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Show Them the Money

Why Giving Cash Helps Alleviate Poverty

Girls walk in a slum on the outskirts of Islamabad, February 4, 2014. Zohra Bensemra / Courtesy Reuters

Every year, wealthy countries spend billions of dollars to help the world’s poor, paying for cows, goats, seeds, beans, textbooks, business training, microloans, and much more. Such aid is designed to give poor people things they can’t afford or the tools and skills to earn more. Much of this aid undoubtedly works. But even when assistance programs accomplish things, they often do so in a tremendously expensive and inefficient way. Part of this is due to overhead, but overhead costs get far more attention than they deserve. More worrisome is the actual price of procuring and giving away goats, textbooks, sacks of beans, and the like.

Most development agencies either fail to track their costs precisely or keep their accounting books confidential, but a number of candid organizations have opened themselves up to scrutiny. Their experiences suggest that delivering stuff to the poor is a lot more expensive

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