No Strings Attached

Listen to this BBC documentary about cash grants in Namibia

Yesterday, I went on a mini-run which was the perfect amount of time to listen to a BBC documentary about a pilot program in Namibia that’s making no-strings-attached monthly cash grants to residents of Otjivero, a squatters camp. According to the documentary, “School enrollment has shot up, small businesses are springing up, and the nurse at the local clinic says malnutrition rates amongst the children have dropped.” While the BBC was very positive about the program, I’m becoming more aware of how often reporting about the poor can be condescending. For example, is it really so crazy that the first things a struggling family would spend money on include food, health, and education? Incidents of the grants being spent on things like satellite TVs seemed to be an exception to the norm and were met with criticism from the other grantees.

This next part occurred to me in a dream last night but the pilot scheme reminded me of one of our discussions about rent-controlled housing in my microeconomics course. The argument goes that keeping the rent for apartments lower than the market rate discourages the landlord from maintaining her building and can eventually lead to a housing shortage as the units become so run-down as to be uninhabitable. Housing vouchers, on the other hand, would allow the landlord to charge market rate for the unit and the difference between rent-controlled and the market price would be subsidized. The tenant pays the same price but the landlord is happy and the building is in better shape.

To me, the program in Namibia seems like a cost-effective, low-bureaucracy way to provide vouchers for nutrition, health, education, housing, and small-businesses. The grant may be no-strings-attached but the impact of the extra money in circulation benefits the health center, other businesses whose goods and services are now in demand, and the citizens in general. Instead of an organization or the government trying to step in and over-regulate or micro-manage, the community members are trusted to make their own financial decisions and the quality of the services provided to them isn’t sacrificed.

Tags: Aid, BBC, Business, Changemakers, Development, Economics, Education, Health, Housing, Microeconomics, Namibia