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Global Ethics Corner: The Ethics and Effectiveness of Basic Income Grants

March 19, 2010

Namibia has the most unequal income distribution in the world. The village of Otjivero-Omitara was a typical Namibian village, beset by poverty, AIDS, alcoholism, and crime.

There, non-profits launched a small pilot program. Every resident received a basic monthly income grant, regardless of their work status or additional income.

After the grant, malnourishment of children fell from 42 to 10 percent, school had higher attendance rates and children were more attentive, crime dropped by 36.5 percent, unemployment dropped from 60 to 45 percent, and incomes, above the grant, increased by 29 percent.

These basic income grants may have jolted the poor out of a poverty cycle, helping them to find work, start businesses, and attend school.

Because basic income grants speak to both liberty and equality, the idea attracts advocates of many political positions, and may reduce the size of government as well as poverty.

Critics are concerned that grants provide a disincentive to work. Advocates argue that they encourage work, because people don't lose welfare income when they take a job. Critics contend that grants compete with funding for public schools and healthcare. Advocates argue that money is saved on administering welfare because grants work through the tax code.

What do you think? Can basic income grants work elsewhere? Are they a requirement of responsible government? Or, are grants an excessive intrusion of government into individual responsibilities?

By William Vocke

Adapted from Debbie Chung "Basic Income Grants Alleviate Poverty in Namibia."
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