[MUSIC PLAYING]
[APPLAUSE]
JOE HUSTON: Yes.
So thank you, guys, so much for having me.
In general, Google was super early
in supporting GiveDirectly and the Google community broadly
and in helping people out who are extremely poor by sending
cash through our platform.
And so we've always felt really close to the Google community.
And it's nice to be able to come back and talk about what we're
up to, some of the debates that are happening
within the development and other sectors, and how cash, I think,
is moving those forward.
As Max said, I've worn a few different hats at GiveDirectly.
When I first started at GiveDirectly,
I was in Kenya on the operations side,
managing our team, signing people up to receive cash.
I spent a year and a half or so there, about a year and a half
in Uganda, and just recently switched back
over to the finance side in New York.
And what GiveDirectly does is pretty straight forward.
We send cash unconditionally to people living mostly
in extreme poverty.
That cash is a grant.
It's not a loan.
People can spend it however they want.
In the most typical model, we will send about $1,000
in a couple of chunks over the course of a few months.
And then people spend it on whatever they want.
In total, we've raised almost $150 million
to deliver as cash transfers.
And we've enrolled over 80,000 households.
Because our operations are fairly straightforward,
we're able to stay remarkably lean.
And so, on average, about 90% of what
we raise for cash transfers gets delivered directly
to people's hands at the end of the day.
And then as we're doing all of this work,
we're constantly running different types
of research studies.
And so when we first got started in Kenya,
we ran a randomized controlled trial
testing a bunch of different things about cash transfers--
comparing large lump sum cash transfers to recurring stream
transfers, testing whether or not male recipients spend money
differently from female recipients,
as well as the effect of cash transfers
on a ton of different outcome variables, earnings
and assets, consumption, but also things
like stress and depression and things like that.
Since then, we've done a number of different research studies.
We can talk about things like looking at the effects of cash
transfers on macro--
the macro aspects of the economy--
behavioral aspects of cash transfers,
how cash transfers affect coffee farmers,
and how they invest in their farms and things like that.
Operationally, the process looks a lot like a sales and customer
service operations.
We'll go door to door and collect data
on the people who could potentially
receive cash transfers, run a pretty simple logic
to decide who is eligible, then go back
and collect a little bit more data
and inform them about the program.
We'll then send the money, typically through Mobile Money.
And so that looks like Venmo, but you're
able to cash out basically anywhere around you.
And we can send thousands of payments
with a touch on a laptop.
And then we have full time call centers
in each of the countries where we work.
And so after every time we send payments,
we're able to call people up and confirm that they've
received it, ask if they have any feedback for GiveDirectly,
and understand if they've had any problems.
Now that model of just giving unconditional cash
is very different from how we're taught through aphorisms
or parables about how we're supposed to approach giving.
There's this idea that you're supposed to teach a man to fish
or not give him a fish.
Or that you should give a hand up but not a handout.
And I think behind that, there's this idea that giving cash
can't be sustainable.
And there's also this idea that we should distrust
the people we're trying to help somehow, that giving them money
could be corrupting.
Or if it's not corrupting, that we just
can't trust from the outset that it could be spent well.
Behind that basic debate, the stakes
are actually remarkably high between how we
should approach helping people.
To give you a sense, this is one way
of visualizing what's up for debate.
The blue line is global official development assistance.
It's one measure of this total amount
that governments are spending in foreign aid.
The line that's going down over time
is the cost of closing the poverty gap.
You can think of this as taking everyone
who is below the global poverty line
and visualizing how much in cash it would take to get them
to the poverty line.
Now, there's a lot of reasons why
that's a simplistic picture of what's going on.
But the basic synthesis is that we have incredible resources
available to help the people we're trying to help,
to help the people in extreme poverty.
And a lot of the problem of aid and development
is an allocation one-- that it's not
so much that we need more resources,
but we need to better allocate them.
And so this debate about how best should we
help people is actually extremely important.
So luckily, we don't have to have
this debate in this arena of dueling assertions.
It doesn't have to be this theoretical or philosophical
debate about what people are really like.
We can test it.
A development that's happened over this last couple
of decades within development economics
is moving a little bit away from theory
towards actually putting things into experimental evaluations.
And so the gold standard approach to this
is what's called a randomized control trial.
It's the same way that we test medicines--
by randomly assigning people to either receive or not
receive a treatment and then using external evaluators
to test the differences in the different outcome variables
between those two groups.
We've learned a lot of different things
from that about different interventions we use.
We've learned that we're actually
pretty bad at training people or teaching people to fish.
The effects of microfinance and things
like that are actually pretty mixed.
