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Rory Stewart led the UK’s international development ministry for two years and later became the Africa secretary. But after leaving government he became president of the cash transfer nonprofit GiveDirectly, which changed his perspective on aid.
Now Stewart wants the aid community to overhaul its collective approach. Rather than design complex programs to monitor, control, and train people in areas like agriculture, and health, he has a simpler solution: cash.
“In many, many cases, the most effective way of helping people in extreme poverty is simply to give them unconditional cash in a single lump sum transfer and get out the way,” said Stewart in an interview breaking down his recent TEDtalk on the same topic. His argument is that we can rely on people to spend the money far more efficiently and intelligently than well-meaning aid agencies might have planned.
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The cash approach is not unique or unheard of, others have taken this approach particularly in crisis situations such as after a natural disaster or during conflict. But Stewart says evidence has shown that giving a more substantial one-time payment of around $1,000 can have a more transformative impact than smaller monthly amounts. “You can see people really beginning to put that money to work, turn their lives around, be it investing in a business or fixing their house, they’ll make capital decisions with it.”
Stewart points to examples of projects in Liberia, Rwanda, and Uganda where GiveDirectly, where he is still a senior advisor, has taken this approach. Mobile money has been key to scaling up this approach because using phone networks makes it “much easier logistically” to reach those most in need.