[MUSIC PLAYING]
[APPLAUSE]
JOE HUSTON: Yes.
So thank you, guys,
so much for having me.
In general, Google
was super early
in supporting GiveDirectly and
the Google community broadly
and in helping people out who
are extremely poor by sending
cash through our platform.
And so we've always felt really
close to the Google community.
And it's nice to be able to come
back and talk about what we're
up to, some of the
debates that are happening
within the development and other
sectors, and how cash, I think,
is moving those forward.
As Max said, I've worn a few
different hats at GiveDirectly.
When I first started
at GiveDirectly,
I was in Kenya on
the operations side,
managing our team, signing
people up to receive cash.
I spent a year and a half or so
there, about a year and a half
in Uganda, and just
recently switched back
over to the finance
side in New York.
And what GiveDirectly does
is pretty straight forward.
We send cash unconditionally
to people living mostly
in extreme poverty.
That cash is a grant.
It's not a loan.
People can spend it
however they want.
In the most typical model,
we will send about $1,000
in a couple of chunks over
the course of a few months.
And then people spend it
on whatever they want.
In total, we've raised
almost $150 million
to deliver as cash transfers.
And we've enrolled
over 80,000 households.
Because our operations are
fairly straightforward,
we're able to stay
remarkably lean.
And so, on average,
about 90% of what
we raise for cash transfers
gets delivered directly
to people's hands at
the end of the day.
And then as we're
doing all of this work,
we're constantly
running different types
of research studies.
And so when we first
got started in Kenya,
we ran a randomized
controlled trial
testing a bunch of different
things about cash transfers--
comparing large lump sum cash
transfers to recurring stream
transfers, testing whether or
not male recipients spend money
differently from
female recipients,
as well as the effect
of cash transfers
on a ton of different
outcome variables, earnings
and assets, consumption,
but also things
like stress and depression
and things like that.
Since then, we've done a number
of different research studies.
We can talk about things like
looking at the effects of cash
transfers on macro--
the macro aspects
of the economy--
behavioral aspects
of cash transfers,
how cash transfers
affect coffee farmers,
and how they invest in their
farms and things like that.
Operationally, the process looks
a lot like a sales and customer
service operations.
We'll go door to
door and collect data
on the people who
could potentially
receive cash transfers,
run a pretty simple logic
to decide who is
eligible, then go back
and collect a
little bit more data
and inform them
about the program.
We'll then send the money,
typically through Mobile Money.
And so that looks
like Venmo, but you're
able to cash out basically
anywhere around you.
And we can send
thousands of payments
with a touch on a laptop.
And then we have full
time call centers
in each of the
countries where we work.
And so after every
time we send payments,
we're able to call people
up and confirm that they've
received it, ask if they have
any feedback for GiveDirectly,
and understand if
they've had any problems.
Now that model of just
giving unconditional cash
is very different from how
we're taught through aphorisms
or parables about how we're
supposed to approach giving.
There's this idea that you're
supposed to teach a man to fish
or not give him a fish.
Or that you should give a
hand up but not a handout.
And I think behind that, there's
this idea that giving cash
can't be sustainable.
And there's also this idea
that we should distrust
the people we're trying to help
somehow, that giving them money
could be corrupting.
Or if it's not
corrupting, that we just
can't trust from the outset
that it could be spent well.
Behind that basic
debate, the stakes
are actually remarkably
high between how we
should approach helping people.
To give you a sense,
this is one way
of visualizing
what's up for debate.
The blue line is global
official development assistance.
It's one measure of
this total amount
that governments are
spending in foreign aid.
The line that's
going down over time
is the cost of closing
the poverty gap.
You can think of this
as taking everyone
who is below the
global poverty line
and visualizing how much in
cash it would take to get them
to the poverty line.
Now, there's a
lot of reasons why
that's a simplistic
picture of what's going on.
But the basic synthesis is that
we have incredible resources
available to help the
people we're trying to help,
to help the people
in extreme poverty.
And a lot of the problem
of aid and development
is an allocation
one-- that it's not
so much that we
need more resources,
but we need to
better allocate them.
And so this debate
about how best should we
help people is actually
extremely important.
So luckily, we
don't have to have
this debate in this arena
of dueling assertions.
It doesn't have to be this
theoretical or philosophical
debate about what
people are really like.
We can test it.
A development that's happened
over this last couple
of decades within
development economics
is moving a little
bit away from theory
towards actually putting things
into experimental evaluations.
And so the gold standard
approach to this
is what's called a
randomized control trial.
It's the same way that
we test medicines--
by randomly assigning people
to either receive or not
receive a treatment and then
using external evaluators
to test the differences in the
different outcome variables
between those two groups.
We've learned a lot
of different things
from that about different
interventions we use.
