the room as well. And when he heard the stories and heard about the things that had happened in the community, he just stood up and said, "You know what, I think we've been wasting our time giving people aid directly. We need to be doing cash transfers." And since then, the government of Uganda is really in conversations with us about doing cash transfers, and they've actually supported us; they've supported us in implementing our programs across the country. So the evidence is in seeing what it can do, not just hearing what it can do.

SPENCER: Let's talk about the evidence because, as I understand it, there have been a whole bunch of randomized control trials about giving cash directly, including some on your programs. My first question there is, how do you actually measure benefits? What are the outcome measures?

MIRIAM: The outcome measures in a research project — a randomized control trial, for instance — depends on what you are looking for. It depends on why the project was set up in the first place. For instance, if you are setting up a project that is focused on child outcomes, then the outcomes you are going to measure are going to be related to the child outcomes. It might be mortality, it might be nutrition. But on average, all our programs measure a number of things. One, they measure the direct economic benefits. Have people purchased assets? It might be assets for business, or it might be assets in the households, or could be livestock. And we're measuring things related to food: are people now more food secure? Are they not missing meals? Are they having a diverse diet? Are their children doing well? Are children admitted to school, and are they staying in school and not just enrolling and dropping out of school? We are looking at health outcomes, for instance, we're looking at people's mental well-being. How has your mental health changed since you received the cash transfers? We're looking at things like uptake of health services within the community. So it's multiple things, and the great thing about cash transfers, once again, is that cash transfers are able to impact all these different areas. The same cash transfer that you've given a household is going to impact education, going to impact food, it's going to impact health, it's going to impact multiple things at the same time.

SPENCER: If you think about the different outcomes that have been studied, which are the ones that you're most confident cash transfers have a big positive impact on?

MIRIAM: The first one is meeting people's basic needs. It is so obvious that, when people receive cash, they're able to feed better, their children are able to go to school, they're able to access healthcare. Those are the most critical, the strongest outcomes that we have seen. And then in programs where we are giving large amounts of transfers, which we call the lump sums — giving a large amount of money at the same time unconditionally to people — we've seen strong evidence that people are investing it in businesses that are going to bring money back to them, but also back to their communities. Those are two that really stand out all the time.

SPENCER: Do you have measures that look at the total well-being of the recipients or life satisfaction of the recipients?

MIRIAM: Yes, we look at that as well in a number of the randomized control trials that we do, and we used standardized and validated instruments that are used for measuring that. We do that because we want to make sure that we are not measuring outcomes biased to what we are looking for. So yes, we look at cultural well-being. We look at psychological well-being, just a sense of what happens to the person as a whole when they get cash transfers.

SPENCER: And what are the findings there?

MIRIAM: The findings so far in Africa have shown that, one, it really improves people's psychological well-being. And if you think about it, it makes sense; if you don't have money to feed yourself, to feed your children, you don't have money to have a proper roof over your head, there's no way you're going to be happy. This money comes in and helps people suddenly achieve these things that they've been hoping to achieve, and it is therefore not surprising that their psychological well-being is improved. And also you see things like people suddenly, for the first time, are able to buy a mattress and sleep on a mattress. For the first time, they're able to purchase a plastic chair for their house. For the first time, they don't have to walk kilometers to fetch water. They're able to trap rain water for their households, or they're able to bring piped water to their house. They're able to bring electricity to their house. The small things in life that we take for granted — even building a latrine, we've seen many communities suddenly are building latrines for themselves — so these small things that we take for granted in life — the hygiene factors — suddenly people are able to achieve them, and it is therefore not surprising that their psychological well-being is improved.

[promo]

SPENCER: How long-lasting are the benefits? If you give someone a lump sum and then you follow them for years after that, what do you see? Does the effect fade out? Does the effect maintain?