We've also learned that the effects of cash
are remarkably consistent, that the exact impacts can vary
a lot by the structure of the cash transfers
or the people who are receiving them or the context.
But you see a few consistent themes.
First, people spend it pretty well.
You see increases in earnings and consumption,
decreases in food insecurity, improvements in nutrition,
often increases an uptake on things like health services
or actual improvements in health in terms of fewer accidents
or better health.
You see decreases in stress.
To give you a sense of the variety of responses
to cash or to security, one study in Malawi
tested giving the families of young women
a small recurring cash payments-- so just a little bit
of security, not a total game changer.
What they found is that those women whose families received
got married later, pregnant later,
and had lower rates of HIV relative to the control group.
Because they had a little bit more security in society.
On the other side of the spectrum,
a study testing giving young people about $400 all at once,
if they went back and compared that group of people
to a control group, and found that their earnings
were 40% higher.
That basic result was mirrored in GiveDirectly study that
found that a year after people received about $1,000,
their earnings were 30% higher and their assets
were 58% higher.
The other things you don't see are the things
people are often worried about.
There is this sense that if you give people money,
they might drink it.
Or it will be corrupting, and they'll stop working.
But all of the evidence we have from what's
been 165 different studies of cash transfers, which suggest
that that doesn't happen.
The studies have found that this consumption of, quote,
"temptation goods"-- things like alcohol or tobacco
or gambling-- either has stayed the same for cash recipients
or has gone down.
And similarly, the work effort-- how much time people are
spending working--
has either stayed the same or gone up
in the different studies that have been
done in the developing world.
The other thing that's happened more recently
over the last decade is an explosion
in mobile money, which has made delivering
cash transfers a lot easier.
And so today, there are 93 countries with mobile money
and over 400 million current mobile money users.
That makes this job of getting cash into people's hands pretty
easy.
And the mobile money infrastructure
doesn't have to be as robust as it
is in Kenya, which has the best network in the world.
It can actually be pretty lightweight.
A study we did in Uganda tested the limits
to say, how good does the payments infrastructure have
to be for mobile payments to work?
And so we found just about the most remote place
you could go to in Uganda--
a place very, very North in the country,
just on the border with South Sudan--
where people typically would walk something
like four or five hours to get to the nearest town,
which was also where the nearest paved road would be.
We found that if you sent mobile money to a place that actually
didn't have any mobile money providers there already,
this market responded-- that the market incentives for cashing
people out worked.
And agents came to the village to cash people out.
And so this technology exists to get cash into people's hands
really, really cheaply.
As a result of those, there are two trends.
There's a ton of different applications
where we can use cash transfers to solve or address
a bunch of different types of problems.
And so to give you a sense, these
are some of the projects GiveDirectly is working on
around the world.
And so the first one is the thing we've done most often.
It's these large one time cash grants of about $1,000.
And I think these are best geared
if you want to give people investment capital.
And so you see bigger increases in earnings
that expect large increases in assets and things like that.
You can also use cash transfers to address humanitarian issues.
And so we just started a project in Uganda,
which has taken in a lot of different refugees
from surrounding countries.
The typical approach to these types of crises
is to pay people who run settlement camps per head
by this number of people they're supporting.
And while that seems intuitive, the incentives are all off.
Because the incentives are to keep people alive,
but not support them to move on with their lives.
And so the test we're doing in Uganda
now is giving people about $750 and letting them
to spend it however they want.
You can also use cash for things like a universal basic income.
And so I'm sure we'll talk about this more in Q and A.
But the basic idea here is if you want to make sure
that everybody is living up to a certain standard of living,
one way to kind of mechanically insure
that is to give everyone a cash transfer equal to the cost
of that standard of living.
And so GiveDirectly just launched
to study in Kenya distributing different types of cash
transfers to about 16,000 people,
with some people receiving a universal basic income
for up to 12 years.
On the other side of the spectrum,
you can use cash transfers for things like disaster relief.
And so something GiveDirectly did
this year is launch in Texas and Puerto Rico
and hand people out debit cards for about $1,500.
That's not a life changing amount
of money in either of those places.
But it does help sort of fill the gaps
in terms of what people aren't receiving from the existing
support network or the existing NGOs doing disaster relief.
And it lets people buy whatever is their top priority
within that price range.
There's a big industry that exists
around things like fair trade or CSR for companies
to try to give back to the people they are working with.
And so one thing we're testing with a sort of foundation
arm of a coffee company is just giving cash transfers
in a coffee growing area.
And so we're working in eastern Uganda.
Picked an area which is growing a lot of coffee and
are giving people about the same $1,000 cash grants
and seeing how it in general changes their lives,
as well as how it changes their coffee
growing practices, whether they start doing longer term
practices and how they approach the plants
and things like that.