We've learned that
we're actually
pretty bad at training people
or teaching people to fish.
The effects of
microfinance and things
like that are
actually pretty mixed.
We've also learned that
the effects of cash
are remarkably consistent,
that the exact impacts can vary
a lot by the structure
of the cash transfers
or the people who are
receiving them or the context.
But you see a few
consistent themes.
First, people spend
it pretty well.
You see increases in
earnings and consumption,
decreases in food insecurity,
improvements in nutrition,
often increases an uptake on
things like health services
or actual improvements in health
in terms of fewer accidents
or better health.
You see decreases in stress.
To give you a sense of
the variety of responses
to cash or to security,
one study in Malawi
tested giving the
families of young women
a small recurring cash
payments-- so just a little bit
of security, not a
total game changer.
What they found is that those
women whose families received
got married later,
pregnant later,
and had lower rates of HIV
relative to the control group.
Because they had a little
bit more security in society.
On the other side
of the spectrum,
a study testing giving young
people about $400 all at once,
if they went back and
compared that group of people
to a control group, and
found that their earnings
were 40% higher.
That basic result was mirrored
in GiveDirectly study that
found that a year after
people received about $1,000,
their earnings were 30%
higher and their assets
were 58% higher.
The other things you
don't see are the things
people are often worried about.
There is this sense that
if you give people money,
they might drink it.
Or it will be corrupting,
and they'll stop working.
But all of the evidence
we have from what's
been 165 different studies of
cash transfers, which suggest
that that doesn't happen.
The studies have found that
this consumption of, quote,
"temptation goods"-- things
like alcohol or tobacco
or gambling-- either has stayed
the same for cash recipients
or has gone down.
And similarly, the work effort--
how much time people are
spending working--
has either stayed
the same or gone up
in the different
studies that have been
done in the developing world.
The other thing that's
happened more recently
over the last decade
is an explosion
in mobile money, which
has made delivering
cash transfers a lot easier.
And so today, there are 93
countries with mobile money
and over 400 million
current mobile money users.
That makes this job of getting
cash into people's hands pretty
easy.
And the mobile
money infrastructure
doesn't have to
be as robust as it
is in Kenya, which has the
best network in the world.
It can actually be
pretty lightweight.
A study we did in
Uganda tested the limits
to say, how good does the
payments infrastructure have
to be for mobile
payments to work?
And so we found just about
the most remote place
you could go to in Uganda--
a place very, very
North in the country,
just on the border
with South Sudan--
where people typically
would walk something
like four or five hours to
get to the nearest town,
which was also where the
nearest paved road would be.
We found that if you sent mobile
money to a place that actually
didn't have any mobile money
providers there already,
this market responded-- that the
market incentives for cashing
people out worked.
And agents came to the
village to cash people out.
And so this technology exists
to get cash into people's hands
really, really cheaply.
As a result of those,
there are two trends.
There's a ton of
different applications
where we can use cash
transfers to solve or address
a bunch of different
types of problems.
And so to give
you a sense, these
are some of the projects
GiveDirectly is working on
around the world.
And so the first one is the
thing we've done most often.
It's these large one time
cash grants of about $1,000.
And I think these
are best geared
if you want to give
people investment capital.
And so you see bigger
increases in earnings
that expect large increases in
assets and things like that.
You can also use cash transfers
to address humanitarian issues.
And so we just started
a project in Uganda,
which has taken in a lot
of different refugees
from surrounding countries.
The typical approach to
these types of crises
is to pay people who run
settlement camps per head
by this number of people
they're supporting.
And while that seems intuitive,
the incentives are all off.
Because the incentives
are to keep people alive,
but not support them to
move on with their lives.
And so the test
we're doing in Uganda
now is giving people about
$750 and letting them
to spend it however they want.
You can also use cash for things
like a universal basic income.
And so I'm sure we'll talk
about this more in Q and A.
But the basic idea here is
if you want to make sure
that everybody is living up to
a certain standard of living,
one way to kind of
mechanically insure
that is to give everyone a
cash transfer equal to the cost
of that standard of living.
And so GiveDirectly
just launched
to study in Kenya distributing
different types of cash
transfers to about
16,000 people,
with some people receiving
a universal basic income
for up to 12 years.
On the other side
of the spectrum,
you can use cash transfers for
things like disaster relief.
And so something
GiveDirectly did
this year is launch in
Texas and Puerto Rico
and hand people out debit
cards for about $1,500.
That's not a life
changing amount
of money in either
of those places.
But it does help
sort of fill the gaps
in terms of what people aren't
receiving from the existing
support network or the existing
NGOs doing disaster relief.
And it lets people buy
whatever is their top priority
within that price range.
There's a big
industry that exists
around things like fair
trade or CSR for companies
to try to give back to the
people they are working with.
