Lhe fight against poverty is undergoing a small revolution, embodied by the success of GiveDirectly, an American NGO created only eleven years ago. Its principle is simple: it identifies the poorest villages or households and pays them money directly, often by mobile transfer. In the midst of the Covid-19 pandemic, tens of thousands of inhabitants of the Democratic Republic of Congo (DRC) were able to apply for financial aid, by simply sending an SMS and answering seven questions. The selected beneficiaries received a monthly allowance of 25 dollars (about 24 euros) for six months directly into the bank account associated with their telephone number.
Over the past ten years, GiveDirectly has distributed over $500 million, including in a wealthy country like the United States, and the number of beneficiaries has grown from around 39,000 in 2019 to over 486,000 in 2021 The humanitarian start-up uses algorithms and satellite images to detect, from the observation of building materials, for example, the poorest neighborhoods.
Gradually, development aid is also converting to money transfers. In mid-October, the American agency Usaid and GiveDirectly announced that they would pay 4 million dollars directly to Moroccan agricultural cooperatives. “The biggest increase in money transfers in history” took place during the Covid-19 pandemic, notes Ugo Gentilini, economist at the World Bank. About 1.3 billion people on the planet have benefited from it, even if on average this aid lasted only four and a half months. These transfers are now facilitated by technology, in particular mobile transfers, with the risk, however, that the poorest, oldest or most illiterate people are excluded.
Reduction of corruption risks
Distributions of coupons or cash now account for a fifth of humanitarian aid. The World Food Program, for example, distributes 1.2 billion dollars each year directly to the bank account of beneficiaries, which makes it possible to fight against hunger while supporting the local economy. This mechanism also costs less than delivering aid in the form of goods. And, if the money is transferred directly to the recipient’s account, the risk of corruption or misappropriation is greatly reduced.
Such a device, yet so simple, has long aroused mistrust because of the prejudice that the poor cannot spend what they are given or that they would become lazy… Preconceived ideas challenged by numerous studies Abdul Latif Jameel Poverty Action Lab (J PAL), housed in the prestigious American university of Massachusetts Institute of Technology (MIT, Cambridge). “It is precisely because [les pauvres] have so little that we see them taking the time to reflect before deciding: they must be talented economists just to survive”write the directors of J-PAL, Abhijit Banerjee and Esther Duflo, in their book Savings useful for difficult times (Threshold, 2020). In other words, when a man is hungry, perhaps it is better to give him fish than to teach him how to fish. With a full belly, he will choose the best prospect that presents itself to him, and which is not necessarily to fish. The two Nobel Prize winners in economics were the professors of the founders of GiveDirectly. The NGO continues to carry out experiments, as in Kenya, where it calculated in a district that a donation of 1 dollar increased on average the wealth produced by 2.40 dollars.
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