Thanks for the great post! and for pointing to the elephant in the room in some sense - the role of governments in taxing and redistributing wealth.
My reading of the arguments made by the 'give cash directly' proponents has mainly been in terms of its focus on development agencies (less so on governments). Given that we waste so much of the resources in delivering aid poorly or by just delivering the wrong aid, it may be better to just give cash directly to the poor and see what they do with it. The evidence on this count is interesting, and we can argue about the outcomes we expect, as you do in your post. Even so, the focus seems to be on what is convenient for ‘us’, not necessarily what is good for ‘them’.
The other aspect of this debate is that of administrative capacity. Even delivering cash directly to people when attempted by governments call upon a certain degree of administrative capacity. For many reasons that weaken the implementation chain, the transfers may not be well targeted, may not be received in full, and so on. In those cases to say 'give cash directly' may not be the solution at all.
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