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Here’s a thought experiment: You want to spend a reasonably large sum of money providing assistance to a group of people with limited means. There’s a lot of ways you might do that with a lot of strings and safeguards involved, but what about just giving them money — “get cash directly into the hands of the poor in the cheapest, most efficient way possible.”

Economist Tavneet Suri has done more than just think about that; her fieldwork includes handing out money across villages in two rural areas in Kenya to see what happens. Her experiments include giving out a lump sum of cash and also spreading out that same amount over time. The results she details for host David Edmonds in this Social Science Bites podcast are, to be frank, heartening, although the mechanisms of disbursement definitely affect the outcomes.

Despite the good news, the idea of a universal basic income is by no means a settled remedy for helping the poor. For one thing, Suri says, “it’s super, super expensive. It’s really expensive. And so, the question is, “Is that expense worth it?” And to understand that I think we need a few more years of understanding the benefits, understanding what people do with the incomes, understanding whether this can really kickstart these households out of poverty.”

And perhaps the biggest question is whether the results of fieldwork in Kenya is generalizable. “I would love to do a study that replicates this in the West,” she says. “The one thing about the West that I think is worth saying that’s different is you wouldn’t add it on top of existing programs. The idea is you would substitute existing programs with this. And that to me is the question: if you substituted it, what would happen?”

Suri is the Louis E. Seley Professor of Applied Economics and at the Massachusetts Institute of Technology’s Sloan School of Management. She is an editor at the Review of Economics and Statistics; co-chair of the Agricultural Technology Adoption Initiative at the Abdul Latif Jameel Poverty Action Lab, known as J-PAL, at MIT; co-chair of the Digital Identification and Finance Initiative at J-PAL Africa; a member of the executive committee at J-PAL; and a faculty research fellow at the National Bureau of Economic Research.

To download an MP3 of this podcast, right-click this link and save. The transcript of the conversation appears below.

David Edmonds: How about we give everyone a guaranteed minimum income, no strings attached? It’s a proposal that’s been around for a long time, but it’s always had its detractors. Would it really help lift people out of poverty? Isn’t there a danger? Some people would just fritter the money away. Paul Niehaus, Abhijit Banerjee, Michael Faye, Alan Krueger and today’s interviewee, Tavneet Suri, have cooperated in a research project to test this involving a unique experiment in East Africa. Tavneet Suri, welcome to Social Science Bites.

Tavneet Suri: Thanks so much for having me on, David, it’s a pleasure to be here.

Edmonds: We’re going to discuss aid and the developing world today, and in particular, a rather extraordinary experiment. So can you start off by telling us a bit about GiveDirectly, the charity you’ve been researching? Who are they? And what do they do?

Suri: So GiveDirectly is a charity that gives unconditional cash to the poorest households in the world. And they do this in probably about 14 different countries close to over a million, I think, recipients reached globally, probably more, maybe one and a half, and the aim is to try and get cash directly into the hands of the poor in the cheapest, most efficient way possible. Put no real conditions around it and just be able to do a bit of this support to the poorest.

Edmonds: And the money comes from where – from individuals from foundations, where did they get their money from?

Suri: I think it’s all over. A lot of individuals, a lot of foundations, all sorts of stuff.

Edmonds: How do they transfer the money from the wealthy West to some of the poorest parts of the world?

Suri: Yes, that’s a great question. I’m working on their Africa programs and there, it’s all digitally done through something we call mobile money. You can deliver it directly to people’s phones onto a digital wallet they have on their phones called mobile money.

Edmonds: So, tell us about the project that you yourself researched.

Suri: So, we’ve been working with GiveDirectly for a while. And the aim of what we’re doing is trying to understand whether a universal basic income can be a pathway out of poverty for people. I don’t know if you’ve heard of this concept of a universal basic income, but the idea is you would give a very basic income that covers basic needs to most people and an income that comes in a stream of payments, right, like once a month as you would get your salary or income. We work with GiveDirectly to build a large study around universal basic income.

Edmonds: You identified a particular village in Kenya. Is that correct?

Suri: Not a particular village. We have two sub-counties we’re working in, in Kenya, in two different parts of the country. It’s in poorer counties in the country. And in those we identified about close to 300, 295 villages, to be part of the experiment. So it’s not one village, it’s several hundred villages.

Edmonds: Have you been to some of these villages in Kenya? And can you describe them to me?

Suri: Yeah, absolutely. I’m actually Kenyan, by the way. So I was born and raised there, which is why I do research there. But yes, I’ve been to them several times. In fact, I was just there, I was there in February. Yeah. I mean, they’re not rich people, right? This is rural Kenya. They’re pretty poor. They’re mostly growing and eating maize. That’s the main staple of the whole country. A lot of them might not eat much meat a year, maybe at Christmas.

Edmonds: They’re living in huts? They’re living in shacks? What are their living conditions like?

Suri: So not really huts mostly, think of mixing a bunch of stuff to make walls, it has some concrete, but it’s not concrete walls. It’s like, you know, some mud, wood, some concrete, hold it together, there’s often a metal roof on top, a metal sheet roof. Sometimes you’ll get some houses with tile depending on who’s rich and who’s poor. So, there’s a distribution, of course, within the village. You know, a bit of furniture, of course, furniture is important. People like having a room they entertain in; they might cook mostly outside.

Edmonds: So let’s get back to the experiment. How much were these villages given?

Suri: Yeah, so let me tell you a bit more about the experiment before I do that. We kind of decided we not only wanted to study this idea of a universal basic income, but we wanted to also think about the universal basic income piece we’re studying that particular set of villages are getting a basic income, I’ll tell you amounts in a second, but for 12 years. So it’s the equivalent in PPP dollars, which is sort of accounts for purchasing power. So purchasing power parity dollars, it’s about $1.88 per adult per day, OK, and we committed to give it to them for 12 years, which is quite a long time.

So we were thinking, you know, universal across people and universal somewhat across time, but not quite universal across time because 12 years is not forever, but it’s still a large chunk of time and we want to go commit to a long experiment. This ends up being quite expensive as you can imagine. If I had to scale this up across the country, it’s going to cost a ton. And so we said, “Well, what’s the right benchmark? The right benchmark is not nothing.” The right benchmark is maybe cheaper alternatives. And so we thought we would see how much better the 12-year does relative to a two-year. So imagine getting the same amount per day, everybody gets it in the village, but just for two years’ time bound. A lot of the World Bank’s cash transfer programs kind of have that flavor – they’re short-term kind of two year’s time-bound approximately, and then they go on to move to another poor community and do it there.

The other comparison we did was we can do a comparison to the two-year that’s a monthly payment, we could also do a comparison where we take the two-year amount and give it to you up