And so one thing we're testing
with a sort of foundation
arm of a coffee company is
just giving cash transfers
in a coffee growing area.
And so we're working
in eastern Uganda.
Picked an area which is
growing a lot of coffee and
are giving people about
the same $1,000 cash grants
and seeing how it in
general changes their lives,
as well as how it
changes their coffee
growing practices, whether
they start doing longer term
practices and how they
approach the plants
and things like that.
And this last thing is a project
that I'm really excited about,
which is something we're
doing with USAID in Rwanda
and potentially other
countries, which is using cash
as a literal benchmark for
their existing programming.
And so we're running side by
side randomized controlled
trials in Rwanda, testing
for goals that they have.
And so in one case,
it's a nutrition program
that has specific nutrition
goals how we could structure
a cash transfer program
designed to meet those goals
and basically produce a report
card answering the question.
Is the programming
you're doing better
than just giving the people
you're trying to help the cash
and letting them spend it?
And so that provides a literal
benchmark for us to say,
are we allocating
money correctly?
And so something that's been
happening in this sector
as we've had this mountain
of evidence build up
and as the logistics
of delivering cash
has become a lot easier
is that the rhetoric
has changed dramatically.
It's less so that the
idea of giving cash
is seen as crazy or
nuts or corrupting.
And instead, you see things
like this from Ban-Ki Moon.
He said that cash
programming should
be the preferred and
default method of support.
A different sort of summary
of the evidence on cash
called it perhaps the
most thoroughly researched
intervention out there.
And so that's actually
extremely exciting,
except that the
funding hasn't changed.
If you look at the overall
portfolio of how we're
spending our money
to help people,
it's still spent mostly
not by the recipients
we're trying to help, and
instead by policymakers
and bureaucrats and donors
in places like New York
or D.C. or London.
And so less than 1% of US
aid funding is cash-based.
Less than 2% funding of UK
aid funding is cash-based.
And the same is true in the
humanitarian sectors as well.
And I'll pause to note
that the rest of the pie
is not the give
well top charities.
That's not the kind of most
evidence type interventions
out there.
There's a remarkable
inertia in the sector
that we're still
trying to fight.
And the consequence is
that because we're not
solving the allocation
problem at the front,
it gets solved on
the back end a lot.
And so you see things like
this from one refugee camp
where 70% of Syrian refugees
were selling portions
of food aid they were receiving
to get what they actually
wanted.
And so the markets
are still responding
to try to correct the allocation
but only further and further
down the chain after we've
shipped food from other places
into the country.
And so what can we do about it?
We have these really
effective tools.
We have this evidence.
As donors, how can we
approach this basic problem?
Well, part of this
stagnation in the sector
is that it doesn't
respond how like consumer
goods or, in general, a
market economy respond.
And so if you look at
a phone like a product,
we've had remarkable innovation.
We've gone from this rotary dial
landline phones to the iPhone X
or something like that.
And the reason is because
there are market incentives
to respond to the consumer.
Well, the problem with
the development sector
is that the donor is
the person who pays.
But the recipient is the
person who is affected.
And so you don't see the
same types of incentives
exist to have the same
type of innovation.
And so you often see persistence
in the same types of tools
that we use again and again.
And so somehow we have
to become better donors.
And so these are three questions
you can use to force that
and to force the
organizations you're
working with to be more and more
responsive to the people you
and they are trying to help.
The first one is
trying to understand
what the end-to-end cost
of the intervention is.
How much of your donation
actually ends up in value
provided to the recipient
at the end of the road?
Now, there's lots of problems
with overhead metrics
and things like that.
And this is not that.
A problem with the
sector is that it's
heavily intermediated.
And so one nonprofit
will take your donation
and give it to another
nonprofit after sort of skimming
a little bit off the top.
They'll skim a little bit
off the top for overhead
and give it to
another nonprofit.
And even if the reported
overhead is very low,
each of those nonprofits
only taking about 1%,
the systemic overhead
is extraordinarily high.
If you have a chain of
those nonprofits repeatedly
subgranting to each
other, the end value
that's reaching the recipient
is actually very, very low.
And that's a practice that you
see again and again and again
in the sector.
The next thing is
evidence backing.
Has there been an external
randomized controlled trial
of this sort of intervention the
organization is implementing?
How do we actually
know that it works?
And use the same
standard you would
want for a medicine
you would take
or a product that you
would bet your life on.
And lastly, there's
this benchmark question.
Is the funding you're
providing to the organization
and the program that
they're implementing
doing more good than the people
you're actually trying to help
could if you just
gave them the cash?
Now, there's plenty of
interventions that might meet
that standard-- very specialized
medical interventions,
for example, or cases where
there's a public good problem--
infrastructure, or
maybe rule of law.
There's a particularly good
giving opportunity there.
