And that seems to be true whether you define “poverty” in terms of income, assets, food security, or psychological well-being:
Households who received transfers experienced on average a 33 percent increase in incomes coming from sources such as livestock and non-agricultural businesses and increased the value of their household assets by 53 percent, largely in the forms of livestock and improvements to their homes. The money also reduced the number of days children went without food by 42 percent.
That is from the IPA press release (here), also see IPA’s summary here, and the policy brief by Shapiro and Haushofer here.
I would remind readers that the kind of unconditional cash transfers done here (a la GiveDirectly) is very different from the kind of transfer done by Blattman et al, Benhassine et al, and others, and that cash transfers are not exactly a panacea (which should be obvious anyway).
Nonetheless the evidence so far all points in the same direction: that unconditional cash transfers are very good for boosting incomes, boosting assets, reducing hunger, feeding kids, keeping kids in school, and changing cultural norms about education, in some of the poorest communities in the world, at least in the short term. That doesn’t necessarily help with other problems (e.g. enrolling kids in school, also see The Economist), but it’s still very important, and just as importantly: it seems that very poor people are very likely to know what they need to become wealthier and happier than some (many?) charities do.
Chris Blattman has some good comments on this study, including some reasons to be skeptical (are people just lying to surveyors? are the effects temporary? and so on). On the bigger picture with respect to cash transfers vs. other forms of development programs, he writes:
The kinds of programs we should put squarely in our sights, and consider replacing with cash, are the kinds where we deliver expensive, heavy, cumbersome stuff to people because we think we know what they need–bags of rice, business skills trainings, vocational training, fertilizer, agricultural inputs, and the like.
…and I would note that that sounds a lot like what the Millennium Villages Project did in its first 6 years.