MIRIAM: I'll start by saying that the biggest gap in the cash transfer evidence is studies that look at the long-term effects. However, when you look at it in the grand scheme of research that has been done on aid, you find that cash transfers are the ones that have the largest number of long-term effects studied. The next one is deworming, which I think has about two or three studies that have looked at impacts up to five years. But coming back to your question, there was a study that was done in Uganda some years ago on cash transfers. It wasn't a GiveDirectly program. Young people were given a lump sum of unconditional cash transfers. Twelve years later in the middle of the COVID pandemic, another survey was conducted, and what was found was the people that had received cash transfers 12 years earlier still had a higher income compared to those who had not received cash transfers. And this was happening in the setting of a huge economic shock that affected the whole country and the whole globe per se. So that is an example of the long-term impacts that are directly seen. But also, when you look at it — people investing in sending their children to school — you might not be able to measure the long-term impacts now, but the impact of someone going to school and staying in school longer, first of all, for girls, for instance, it increases the age of their first sexual debut, increases the chances that they will not have children as teenagers. That, of course, is an impact that should be measured. And then also, when you look at studies, for instance, from the US, where cash transfers have been happening for a long time, it was found that children who were in households that received cash transfers when they were children, as adults, they had, on average, spent more time in school, had better jobs, and were earning better than their peers who were in households that did not receive cash transfers. When you think about long-term impacts, most times people are thinking in terms of things like immediate income, but we always tell people to remember that some of the investments that are made now will yield further out in the future. So it's important to always remember that angle as well.

SPENCER: And what do you see when you look at health outcomes?

MIRIAM: Well, you know what is interesting, Spencer? My background is in medicine. I'm a medical doctor; I was doing medical practice and research in medicine for a long time. The reason I moved to GiveDirectly was because of the health outcomes that we've seen with cash transfers. What we saw as health practitioners was people in poverty tend to have the worst health outcomes because, one, they're not able to come for their health care in time. They cannot afford the transportation. They're not able to pay for their investigations, they're not able to pay for their medicines and, therefore, their outcomes are worse. But the evidence of cash transfers has shown that, when people receive cash transfers, they're more likely to take up medical help. Pregnant women are more likely to go to hospital to have their babies. Their children are better fed and, therefore, diseases and death due to malnutrition is minimized. People are able to access health care earlier. We've also seen behavioral changes that affect health care. For instance, it's been shown that girls that are receiving cash transfers are less likely to have risky sexual behaviors and therefore less likely to get HIV. We did a program in Malawi where people with HIV, with AIDS, and people with cancer were given cash transfers, and what we saw was that, when people received these cash transfers, first of all, they were able to meet their basic needs, so they were able to eat better. But then they were also more likely to come to the health facility to get their treatments, and at the end of the day, the health outcomes were better and there was less mortality among that group of people. So for me, the health outcomes that have been demonstrated with cash transfers are really the reason that I actually joined GiveDirectly.

SPENCER: You mentioned you came from the medical field. Could you tell a bit more about your story and your journey into this?

MIRIAM: Happily. Like I said, my background is in medicine. I'm a trained medical doctor. For the last several years, I was working with HIV and specifically cancers that are related to HIV — Kaposi sarcoma and cervical cancer — and then also doing a lot of research on these two cancers. I was trained in Uganda, worked in Uganda, and especially among people that are living in poverty and are presenting with those illnesses. That is how I started off in my career. And three years ago, after coming across the concept of cash transfers, seeing the impact that they have on people's lives, but especially on their health and health outcomes, I thought it would be interesting to move and do something different, and I chose to work with GiveDirectly.

SPENCER: One thing I wonder about is, when you go into these communities, are people confused at all why you're offering to give them money, or even suspicious of like, "Well, what's in it for you?"

MIRIAM: In the very beginning, in some of our earlier programs, we had that. We went to some communities and people were afraid of what they called free money. They're like, "There's no such thing as a free lunch. What are your people benefiting from this? Why are you giving us all this money and not asking us for anything?" But what we have done over time is we've really honed the skills of our community teams, the field teams that go out to the communities. We have the field workers within the programs that explain these programs to the communities. But then we also have a safeguarding team and an internal audit team that is present in the communities to help explain to people what these programs are. And also, when we go to a community, we don't start by going house to house. We call a community meeting. The entire community comes for this meeting. We introduce ourselves to them. We tell them about the program that we've brought, and then we ask them to ask us any questions, and we are open to responding to them. In addition to that, we have toll-free call centers in all our countries that have people that speak the local languages, and we tell them they can call us at any time if they have any questions. But also we keep calling people up once any transfers are sent out to them, keeping that communication open.