But a lot of the
things we're doing
are trying to outspend
the poor about things
that they know far more about.
And so I think a lot of
the spending we're doing
wouldn't meet this
sort of basic test.
I think the last
thing that's worth
pausing on before
we go to Q and A
and dig into a bunch
of other things
is why is it worth
giving at all.
And here I would
say the existence
of incredible opportunities
to have impact.
I think cash is one of those.
But there's lots of
other non-profits
that are actually
doing good work.
Provides a pretty
amazing opportunity
to do something
great with your life
that almost as a side product
of your day-to-day life
by donating a certain
small percent.
Your life can be basically the
same, except as a side product,
you can dramatically change
and better lives of people who
are living in extreme poverty.
And that's a cool opportunity to
do with your 80 years on earth.
And so I think despite the
dark look on the sector,
I think there is this incredible
opportunity out there provided
by good giving opportunities
that make giving worth doing.
And so with that, I'll
turn it over to questions
and looking forward
to conversation.
[APPLAUSE]
SPEAKER 1: I actually
want to start with just
a question about your own role.
So this is amazing work.
I mean, for example,
the Malawi thing,
I just learned about
that yesterday about HIV.
So you keep learning new things
about cash transfers, which
are amazing.
But I'm curious from
the financial angle,
what kind of unique problems--
I imagine there are some--
that GiveDirectly deals
with that you're exposed to?
JOE HUSTON: Yeah.
In a lot of ways,
it's focusing to just
be able to spend most of your
time on the cash pipeline.
And so on the
finance side, my job
is to manage that entire
pipeline from donor
to the first bank it hits in
the US to the foreign exchange
transaction to get to Kenyan
shillings or Rwandan francs,
the bank it sits there, and then
the getting to the mobile money
provider and to the
eventual recipient.
And so the problems
there are to first,
make sure that that pipeline
is as short as possible,
that money moves through the
system incredibly quickly.
And so problems we're
sort of working on
within that domain
are things like how
do we project donations
that we can keep field
operations running basically
just behind them so
that the lag is very small?
Second, how do we manage
that cash prudently,
make sure we're getting an
interest where we should
and things like that?
And then third,
making sure we're
managing fraud, on
the internal side
with staff and things
like that and externally
with mobile money providers,
with local government
and things like that.
And so the integrity
of the pipeline
is something I spend a
lot of time on as well.
SPEAKER 1: Cool.
[INAUDIBLE] I'm actually
going to set up the Dory.
Just one moment.
AUDIENCE: Yeah, I'll go.
Hey.
My question is about whether
an organization like yours
pays a different amount than a
giant multinational corporation
like Google does to
change currencies?
It seems like something that's
really important to the flow
of money in this organization.
And I wonder if
there's an opportunity
for multinational
corporations to help out
not just by matching
employees donations,
but maybe to assist
with currency exchange
in the currencies
that they're already
exchanging in gigantic
quantities on a very
frequent basis.
JOE HUSTON: Yeah,
it's interesting.
The history of what we
have paid has changed.
I think when we were
first getting started,
we were pretty naive.
And so we were paying about
a percent per transaction,
which would be extremely high
for developed world currencies.
It's a little bit what you'd
expect for the developing world
currencies we're trading in.
I think we've gotten
better over time
at competing different
banks against each other.
And so we have a US
bank that quotes a rate.
But we also competed against
certain different local banks.
And we've added different
local banks over time
to impart offer
competition there,
but also to offer credit risk
hedges basically while we're
holding the cash there.
And so the total
fees we're paying
have dropped a ton over time.
And so now we're only
like a hair above 0%
or something like that.
That said, my guess is
the Googles or something
like that are probably
being a step more clever.
And so my guess is the
same opportunities still
probably exist.
I don't know how the tool
would work, the piggybacking
off the transfers.
But I bet there is something
there in terms of, yeah,
trying to be more clever.
I think also as we've grown,
we've become a bigger player.
And in these markets,
it's certainly the day
we trade or something like that.
And so I think
that's helped in us
getting better rates versus us
getting first getting started.
AUDIENCE: Thank you.
SPEAKER 1: We can read from
the first Dory question.
So what are the best
reasons, in your view,
to be skeptical about basic
income projects or policies?
JOE HUSTON: Yeah, I think my
biggest one, especially as it
applies to the US
or other places
where basic income
feels politically far,
is that a UBI doesn't feel like
a particularly useful North
Star.
That there is this sort of sense
of a UBI as this Utopic policy.
And because of its
elegance or simplicity,
there's a very good sense of
what it should look like--
that it should be universal.
It should be basic, which you
could debate the exact number,
but it's supposed to
meet the basic needs.
And so I think almost because
it has this clear template
for what you should
do, in places where
that template would
be politically pretty
hard to implement soon,
it doesn't tell you
what the incremental policy
should be to get there.
