Question

Imagine that the United States government planned to shift $10 billion dollars of annual spending from traditional foreign aid programs to unconditional cash transfers to the world's poorest people. Answer two questions about this: 1. What is the strongest argument in favor of this policy change? Be sure to explain why the argument you identify is the strongest one. 2. What is the strongest argument against this policy change? Be sure to explain why the argument you identify is the strongest one.

Answer 1

1)

Unconditional cash transfer would help to reach money to actual needy poor people. It will directly inflate income of poor while fund channeled through traditional foreign aid program does not reach to genuine needy people. Immense corruption and lack of good governance hammer flow of fund to needy people.

Hence, it would be right decision to directly transfer money to poor people. they will use such money for enriching their capabilities by investing such amount in education and skills development.

2)

There is strong argument against transferring direct money to poor people. It does not fit into economic principle. Poor people should not be provided with unconditional cash transfer. It will kill incentives to work and earn money. Further, poor people do not know how spend such money in most beneficial manner. Hence, instead, they should be provided job opportunities.