And this last thing is a project that I'm really excited about,
which is something we're doing with USAID in Rwanda
and potentially other countries, which is using cash
as a literal benchmark for their existing programming.
And so we're running side by side randomized controlled
trials in Rwanda, testing for goals that they have.
And so in one case, it's a nutrition program
that has specific nutrition goals how we could structure
a cash transfer program designed to meet those goals
and basically produce a report card answering the question.
Is the programming you're doing better
than just giving the people you're trying to help the cash
and letting them spend it?
And so that provides a literal benchmark for us to say,
are we allocating money correctly?
And so something that's been happening in this sector
as we've had this mountain of evidence build up
and as the logistics of delivering cash
has become a lot easier is that the rhetoric
has changed dramatically.
It's less so that the idea of giving cash
is seen as crazy or nuts or corrupting.
And instead, you see things like this from Ban-Ki Moon.
He said that cash programming should
be the preferred and default method of support.
A different sort of summary of the evidence on cash
called it perhaps the most thoroughly researched
intervention out there.
And so that's actually extremely exciting,
except that the funding hasn't changed.
If you look at the overall portfolio of how we're
spending our money to help people,
it's still spent mostly not by the recipients
we're trying to help, and instead by policymakers
and bureaucrats and donors in places like New York
or D.C. or London.
And so less than 1% of US aid funding is cash-based.
Less than 2% funding of UK aid funding is cash-based.
And the same is true in the humanitarian sectors as well.
And I'll pause to note that the rest of the pie
is not the give well top charities.
That's not the kind of most evidence type interventions
out there.
There's a remarkable inertia in the sector
that we're still trying to fight.
And the consequence is that because we're not
solving the allocation problem at the front,
it gets solved on the back end a lot.
And so you see things like this from one refugee camp
where 70% of Syrian refugees were selling portions
of food aid they were receiving to get what they actually
wanted.
And so the markets are still responding
to try to correct the allocation but only further and further
down the chain after we've shipped food from other places
into the country.
And so what can we do about it?
We have these really effective tools.
We have this evidence.
As donors, how can we approach this basic problem?
Well, part of this stagnation in the sector
is that it doesn't respond how like consumer
goods or, in general, a market economy respond.
And so if you look at a phone like a product,
we've had remarkable innovation.
We've gone from this rotary dial landline phones to the iPhone X
or something like that.
And the reason is because there are market incentives
to respond to the consumer.
Well, the problem with the development sector
is that the donor is the person who pays.
But the recipient is the person who is affected.
And so you don't see the same types of incentives
exist to have the same type of innovation.
And so you often see persistence in the same types of tools
that we use again and again.
And so somehow we have to become better donors.
And so these are three questions you can use to force that
and to force the organizations you're
working with to be more and more responsive to the people you
and they are trying to help.
The first one is trying to understand
what the end-to-end cost of the intervention is.
How much of your donation actually ends up in value
provided to the recipient at the end of the road?
Now, there's lots of problems with overhead metrics
and things like that.
And this is not that.
A problem with the sector is that it's
heavily intermediated.
And so one nonprofit will take your donation
and give it to another nonprofit after sort of skimming
a little bit off the top.
They'll skim a little bit off the top for overhead
and give it to another nonprofit.
And even if the reported overhead is very low,
each of those nonprofits only taking about 1%,
the systemic overhead is extraordinarily high.
If you have a chain of those nonprofits repeatedly
subgranting to each other, the end value
that's reaching the recipient is actually very, very low.
And that's a practice that you see again and again and again
in the sector.
The next thing is evidence backing.
Has there been an external randomized controlled trial
of this sort of intervention the organization is implementing?
How do we actually know that it works?
And use the same standard you would
want for a medicine you would take
or a product that you would bet your life on.
And lastly, there's this benchmark question.
Is the funding you're providing to the organization
and the program that they're implementing
doing more good than the people you're actually trying to help
could if you just gave them the cash?
Now, there's plenty of interventions that might meet
that standard-- very specialized medical interventions,
for example, or cases where there's a public good problem--
infrastructure, or maybe rule of law.
There's a particularly good giving opportunity there.
But a lot of the things we're doing
are trying to outspend the poor about things
that they know far more about.
And so I think a lot of the spending we're doing
wouldn't meet this sort of basic test.
I think the last thing that's worth
pausing on before we go to Q and A
and dig into a bunch of other things
is why is it worth giving at all.
And here I would say the existence
of incredible opportunities to have impact.
I think cash is one of those.