And so in the US, things that
feel more tractable and maybe
then more exciting are
things like expand the ITC
or have a child grant
or something like that.
And I worry a little bit that
the UBI and UBI pilots that,
including the
directives that are
sort of testing
the Utopic version
or the template version,
aren't providing a lot of light
on how to get there
or on the pilots that
should happen in the
near-term on policies
that are more likely in the US.
I think for a lot
of countries, a UBI
could feel closer politically--
India might be one example--
for which the conversation
and the pilots focusing
on that template are
actually pretty useful.
But in the US, I worry a lot
about the distraction factor--
that we've cut away
the wonk class who
care about poverty in
the US and focus them
on a policy that feels far.
SPEAKER 1: Yeah.
And EITC is their earned
income tax credit.
It's a very large cash
transfer in the US.
Also note in the comments
of this question,
there was a lot of
discussion on inflation.
So there was a study
that was recently
pursued from the Mexican
cash transfer program.
I don't know if you
want to talk about that.
But it seemed to find that
there was not inflation.
JOE HUSTON: Yes.
SPEAKER 1: Or if
you're familiar.
JOE HUSTON: Yeah, yeah.
And so Mexico was in that chart
of the different cash transfer
programs.
They were one of the
leading innovators
both in implementing
a cash transfer
program in the developing world
and in actually testing it.
And so the US had different
types of cash support
before then.
But they were really forward
thinking as a government
and working with
academics to test
the effects of cash transfers.
And so they produced
some of the early results
on just how cash transfers
work on the individual level.
But then also a recent
analysis of those programs
found that you don't see
the kind of doomsday things
people are worried about
in terms of a basic income
or in general expanding cash
transfer programs in terms
of prices just going up
a ton to totally offset
the value of the cash.
That's something that we've seen
in a couple of other studies
done evaluating that question.
GiveDirectly's
first study looked
at a kind of village level
and didn't see any effect
on prices.
A thing we have in works
that we don't have results
out is a study specifically
designed to stress test that.
And so we used our
one time grants
and randomized the concentration
of GiveDirectly's enrollment
within a large region.
And so there were high
concentration areas
and very low
concentration areas.
And then as we delivered what
was massive amounts of cash
in the region,
researchers looked
at prices in local
markets as well as
quantity of goods supplied,
local taxes, and school fee
payments, these sorts of
different kind of macro
or community level effects.
And so those are results I think
we'll have out early next year
or so that I hope can contribute
to that debate as well.
I think on the theory of
it, a lot of the ways people
talk about inflation, the
Econ model is too simple.
That they're sort
of holding constant
how much can be supplied.
That a lot of times
either big companies
can respond to
increases in demand
by supplying more of the good.
Or oftentimes in the developing
world, something you see
is the cash given
increases the supply.
And so an example could
be you would be worried
that you gave cash to an area.
And the area in general
likes consuming fish.
And so the price
of fish will go up.
But the piece that
you're missing
is that often when
people receive the cash,
they buy boats or fishing nets
or coolers to be middlemen
between fishermen and markets.
And so actually this
quantity of supply of fish
goes up as much or more.
And so I think the model
people use to answer and think
about the inflation question
has to not keep supply
fixed when debating that part.
AUDIENCE: Hello?
Can I ask a question?
AUDIENCE: Yes.
OK, sorry.
I would like to learn a little
bit more about your UBI pilot
in Kenya, you said.
And I know we have already
talked about UBI a little bit,
but I guess there's a reason
behind GiveDirectly jumping
into basic income and
you providing the service
to 12,000 people, I think.
And I'm always
wondering how can you
get from those results you're
getting from the UBI, which
is only paid to a fraction
of people in the country,
then to a more universal aspect
where all people would receive
it?
And what are you
hoping to learn?
And do you have any
results as of far?
JOE HUSTON: Yes.
And so when GiveDirectly was
seeing the debate on UBI spike
up again over the last couple of
years, the thing we saw it was
was a debate about how a
particular type of cash
transfer works.
There is these questions
on the pro side
that it would enable
different types of risk taking
or entrepreneurship, help
people live their lives better.
On the con side,
people were worried
that people would stop
working or spend it badly
or things like that.
And those questions
are testable.
And so like other
people's launching pilots,
we saw this was very much
within our sweet spot
to implement a cash
transfer program
and then work with researchers
to test the results.
The basic structure
we used was to design
to test what's unique about a
UBI versus other cash transfer
programs.
And so in part to get at your--
a big piece of a UBI
is that it's universal.
And so we randomized
at the village level
with whole villages randomly
assigned to receive cash
or not.
And then we also
randomly assigned
some villages to receive cash
for 12 years and some villages
to receive cash for two.
