The power of cash to shape our own future
the power of cash
to shape our own future
eM believes that cash transfers as an intervention is an approach that can be applied to support some of the most exploited and vulnerable populations in society. And here is why…
what IS happening
changing the way we think about cash transfers
put simply – cash transfers work
The Overseas Development Institute undertook one of the most rigorous reviews[i] of cash transfers, in over 160 programmes spanning 15 years, and found that cash transfers had an overall positive effect on poverty reduction measures. For all three groups we explore below – ex convicts and people facing sexual exploitation and modern slavery – access to employment and reduction in negative social behaviours would be seen as positive outcomes for any intervention.
Even in financially constrained contexts, we have seen cash transfers achieve this. In Namibia, for example, a universal basic income intervention saw crime reduce by over 40%, whilst self-employment increased by 301%, matching income levels from formal wages[1]. These remarkable results are not unique. Give Directly[ii]’s multiple transfer programmes have been documented through randomized control trials that have seen a $270 increase in earnings per $1,000 and multiplier effects through a $430 increase in assets and $330 increase in nutrition spend.
The Brookings Institute estimates that just $70 billion of cash transfers is required to eliminate the poverty gap, yet the aid sector currently spends $135 billion each year, much of which is spent on evidence-free interventions. Cash transfers are likely to be a far cheaper and more efficient form of social protection, and one that directly reaches those who are most vulnerable.
so why are so few people able to access these social safety nets?
Despite the fact that the global scale of existing social safety nets (regular and predictable support to the poor) could cover almost all of the world’s extreme poor – over 1 billion supporting the 1.2 billion people living on less than $1.25 a day – less than a third are able to access these safety nets, and a third of those who can live in upper-middle income countries where only 12% of the world’s extreme poor live[i].
The good news is there has been exponential growth in social safety net programming, especially cash-based interventions. By 2013, over 37 sub-Saharan African countries were engaging in a form of unconditional cash transfer. The bad news is, the spread is disproportionately weighted: the 5 largest programmes in the world (for example school feeding in India) accounts for almost 50% of total global coverage; and the spending involved in these programmes is often insufficient to lift households out of poverty.[ii]
we need to build data so we can have evidenced discussions on what works
Instinctively, we understand that prevention costs less than the cure. This has been proven in sector after sector – so why wouldn’t poverty reduction (or, as we will argue, reduction in exploitation) be the same?
in the health sector alone, we have seen this work. It cost just $32 million to eradicate smallpox in the USA over 10 years. This amount has been recouped every 2 months since 1971, all through “cure” cost savings (smallpox vaccines, administration, medical care and other costs)
every $1 billion spent on polio vaccines has saved 6 times that amount in curative costs, whilst every $1 spent on an MMR shot saves $13 down the road[iii]
and it’s not just health. A study in Florida found that the prevention costs of providing housing for the homeless population was one third of the costs in medical and criminal justice systems down the road[iv]
These are impressive savings. We now need to generate an evidenced understanding of whether this same approach: prevention-over-cure, can be generated through cash transfers to specific groups of marginalised people. Essentially, whether cash transfers and universal basic income could become a social vaccine for marginalisation, exploitation and poverty.
can we apply this to support specific marginalised people?
case 1 - reducing recidivism rates in the prison system
Around the world, our criminal justice system is in crisis. Prisons are dangerously under-resourced, yet the number of people incarcerated is growing whilst the rates of re-offending remain too high. Too often, it is the least educated, poorest people who find themselves in prison; to ignore the link between socio-economic opportunity and both incarceration and recidivism is simply unviable.
can we justify introducing cash transfers to the criminal justice system?