But there's lots of other non-profits
that are actually doing good work.
Provides a pretty amazing opportunity
to do something great with your life
that almost as a side product of your day-to-day life
by donating a certain small percent.
Your life can be basically the same, except as a side product,
you can dramatically change and better lives of people who
are living in extreme poverty.
And that's a cool opportunity to do with your 80 years on earth.
And so I think despite the dark look on the sector,
I think there is this incredible opportunity out there provided
by good giving opportunities that make giving worth doing.
And so with that, I'll turn it over to questions
and looking forward to conversation.
[APPLAUSE]
SPEAKER 1: I actually want to start with just
a question about your own role.
So this is amazing work.
I mean, for example, the Malawi thing,
I just learned about that yesterday about HIV.
So you keep learning new things about cash transfers, which
are amazing.
But I'm curious from the financial angle,
what kind of unique problems--
I imagine there are some-- that GiveDirectly deals
with that you're exposed to?
JOE HUSTON: Yeah.
In a lot of ways, it's focusing to just
be able to spend most of your time on the cash pipeline.
And so on the finance side, my job
is to manage that entire pipeline from donor
to the first bank it hits in the US to the foreign exchange
transaction to get to Kenyan shillings or Rwandan francs,
the bank it sits there, and then the getting to the mobile money
provider and to the eventual recipient.
And so the problems there are to first,
make sure that that pipeline is as short as possible,
that money moves through the system incredibly quickly.
And so problems we're sort of working on
within that domain are things like how
do we project donations that we can keep field
operations running basically just behind them so
that the lag is very small?
Second, how do we manage that cash prudently,
make sure we're getting an interest where we should
and things like that?
And then third, making sure we're
managing fraud, on the internal side
with staff and things like that and externally
with mobile money providers, with local government
and things like that.
And so the integrity of the pipeline
is something I spend a lot of time on as well.
SPEAKER 1: Cool.
[INAUDIBLE] I'm actually going to set up the Dory.
Just one moment.
AUDIENCE: Yeah, I'll go.
Hey.
My question is about whether an organization like yours
pays a different amount than a giant multinational corporation
like Google does to change currencies?
It seems like something that's really important to the flow
of money in this organization.
And I wonder if there's an opportunity
for multinational corporations to help out
not just by matching employees donations,
but maybe to assist with currency exchange
in the currencies that they're already
exchanging in gigantic quantities on a very
frequent basis.
JOE HUSTON: Yeah, it's interesting.
The history of what we have paid has changed.
I think when we were first getting started,
we were pretty naive.
And so we were paying about a percent per transaction,
which would be extremely high for developed world currencies.
It's a little bit what you'd expect for the developing world
currencies we're trading in.
I think we've gotten better over time
at competing different banks against each other.
And so we have a US bank that quotes a rate.
But we also competed against certain different local banks.
And we've added different local banks over time
to impart offer competition there,
but also to offer credit risk hedges basically while we're
holding the cash there.
And so the total fees we're paying
have dropped a ton over time.
And so now we're only like a hair above 0%
or something like that.
That said, my guess is the Googles or something
like that are probably being a step more clever.
And so my guess is the same opportunities still
probably exist.
I don't know how the tool would work, the piggybacking
off the transfers.
But I bet there is something there in terms of, yeah,
trying to be more clever.
I think also as we've grown, we've become a bigger player.
And in these markets, it's certainly the day
we trade or something like that.
And so I think that's helped in us
getting better rates versus us getting first getting started.
AUDIENCE: Thank you.
SPEAKER 1: We can read from the first Dory question.
So what are the best reasons, in your view,
to be skeptical about basic income projects or policies?
JOE HUSTON: Yeah, I think my biggest one, especially as it
applies to the US or other places
where basic income feels politically far,
is that a UBI doesn't feel like a particularly useful North
Star.
That there is this sort of sense of a UBI as this Utopic policy.
And because of its elegance or simplicity,
there's a very good sense of what it should look like--
that it should be universal.
It should be basic, which you could debate the exact number,
but it's supposed to meet the basic needs.
And so I think almost because it has this clear template
for what you should do, in places where
that template would be politically pretty
hard to implement soon, it doesn't tell you
what the incremental policy should be to get there.
And so in the US, things that feel more tractable and maybe
then more exciting are things like expand the ITC
or have a child grant or something like that.
And I worry a little bit that the UBI and UBI pilots that,
including the directives that are
sort of testing the Utopic version
or the template version, aren't providing a lot of light
on how to get there or on the pilots that
should happen in the near-term on policies
that are more likely in the US.
I think for a lot of countries, a UBI
could feel closer politically--
India might be one example--
for which the conversation and the pilots focusing
on that template are actually pretty useful.