SPENCER: What kind of questions do they ask during these community meetings?

MIRIAM: Some of the questions they ask is, "Are we allowed to use this money for anything that we want to use it for?" I think it's shocking for people when someone you don't know comes to you, they're going to give you a thousand dollars — we usually give a thousand dollars per household — and they're telling you, "Use it for what you see best for your family and for yourself." So people ask, "Are you sure that we can use this money for what we want to use it for?" That is a very common question. The other kind of questions are usually related to how to access the money because, like I said, we don't give people cash, physical cash. We send it through the mobile money platforms. In many parts of Africa, the mobile internet providers now have what they call mobile money platforms. They're essentially banks in your cell phone. And for people who have never heard of this or don't know how to use it, we actually train them how to use it. And some people who have never had a phone before, we offer them a phone — a free phone — whose cost is deducted from their transfers, and we teach them how to use it. So we get a lot of questions around, "How do I use the mobile money banking? How do I make sure that I'm not cheated?" and that kind of question.

SPENCER: How do they charge these phones? Because you said that a lot of these communities don't have electricity.

MIRIAM: Some people buy car batteries for their homes. So they're going to use those car batteries for lighting their houses, but also for charging their phones. There are people in the communities who have started a mobile cell phone charging business, so they go from community to community and charge people's phones for them. And then other people go to the nearest township and charge their phones there. I think what is interesting is we've seen people get connected to electricity. They might be outside the grid, but they're bringing in solar electricity, or they're buying car batteries to light up their houses, but also to use for things like charging their phones.

SPENCER: You mentioned that people have a choice to opt out. Do you have many people opt out of receiving the money?

MIRIAM: No, not at all. In the very early days, there was one particular community in Western Kenya where there was a huge opt-out; about 45% of the community said no. And of course, we as an organization made sure we went back to the community to learn what it was that had caused this refusal. What we found that eventually has affected the way we do our programming in all the countries was that we went out to these communities during the time of the campaigns for the national presidential elections, and it happened that the place that we had gone to was an opposition stronghold. And so there was a lot of propaganda saying, "These people are coming from America. They are bringing you money that is Illuminati money. Your children are going to die if you receive this money." And so there was all that and so many people in the community, because they were hearing about the concept of cash transfers for the first time, and were afraid of these potential bad luck things that would happen to them if they said yes to the money, said no. Since that, we've learned how to message our programs to the communities. But in addition to that, when it is a tense time in any country, we stop any new programs because we said we don't want to be part of causing tension in any kind of community. So any new programs during the election season in any country is paused until the election seasons are done.

SPENCER: I remember you had these very interesting interviews on your website with people who received the money, asking them what they used the money for, what they thought of getting this money. I read a number of those, and they were fascinating. And it was really interesting to see people use them for all different creative purposes and express a lot of gratitude. There were also some interviews on there that stood out because they were quite different. For example, people saying that they were concerned that this money might be linked to the devil, or they were bringing certain religious interpretations to the money being given to them. Is that a common thing that happens, or is that just a fluke that is just every once in a while?

MIRIAM: That is a very rare thing, and it mainly happened in that season that I was telling you about, that period very early, where there was that widespread belief that this is money from the devil. People say the Illuminati; they believe there is a cult called the Illuminati that is directly from the devil. And so that is when it happened. But now it almost never happens and, in many communities, actually, the church leaders are talking to their communities and saying, "These people are bringing us money. It is an answered prayer. They're bringing us money to improve our lives as individuals, but to improve our communities as well. So as church leaders, we advise you to say yes to the money." So we've gotten more advocates at the community level who are advocating. But also, I believe, because we've now done work in these countries for a long time, and our organization is known, people trust the organization. People are more likely to say yes to the transfers, and just know that we are coming from a place with no hidden agenda. We are just trying to accelerate the end of poverty.

SPENCER: How exactly do you explain that to them? Do you basically talk about your mission of trying to end poverty? How do you explain why they've been chosen to receive this money?

