- Charity GiveDirectly gave $1,000 to poor households across Siaya County, Kenya.
- The money had a ripple effect on the region’s economy, as every $1 of cash delivered generated $2.60 in additional spending.
- While the money amplified existing inequalities, it shows the potential of universal basic income (UBI) programs in developed and developing economies.
Sitting on the banks of Lake Victoria, Kenya’s Siaya County is rich in natural beauty. But thousands of people here live below the government’s rural poverty line of less than $15 a month.
The majority are employed in agriculture, and many live in thatched-roof homes – a simple indicator of poverty in the region.
But what would happen if these people were given a life-changing amount of money?
One team of researchers decided to find out. Partnering with the charity GiveDirectly, they set out to discover how cash transfers affect local economies – not just the recipients of the money, but the wider community, too.
The ripple effect
The charity gave a total of $10 million to 328 villages. Each of 10,500 households that qualified – by having a thatched-roof home – received $1,000,