Because a scaled
up version of a UBI
would be for your whole life.
But a lot of the pilots
that have been done
and that are coming
online are shorter term.
And so potential
research question
you might have is
can you extrapolate
to how the incentives would
actually be for people if they
had that longer term security?
Again, on the pro
side and the con side.
And so that full
study just kicked off
a couple of weeks ago.
And so it'll be a little bit
aways before we have results.
The first end lines
and things like
that will be within
the next year or so.
So it won't be 12 years.
But it will be a
little bit of time.
That said, about a year ago,
we started providing payments
in one kind of pilot village.
And so it got to sort
of ask people what it's
like to receive a basic income.
And obviously that's
totally anecdotal.
It shouldn't be confused
with the RCT evidence.
But even that was
pretty interesting.
I think if you ask
people what it's
like, you see the things that
are consistent with the broader
evidence.
People spend it in a
ton of different ways
because they have
different priorities.
You saw a lot of spending on
food, especially elderly people
who couldn't work.
Different types of investments
in people's job or businesses,
whether that's buying small
amounts of capital for a shoe
business I saw.
People actually
buying fishing nets.
It's an area right on the
edge of Lake Victoria.
People investing in school fees.
Secondary school
isn't free in Kenya.
Health and things like that.
Some of the unique things were--
we were worried on the
operational perspective,
how people would perceive a
UBI, a few different aspects
of that.
One of them is universality.
Even though the village
we're working in
and the groups of
villages we're working in
are in absolute terms
all very, very poor,
there's still a different decent
amount of income variation
within those villages.
And so in this particular
one, the poorest people
had walls you could
essentially see through.
And the whole house was made
from organic materials-- mud
and thatch and things like that.
And the richest
couple had a tractor.
And so that's a
remarkable distance
in wealth and in income
and things like that.
And so one thing we
asked people was just how
do you feel that everyone's
getting the same amount of cash
support?
Does it seem fair?
Should GiveDirectly,
as we often do,
try to pick the poorest
people in this village?
And people responded
pretty uniformly
that they were like, we were
glad you didn't try to meddle,
that you didn't try to
pick who should receive.
And so was pretty interesting
from a perceived fairness
perspective about
a UBI and connects
to some of the debate people
have about the stigmatization
of receiving benefits
or things like that.
Another, again, qualitative
thing we asked people about
was whether individually
targeted payments were OK.
A kind of potential
benefit of a UBI
is that it frees
people in relationships
because each person has their
own individual security.
And so if a
relationship is abusive
or there's a bad power
dynamic, somebody
could leave or at least be on
a more level playing field.
The flip side, if you're
a foreign organization,
is that it could
look like you're
trying to break up families by
insisting that each person has
their own cell phone and
their own stream of payments.
And so we were worried that
that would be perceived badly.
Again, the surprise was
that basically everyone
said just the opposite, that
individually targeted payments
let people prioritize whatever
was their top priority
and made debates easier.
There was this sense of he has
his money, and I have my money.
And we get to spend
it on what we want.
And so there's
not as much of a--
for the UBI payments, a
shared pool that has to be
fought over.
And so that was pretty
interesting as well.
AUDIENCE: Thank you.
SPEAKER 1: And yeah, some of the
negative income tax experiments
in the 70s seemed
at first to suggest
that divorce rates went up.
But subsequent analysis
found that it didn't.
So it's interesting how this
individually versus family
orientation isn't everything.
AUDIENCE: I wanted to
learn a little bit more
about the evaluation of
the cash transfer program.
So firstly, I wanted
to know how long you
track people for after they've
received the cash payment?
And then in terms of
logistics and scaling
up, do you think that the
evaluation model you have right
now could be then used
by, say, a USAID or one
of the other big
donors for evaluating?
JOE HUSTON: Yeah.
So it varies a lot by study.
And so different
studies are targeted
towards different questions,
which require a different time
horizon.
The basic template structure
is first, external researchers.
And so academics at places like
MIT or Harvard who are helping
design the study with us and
external research surveying
organization.
And so it's not
GiveDirectly staff
asking people about their
consumption patterns.
It's different people from
a different organization
who don't have a
relationship with us.
It's important to
pre-register the study.
Basically say, we're
going to do this study.
Provide a pre-analysis
plan, which says,
we're going to answer
these questions that
help solve for cherry
picking on the studies,
as in not holding
back studies that
have bad results or no results,
as well as cherry picking
on the analysis, not
redoing the analysis again
and again until you get
the results you want.
After that, in terms
of the horizon,
again, that's
varied a lot for us.
We have one study that is going
to have something like 18 month
results out some
early next year.
But it's sort of queued up to
track people for a decade or so
in terms of the sample
size and things like that.
Because GiveDirectly
is younger, our ability
to have a super long horizon
already done is harder.
