On direct cash transfers: a look at US domestic politics of aid-giving

This is a guest post by my colleague at Stanford, Lauren Prather, who works on the determinants of individual attitudes towards inequality, poverty, and redistribution, in both domestic and international contexts.

Does the American public oppose giving cash to poor people in developing countries? Giving cash instead of in-kind aid like food is a hotly debated subject in development circles and has recently received increased attention from the media. The apparent success of GiveDirectly, a charity that gives unconditional cash transfers to poor people in Kenya, has added fresh fodder to the discussion. Even the Obama administration entered the fray earlier this year by proposing changes to the way U.S. food aid is distributed.

Traditionally, much of the food aid provided by the U.S. government is procured in the U.S. and shipped abroad. The reforms would relax these requirements and include more flexible approaches to food aid provision including possibly giving cash or vouchers to people in poor countries to help them buy food locally.

Proponents of cash transfers argue that the poor know their needs best and therefore giving cash is a more efficient way of providing aid. With food aid in particular, providing aid in kind can be more expensive and can damage local economies by driving out local farmers. Giving people cash on the other hand can allow them to buy food locally, which can be more cost-effective for donors and can actually support local agriculture.

What are the political constraints to reforming aid to include cash transfers to the poor? While most of the opposition to the food aid reforms has come from the farm lobby, public opinion may be another constraint. Indeed, research on American political attitudes suggests that Americans oppose giving cash to the poor, at least to poor Americans. But do Americans exhibit the same level of opposition to cash transfers targeting the foreign poor?

To shed light on this question, I used a randomized experiment embedded in a survey fielded in July of 2013 to a representative sample of 1,000 Americans. In the survey, I gave individuals a fictional news article that described a government hunger relief program. The news article contained two experimental treatments. In the first treatment, I randomly told half of the survey respondents that the program gave the poor cash, while the other half read that the poor were given food. The second treatment was randomized independently of the first treatment: half the respondents were told that the program helped Americans and the other half read that it helped people living in other countries. After reading the article, survey respondents were asked whether or not they thought the government should cut the program. 

ImageThe results were surprising. Among those who read about the foreign hunger relief program, the cash treatment had little effect: 45% of respondents thought officials should not cut the program giving food, while a similar 43% thought officials should not cut the cash program. For those that read about the domestic program, however, the results were more expected: 72% of respondents wanted to keep the food program, whereas only 58% wanted to keep the program that gave the poor cash.

Two important conclusions can be drawn from these results. First, policymakers shouldn’t necessarily look to how the public thinks about domestic welfare programs to predict how they would respond to similar foreign aid programs. Instead, it appears that support for foreign aid remains relatively low regardless of whether the aid is distributed in kind or in cash.

Second, advocates of giving cash to the poor in developing countries need not fear the public; at least not any more than is usual for foreign aid. In the eyes of the public, the real issue seems to be whether to give any foreign aid at all.