Until evidence exists, it is unrealistic to claim justification for any intervention. However, there is justification to build that data in the first place, and here is why:
recidivism rates are too high
it is almost impossible to state global rates of recidivism – barely 20 countries regularly report on them – yet those that do often report rates as high as 50%, and the trend is not declining[i]
there is a strong link between economic status and recidivism
with the backing of the UN SDGs – applying a development lens to criminal justice policy – rehabilitation and reintegration of offenders is meant to be a primary aim of the global criminal justice system. Yet the majority of people in prison come from low-income communities and are not empowered to achieve their potential. Tackling these economic inequalities through disruptive and transformative methods such as cash transfers could be a way to re-imagine the criminal justice system and build towards lower incarceration, and lower recidivism rates across the world[ii]
in Uganda and Kenya where I have lived and worked for the last 5 years, the situation is even worse. The African Prisons Project[iii] reports that many prisons are operating at 300% capacity, around 80% of people in prison are unable to afford the most basic access to justice, whilst imprisonment has been shown to exacerbate crime rates rather than address the issues of crime in communities
it would save the system money
huge numbers of people live in prisons, costing governments vast sums of money each year. The Penal Reform International report[iv] identifies that whilst overall crime rates have declined globally, the number of people in prison is rising. In fact, between 2000 and 2015, prison populations rose by almost 20%, a rate slightly higher than world population growth over the same period. This translates to over 10.35 million prisoners incarcerated globally in 2016 (with the true figure likely to be much higher)
in the United States alone, more than 40% of offenders return to prison within three years of release, despite over $50 billion being spent on prisons each year[i]. Just cutting recidivism rates by 10% across the USA would save over $635 million
the perception that cash transfers reward crime is naïve
in reality, there is clear evidence that tough prison sentences do not deter offenders from committing crime, but rather, that it tends to increase criminality after release[ii][i] Reuters – Article [ii] Penal Reform International – 2018 Report
cash transfers work. But can they work with prisons?
We believe so. The small amount of data that does exist is positive, but more needs to be done to build evidence around this important link:
cash transfers, including universal basic income, have proven to have positive impact on social cohesion, resulting in reduced crime rates and high-cost recidivism
in Alaska – an average annual dividend of $1,000 has been transferred to its citizens since 1982. The state sees the lowest rates of poverty and inequality, and more importantly the highest rate of wellbeing of anywhere in the USA
this isn’t just an American story. UBI programmes in Namibia[i] saw a 42% drop in its crime rate, a 301% increase in self-employment, and the mobilisation of a community committee to further improve social cohesion. These kinds of results have been replicated in India, Lebanon and beyond
economics often lie at the heart of negative social behaviour. Despite international standards requiring prison detention to be used only as a last resort, people are often incarcerated for petty or poverty-related crimes such as theft. These economic incentives don’t change for reformed ex-convicts who face increased barriers to creating a stable life outside of prison. Addressing financial challenges should accelerate reintegration, the transition to stable employment and ultimately reduce recidivism
whilst small-scale, initial results from crime-prevention programmes in the USA generate optimism. In California, cash grants are given to youth associated with gun violence, whilst in Boston students with criminal records get conditional grants based on continuing progress in education. Both programmes have led to reduction in homicide rates across the city and drops in the criminal activity of the participants themselves[ii]
a larger-scale study in the USA (on over six million prisoners) found that recidivism rates decreased when minimum wages were raised[iii]
It seems viable that the same economically-driven incentive mechanisms could have a positive impact on recidivism. Instinctually, if a cash transfer intervention can fill poverty gaps and relieve acute symptoms of financial challenges, people will be freed to make decisions that not only benefit themselves but the safety of their community. Instincts are not enough though, we need evidence.
how can we get this evidence?
Put simply, we want to run studies where cash is transferred to people leaving prison and rigorously evaluate the impact this has on their socio-economic situation upon re-entry into society, and the rates of recidivism – rates of return to prison.