In the existing literature,
the longest follow up
is a paper in Uganda.
That was that $400 cash
grant I mentioned to use.
And that's gone out to,
I think, the eight year
mark and found
persistent results.
And there's been a study
in Sri Lanka that went out
to five years and found--
it was cash transfers to
small business people--
and found at the five year mark
markedly different earnings
even persisting to that level.
On terms of scale,
in part, the program
we were doing with USAID is a
good example of large funders
are still able to
run those types
of randomized controlled trials.
In many ways, the big con about
RCTs is that they're expensive.
You have to have giant samples.
You have to be able to fund
things like research costs
and things like that.
And so in many
ways, large funders
are best equipped to
help implement them.
SPEAKER 1: A quick
follow up on that.
So it seems like there have
been some long term evaluations.
Have there been long term
treatments in the same way
as that?
I mean, certainly not in
the cash transfer spaces is
my understanding.
But are you aware of others?
JOE HUSTON: Right.
SPEAKER 1: The 12 years
is pretty remarkable.
JOE HUSTON: Yeah.
And so I think the examples--
what I haven't seen as much of
is long term evaluation paired
with long term treatment.
The long term
treatments I've seen
are in places like
Brazil and Mexico
that have been targeted towards
families with young children
and provided conditional
cash transfers to send
their children to school
and followed families
for a long period as a
result. And so getting
into that decade-long
type time period.
And so I think we have
seen examples of that.
I haven't seen the,
personally, the evaluation
paired to check what is it like
to receive cash for 12 years.
But I do think we have seen
examples of that long term
treatment.
SPEAKER 1: I think we had
a question on the [? EPC ?]
real quick.
Are you still there?
AUDIENCE: Yeah.
I'm still here.
I'm Krisna.
I was just wondering
how does GiveDirectly
compare with basic education?
The only other
thing that I found
having extraordinary
effect is basic education.
And, of course,
[INAUDIBLE] high school.
But how does it compare?
How should I think of
giving to GiveDirectly
as giving for basic education?
JOE HUSTON: This is GiveDirectly
versus a basic education.
Is that right?
AUDIENCE: Yeah, exactly.
Do any education
charities working
for getting girls in
school or things like that?
In developing
countries, of course.
JOE HUSTON: Yeah.
And so I think the case
for a basic education
in a country or something
like that is very good.
And I think it's a good
example of the type of public
good or public infrastructure
that is hard for cash
to just replace.
And so in many ways, I think
they're not competitive
and, in fact, are
often complementary,
that a big thing we see people
consume when we give people
cash are school fees to be
able to go to school or school
uniforms or school
supplies or solar lights
to light a home to do
homework and things like that.
And so I think there's a lot of
complements in this ecosystem.
That said, it's a
giving opportunity.
I think, especially
for nonprofits,
it's hard to be helpful
providing a basic education.
And so I think it's
a hard thing to do.
And so I don't know of
a lot of really good
giving opportunities to directly
support basic education,
even though I think it's a
useful thing for our country
to provide and it's an important
thing for a country to have.
It's similar to I think
it's hard for nonprofits
to build bridges or
to build hospitals.
That I think that those sorts
of big lasting institutions you
want to exist in societies
are hard to provide
through donated dollars.
And so as concepts, I
think they're complementary
and both important.
And I think as
giving opportunities,
the case for cash is
a little bit better.
AUDIENCE: Thank you.
AUDIENCE: Hi.
So I'm curious
how you guys think
about balancing your portfolio.
So both geographically,
how do you
choose the locations
you're going
to deploy the programs
to, and then how
do you split between research
programs and just funding
the programs you already
know work pretty well?
I guess I'm also especially
interested in the decision
to start the program
in Houston, which
seems like an outlier in
terms of how much money you
gave per person and also
how much that money can buy.
So yeah, just how do you
think about balancing
your overall portfolio?
JOE HUSTON: Yeah.
And so in general, our
mission is not to--
we don't have an expand mission.
We don't have the goal of
be in every country on Earth
or provide every structure
of cash transfer.
We're pretty
focused-- well, I'll
talk about this Houston
and Puerto Rico thing.
But in general, we're pretty
focused within East Africa.
And each addition of
a country is targeted
towards a particular goal--
a research program
that we think is
especially valuable or
important for policy impact.
Against that kind
of baseline, the way
we evaluate new
projects is I think
a big potential value
of cash transfers
is the indirect
effects on the sector.
And there's a few
different sectors,
whether it's providing
research that's
especially useful for developing
world governments in designing
their own cash
transfer programs,
providing cash transfer
structures that provide
benchmarks for aid programs
that exist around the world,
or in general
pushing on the debate
about how we should help people.
The Houston and
Puerto Rico examples,
we debated a lot internally.
