My favorite example of this thinking gone wrong in the Economist article is where it highlights a woman bailing her husband out of prison as a poor use of the funds. It's pretty easy to imagine that getting one of the household breadwinners (he was interviewed at his place of work) out of jail is an increase in productivity.
What's more, we have lots of evidence (from Tanzania, from Burkina Faso, from Peru, etc.) that people - on average - DON'T spend the money on booze and the like. So even if we don't respect the question (i.e., why is it our business what they spend the money on?), we already have the answer.