The structure of this intervention could be multi-layered:
Layer 1 - unconditional cash transfer (outside of prison)
Layer 2 - conditional cash transfer (outside of prison): tied to supervision and support programmes[i] that are proven to reduce recidivism, with phase out of conditionality over time (increase in years without re-conviction = reduction in conditions tied to cash transfer)
Layer 3 - conditional cash transfer to prisoners in prison, whilst serving their sentence
large amounts of money are spent each year to house inmates. We would test whether giving a proportion of that cost directly to prisoners, to spend on rehabilitation and development programmes of their choice, would further reduce recidivism rates
case 2 - tackling exploitation by giving financial power back to the victims
Exploitation takes many forms, yet two of the biggest areas of concern globally are sexual exploitation (through trafficking and forced prostitution) and modern slavery. Globally, 35% of women are estimated to have experienced physical or sexual violence. That translates to 120 million girls who have experienced forced sex and almost 750 million women alive today who were married before their 18th birthday.[i] The situation is worst in low- and middle-income countries where close to 17 million adult women report having experienced sexual abuse in childhood[ii]
Human trafficking is at the heart of this trend, and the number of victims is growing: there are over 30 million victims of human trafficking worldwide, with rates doubling between 2008-2016[iii],[iv]. Almost 80% of these victims are being sexually exploited; roughly three quarters of victims are female; and recent estimates project that over 40 million prostitutes are working globally[v],[vi]. Second only to sexual exploitation is forced labour and modern slavery, a $150 billion-dollar industry[1] that doesn’t look set to slow down.
These numbers are overwhelming. Which is incentive in itself to simplify the complexity of response and look to achieve the most direct route to dismantling the economic incentive structures that remove people’s freedom to choose how they generate incomes to meet their basic needs.
2a) sexual exploitation
could cash transfers be the answer to reducing sexual exploitation?
Let’s find out. As with reductions in recidivism, there is a strong economic argument that relieving the symptoms of acute financial barriers can free people to make decisions about when, where and how to earn an income.
cash transfers, including UBI, don’t lead to people choosing not to work, but instead to people having the freedom to choose how they work
over 20 million people worldwide are trapped in jobs which they cannot leave, whilst 92% of people engaged in prostitution said they wanted to leave but couldn’t due to lack of money.[i] Many studies recommend solutions that develop relevant, real and sustainable opportunities to generate alternative – non-exploitative – sources of income
That is intuitive. Without alternative means of meeting your basic needs, the risk of sexual exploitation can only be higher. In fact, underlying all exploitation, sexual or otherwise, is the premise that “I can’t not do this because I need the money”. More complex than that? Perhaps. But if economic vulnerability is at the core of the issue, why not explore the option of cash transfers, or universal basic income, as a solution? It comes down to the economics of choice – being able to volunteer into work, relationships, and market exchanges; being able to say no in the face of someone with more power than you.
conditionality – is this realistic in extremely vulnerable contexts?
Many existing cash interventions have been aimed not solely at giving those exploited sexually the power to make the best decisions for themselves, but to incentivise a specific and different behaviour:
this has led to mainly conditional cash interventions: in Malawi, women aged 13-22 were given cash transfers (some conditional: to attend school regularly; some unconditional) leading to a 60% reduction in HIV prevalence and transmission through transactional sex; in South Africa, cash transfer programmes were tied to community mobilisation; whilst RCTs in Uganda and Kenya found reduced sexual risk taking as an indirect result of cash transfers aimed at improving food security[i], [ii]
But is it worth reversing the way we think about this?
programmes in India and the Philippines have demonstrated that applying a universal living wage can not only have immediate impact, reducing levels of commercial sexual exploitation of adolescents and young women, but can also generate multiplier effects without conditionality: enabling women to stay in education, follow positive personal goals such as postponing early marriage, and the pursuit of careers that don’t leave them vulnerable to abuse[i]
it makes sense that many cash transfer interventions have relied on conditionality – often they are targeted at young women and children who are seen to require additional monitoring and guidance. Yet, conditionality requires the existence of other services to be in place (free schools, access to medical services). Where the most vulnerable populations are concerned, this is often not the case, therefore it is our responsibility to generate an evidenced understanding of the potential of unconditional cash transfers in these contexts
Historically, cash transfer programmes have been limited to livelihood, food security and health programmes, with rare use in other sectors. For the victims of sexual exploitation, it is an under-explored solution, and one we believe we have the responsibility to study.