MIRIAM: On the whole, one, we acknowledge our donors. We let the communities know that this is not our money. This is money from donors who may be individuals or might be organizations whose mission is to try and help people that are living in poverty to get out of poverty, and GiveDirectly is simply a conduit that is bringing this money to the communities. We are giving them this money unconditionally because we know that they know what is best for them, and we are okay with them using the money however they want to use it. But we also let them know that, because of the funding constraints, this is a one-time event. We are going to come to the community once, and we are giving cash transfers once to this community. "So please, as you use the money, remember that. Use it wisely." But also, we put the baton back in their hands and ask them, what are the kinds of things that you think you could use this kind of cash for in the community? In a sense, it's like very low-level, very light coaching that happens in the community. We put the question back to them, and we tell them, "If you have any questions, if you have any concerns, please reach out to us, and we are happy to support you." We also do that, like I said, at the community level, so that there's a lot of transparency. Everyone knows that this program is coming in. This is how much money is going to be received. This is when you should expect to receive the transfers. So there is that level of transparency that we have in the community. And then we explain to them that they were selected because these are communities that are living in poverty. We would have liked to give everyone, even in the surrounding communities. But unfortunately, because of the funding constraints, we're able to give just one community at a time.

SPENCER: And do they see themselves as living in poverty? That might be a dumb question because, obviously, from the point of view of someone (let's say) in the United States, of course, they're living in poverty, but I'm just wondering if they view themselves that way.

MIRIAM: An interesting question. And actually, we are right now doing a study to get what we are calling the recipient's perspective of poverty. We're doing a study in Malawi and in Rwanda to get their perceptions of poverty. How do they define poverty? We've gone to communities and asked people, "How do you define poverty? Who in your community do you think is living in poverty, and why? Do you think you're living in poverty? If yes, why? If no, why? We're just trying to get an understanding of what the perceptions of poverty is among people who are living in extreme poverty. Once we've analyzed those results, we could happily share them with you.

SPENCER: My final question for you: what would you like to leave people with who might be skeptical that giving cash directly is a good approach to ending poverty?

MIRIAM: I think all of us should remember that people are living in poverty not because they have chosen to live in poverty. The majority of people in poverty were actually born in poverty, and they have not had the opportunity to try and get out of poverty. There is someone who said birth is the first lottery, and it just happens that they were born in that setting. I believe that all of us who have the ability to contribute to accelerating the end of poverty should do the part that we can. It doesn't take much. If all of us gave even 0.1% of our income, it would make a big impact on the lives of people living in poverty. And a number of these people living in poverty are actually able to, if capacitated, graduate themselves out of poverty. And so my call to everyone is just to remember that people don't choose to live in poverty. People want to get out of poverty. And if we have the ability to help, cash transfers have been shown, using the evidence, as a tool that actually can accelerate the end of poverty. And so if we can contribute to this cause, I invite people to contribute, not just to GiveDirectly, but to any organization that is able to reach their money to the people that need it.

SPENCER: Miriam, thanks so much for coming on.

MIRIAM: You're welcome, Spencer. Thank you for asking the questions. It's been nice to just think about GiveDirectly in so much depth.

[outro]

JOSH: A listener asks: "What are your thoughts about the changing of gender roles over the last several decades?"

SPENCER: So I think insofar as people feel less pressure to do things they don't want to do, that's fantastic. If people feel pressured into having a certain role in society that really doesn't work well for them or works against their interests and goals and psychology, that seems like a big problem. And so a relaxing of that, where gender roles are more open, people can be more like the kind of person they want to be; engaging in behaviors that are more like the kind of behaviors they want to engage in. That seems like a really good thing. I think sometimes people feel like shifting gender roles can also create other problems. Like, for example, some women report that as they feel less pressure to be a homemaker, they feel more pressure to work a job outside the home. But for some women who maybe prefer to be a homemaker, maybe that creates a new pressure, right? That now they feel uncomfortable being a homemaker, right? So, you know, it's complicated. Like if — you know, it's not just a net benefit always; there can be ways that some groups are benefit and some are harmed as the gender roles change. But my view is that, overall, the more that people can pursue their most meaningful path in life, the better. And that means that the less external pressure to pursue paths that are not a good fit for them, the better.