What we saw was
basically an opportunity
to connect different
conversations.
A weird thing that happens
in conversations about giving
and especially
about cash is they
can stay pretty disjointed.
And so the basic
income conversation
can happen without
referencing any of the papers
within the developing world
about a lot of what we already
know about how cash
transfers work.
And so there can be
remarkable ignorance
about all of the things that
have already been studied.
We can sort of
throw up our hands
in Texas about how
do we help people
without any of
this sort of sense
of how helpful
cash transfers can
be in that type of situation.
And so we sort of saw it as
an opportunity to one, in part
provide a set of
pipes to deliver cash
for donors who probably weren't
going to give to East Africa
otherwise.
There were people who
specifically wanted to give it
to Texas or to Puerto Rico.
And so we could provide
that utility to enable that.
And then two, provide
the cash alternative
in a new conversation that we
hope will sort of carry over
into the broader
conversation in aid
and in basic income or
something like that.
And so the bet here, I think,
is that we can sort of connect
conversations that
are staying disparate
and that there isn't
otherwise an allocation
from East Africa to
Texas-- that there
are different giving pools.
And if that's the
case, then it's
absolutely the case
that there should
be some type of utility
for people to give to Texas
and to help those people
better than existing
opportunities had.
SPEAKER 1: We'll move
back to the Dory.
This is a question
I had, actually,
which was about the savings
compacts that were reported
in this Fox article on the basic
income experiment where people
pool up their payments and
give it to a single person
so that they can engage in more
capital intensive investments
or things like that.
It seems like that
presents an opportunity
for financial institutions
or other changes.
So curious to your
thoughts on that.
JOE HUSTON: Yeah.
And so the quick slightly long
explanation of what this is
is in this UBI pilot village
where people were receiving
basic income payments, a
thing people wanted to do
was purchase big
things, bigger than what
their monthly check was.
And so they formed
different types of groups
within the village and basically
made a ledger of each person
every month contributes
some portion
of their basic income payment.
And one person every month
receives all of those payments.
And so it's a way to
convert those stream
payments into semi-recurring
lump sum ones instead.
In terms of financial
institutions,
I think people do have access.
And so I think maybe
the opportunity
is like a sales one.
And so M-Pesa is the mobile
money provider in Kenya.
And it has a ton of
different savings and loan
products built in.
You can have basically
a savings account
on these feature phones,
the same ones that have
Snake and things like that.
You can have a savings account.
You can draw a loan through
your M-Pesa account.
Recently, they added the ability
to buy government bonds, again,
through these mobile money
accounts, which is pretty neat.
And so a question I
have is whether or not
you'll start to see
a take up of that
as the need or demand for these
types of services persists.
And maybe he'll build comfort.
And then on the
other side, there's
a sort of potential for better
outreach and things like that
from financial institutions.
There are also small banks
and micro-finance companies
in Kenya that I could see
potentially moving in.
I haven't seen that
happen much yet,
but I can totally
buy that it could.
Yep.
SPEAKER 1: Would you
guys be willing to,
I mean, you're sort of
underwriting these things
at that point.
Is there a written
guarantee of the stream?
JOE HUSTON: Right.
Yeah, it's interesting.
I don't know how to
turn the GiveDirectly
promise into something
you could lend off of
or something like that.
It's a verbal guarantee.
But maybe the sort of track
record-- by year three
or something like
that-- enables that.
I don't know.
SPEAKER 1: So I think we're
just about out of time,
but one last question on
the transfer efficiency
of the basic income experiment
relative to cash transfers
and maybe long run
expectations there.
JOE HUSTON: Yeah.
And so the different trade offs
for the basic income experiment
are there are more payments.
And mobile money providers
have a per payment fee.
And so there is more payments
per value distributed.
And so mobile money fees
are a little bit higher.
We have to have our call center
running longer per recipient
because people are getting
paid for two years.
And so there's higher
follow up costs.
That said, the total
value distributed
is higher per recipient than
our typical $1,000 payments.
And the way that all nets
is that the two-year arm
is much less efficient.
It's something like 75% or 80%.
The 12-year arm is
much more efficient.
And the combination of those
two, the weighted average
across those different arms is
about in that 88%, 90% range.
The next question on efficiency
was actually [? Harvey, ?]
which is pretty interesting.
And so we found the balance
of costs are very different.
Labor is a lot more expensive
to sign people up for cash
here than in East Africa.
But there is zero effects for
us and payments are cheaper.
We're at the debit
cards are basically
zero fees for us and
for the recipients.
And so efficiency at the scale
we'll be able to operate at
is a little bit higher
than our typical program.
SPEAKER 1: Interesting.
Great.
Well, thank you so much
for coming to Google.
JOE HUSTON: Yeah, thank
you so much for having me.
[APPLAUSE]
