These are some of the views and reports relevant to our readers that caught our attention this week.
Worth Every Cent
In a Foreign Affairs article last year, we wrote what we hoped would be a provocative argument: “Cash grants to the poor are as good as or better than many traditional forms of aid when it comes to reducing poverty.” Cash grants are cheaper to administer and effective at giving recipients what they want, rather than what experts think they need. That argument seems less radical by the day. Experimental impact evaluations continue to show strong results for cash grants large or small. In August, David McKenzie of the World Bank reported results from a study of grants of $50,000 on average to entrepreneurs in Nigeria that showed large positive impacts on business creation, survival, profits, sales, and employment, including an increase of more than 20 percent in the likelihood of a firm having more than ten employees.
No, Deaton’s Nobel prize win isn’t a victory for aid sceptics
A lot of fuss has been made this week about the latest winner of the Nobel prize in economics, British-born economist Angus Deaton, and his apparent aversion to foreign aid. Predictably, much of the press has taken his victory as a vindication of their suspicions on aid. It’s worth getting a few things straight though. Deaton did not win the Nobel prize for his criticism of aid. He was awarded the prize for his analysis of inequality and creation of better tools with which to analyse living standards amongst the poorest people in the world. Deaton is, in fact, more of a critic than an opponent of aid. In the same way that a film critic doesn’t hate all films (although it sometimes seems they do), Deaton doesn’t hate all aid.