Headline Oct 30, 2015/ ''' POOR STUDENTS '''.... AND !WELFARE?

''' POOR STUDENTS '''.... 


ONE BILLION PEOPLE in developing countries participate in a social safety net. At least one type of unconditional cash assistance is used in-

119 countries. In  52  other countries, cash transfers are conditioned on relatively benign requirements like parents enrolling their children to school.

Professor Abhijit Banerjee, director of the   Poverty Action Lab    at the Massachusetts Institute of Technology, released a paper with three colleagues just two weeks ago that carefully assessed the effects of-

Seven  cash-transfer  programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found ''no systematic evidence that cash transfer programs discourage work.

A World Bank report from 2014 examined  cash-assistance programs in Africa, Asia and Latin America and found,  contrary to popular stereotype, the money was not typically squandered on things like alcohol and tobacco. 

THE SAD TRUTH....... is that few few ideas are so deeply ingrained in the world and American popular imagination as the belief that government aid for poor people will just encourage bad behaviour.

The proposition is particularly cherished on the conservative end of the spectrum, articulated with a verve by Charles Murray of the American Enterprise Institute, who blamed welfare for everything- from youth unemployment to increases in every evil.

The great American President, Franklin D Roosevelt, the father of the New Deal, called welfare  ''a narcotic, a subtle destroyer of the human spirit.''  And it was former President Bill Clinton, a Democrat, who put an end to  ''welfare as the Americans know it.''

Today, almost 20 years after President Clinton signed a law that stopped the federal entitlement to  cash assistance for  low-income  families  with children, the argument has solidified into core tenet influencing social policy not only in the United States BUT AROUND THE WORLD.

And yet, to a significant degree, it is wrong. Actual experience, writes this very distinguished author,...from the richest country in the world to some of the poorest places on the planet, suggests that: Cash assistance can be of enormous help for the poor. 

And freeing them from what former President Ronald Reagan memorably termed as the   ''spider's web of dependency''    -also known as forcing the poor to swim or sink   -is not the cure-all for social ills its supporters claim.

**Still, Professor Banerjee observed, in many countries '' we encounter the idea that handouts will make people lazy'' **. 

Professor Banerjee suggests that the spread of welfare aversion around the world might be an American confection:

''Many governments have economic advisers with degrees from the United States who share the same ideology,'' he said. ''Ideology is much more pervasive than the facts.''

What is most perplexing is that the United States own experience with welfare and its ''reforms'' does not really support the charges.

The charges that welfare will become a way of life reproducing itself down the generations is also dubious. Before welfare reform in 1996, some four in 10 Americans on welfare were on it for only one or two years. Only about a third were on it for five years or more.

And what about jobs? There is little doubt that welfare can discourage employment, particularly when recipients lose benefits quickly as their earnings from work rises.

The Honour and Serving of this ''Economics Operational Research'' continues. Thank you for reading and see you on the following one.

With respectful dedication to the Students, Professors and Teachers of the Developing World. See Ya all on !WOW!  -the World Students Society Computers-Internet-Wireless:

''' BreakingViews '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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