2b) modern slavery
we live in the 21st Century, slavery can’t be a problem still?
Despite being illegal everywhere, over 36 million people are enslaved worldwide; whether trafficked for sexual exploitation, forced into manual labour as adults or children, or victims of debt bondage.[i] In an age of modern technology and globalisation, this is simply unacceptable.
to say that tackling this is complex is an understatement. As work in my current home-country of Uganda has shown, too little coordination with destination country governments and recruitment agencies; limited funding for Ministries of Internal Affairs; and insufficient training for front-line officials tasked with identifying victims, are just the start of the barriers to solving this[ii]
often countries act as both a source, transit location and destination country for slaves adding to the complexity of response. Identifying illegal transportation and enslavement of people is tough in a world where an economically vulnerable mother in Uganda is offered a job as a waitress in Dubai for a salary of $500/month, only to be forced into non-paid labour on arrival: essentially, held hostage through debt bondage
the good news: cash transfers have proven effective in stopping this
Whilst only a tiny number of programmes exist, unconditional cash transfers, often given in addition to (rather than conditional on) the provision of broader services, have proven effective:
the Bangkok-based Issara Institute[iii] has supported forced-labour victims by giving them 3 consecutive instalments of unconditional cash, as well as supporting access to holistic services including healthcare, legal advice and employment-seeking help. The philosophy is simple: no one knows the needs of modern slaves better than the people themselves, yet they often lack the resource and financial autonomy to make decisions
Cash transfers have also been particularly effective in programmes tackling child labour in low-income countries:
whilst questions remain over the unintended consequences (where a cash injection can provoke increased household productivity, in turn creating new opportunities for child labour) when linked to social protection systems, conditional cash transfers have proven effective in reducing child labour in East Asia[i]
this conditionality is mirrored across many interventions: a 2010 study in Cambodia found students were 20% more likely to enrol in school and 10% less likely to work for pay with conditional cash transfers; in Brazil, mothers were given a monthly stipend to withdraw their children from labour and enrol them in full-time education; whilst cash grants given to families to care for children who lost parents in the devastating 2004 Tsunami in Indonesia resulted in higher child wellbeing and lower rates of child labour[ii]
This feels intuitive. Cash transfers can cushion the effects of economic shocks that lead households to use child labour as a coping strategy – a dynamic underpinned by broad evidence (see the World Bank’s global review, 2014) and honest common sense. Despite this, cash transfer interventions still make up only a fraction of development initiatives overall and are basically non-existent when it comes to tackling human trafficking and slavery.
so what’s next?
We would like to partner with experts, leading organisations who have experience working with people facing exploitation, to introduce cash transfer studies into their models. With rigorous evaluation, we would prototype several iterations of the approach, including:
universal basic incomes
conditional transfers
unconditional transfers – with linkages to wider support services
our philosophy
how we learn is as important as the outcome itself
All of our partnerships and studies will be formed on the basis of key conditions for success that underpin eM’s approach to driving results:
what we are looking for
We are currently seeking partners to help us develop these studies and join us on an evidenced learning journey to have real and transformational impact on the lives of those who need it most.
Partners to us means those willing to co-develop and lead this approach; thought partners; those willing to provide financial and logistical support; as well as organisations who are delivering solutions in these spaces and are open to collaborating on studies that can really begin to add evidence to the debate around cash transfers to people who face exploitation and disadvantage.
To help me shape this – and dialogue around what is needed to make it happen, please get in touch:
Emily Akers
emilyakersconsult@gmail.com
+256 (0) 751147821 / +44 (0) 7946365964