But in the US, I worry a lot about the distraction factor--
that we've cut away the wonk class who
care about poverty in the US and focus them
on a policy that feels far.
SPEAKER 1: Yeah.
And EITC is their earned income tax credit.
It's a very large cash transfer in the US.
Also note in the comments of this question,
there was a lot of discussion on inflation.
So there was a study that was recently
pursued from the Mexican cash transfer program.
I don't know if you want to talk about that.
But it seemed to find that there was not inflation.
JOE HUSTON: Yes.
SPEAKER 1: Or if you're familiar.
JOE HUSTON: Yeah, yeah.
And so Mexico was in that chart of the different cash transfer
programs.
They were one of the leading innovators
both in implementing a cash transfer
program in the developing world and in actually testing it.
And so the US had different types of cash support
before then.
But they were really forward thinking as a government
and working with academics to test
the effects of cash transfers.
And so they produced some of the early results
on just how cash transfers work on the individual level.
But then also a recent analysis of those programs
found that you don't see the kind of doomsday things
people are worried about in terms of a basic income
or in general expanding cash transfer programs in terms
of prices just going up a ton to totally offset
the value of the cash.
That's something that we've seen in a couple of other studies
done evaluating that question.
GiveDirectly's first study looked
at a kind of village level and didn't see any effect
on prices.
A thing we have in works that we don't have results
out is a study specifically designed to stress test that.
And so we used our one time grants
and randomized the concentration of GiveDirectly's enrollment
within a large region.
And so there were high concentration areas
and very low concentration areas.
And then as we delivered what was massive amounts of cash
in the region, researchers looked
at prices in local markets as well as
quantity of goods supplied, local taxes, and school fee
payments, these sorts of different kind of macro
or community level effects.
And so those are results I think we'll have out early next year
or so that I hope can contribute to that debate as well.
I think on the theory of it, a lot of the ways people
talk about inflation, the Econ model is too simple.
That they're sort of holding constant
how much can be supplied.
That a lot of times either big companies
can respond to increases in demand
by supplying more of the good.
Or oftentimes in the developing world, something you see
is the cash given increases the supply.
And so an example could be you would be worried
that you gave cash to an area.
And the area in general likes consuming fish.
And so the price of fish will go up.
But the piece that you're missing
is that often when people receive the cash,
they buy boats or fishing nets or coolers to be middlemen
between fishermen and markets.
And so actually this quantity of supply of fish
goes up as much or more.
And so I think the model people use to answer and think
about the inflation question has to not keep supply
fixed when debating that part.
AUDIENCE: Hello?
Can I ask a question?
AUDIENCE: Yes.
OK, sorry.
I would like to learn a little bit more about your UBI pilot
in Kenya, you said.
And I know we have already talked about UBI a little bit,
but I guess there's a reason behind GiveDirectly jumping
into basic income and you providing the service
to 12,000 people, I think.
And I'm always wondering how can you
get from those results you're getting from the UBI, which
is only paid to a fraction of people in the country,
then to a more universal aspect where all people would receive
it?
And what are you hoping to learn?
And do you have any results as of far?
JOE HUSTON: Yes.
And so when GiveDirectly was seeing the debate on UBI spike
up again over the last couple of years, the thing we saw it was
was a debate about how a particular type of cash
transfer works.
There is these questions on the pro side
that it would enable different types of risk taking
or entrepreneurship, help people live their lives better.
On the con side, people were worried
that people would stop working or spend it badly
or things like that.
And those questions are testable.
And so like other people's launching pilots,
we saw this was very much within our sweet spot
to implement a cash transfer program
and then work with researchers to test the results.
The basic structure we used was to design
to test what's unique about a UBI versus other cash transfer
programs.
And so in part to get at your--
a big piece of a UBI is that it's universal.
And so we randomized at the village level
with whole villages randomly assigned to receive cash
or not.
And then we also randomly assigned
some villages to receive cash for 12 years and some villages
to receive cash for two.
Because a scaled up version of a UBI
would be for your whole life.
But a lot of the pilots that have been done
and that are coming online are shorter term.
And so potential research question
you might have is can you extrapolate
to how the incentives would actually be for people if they
had that longer term security?
Again, on the pro side and the con side.
And so that full study just kicked off
a couple of weeks ago.
And so it'll be a little bit aways before we have results.
The first end lines and things like
that will be within the next year or so.
So it won't be 12 years.
But it will be a little bit of time.
That said, about a year ago, we started providing payments
in one kind of pilot village.
And so it got to sort of ask people what it's
like to receive a basic income.
And obviously that's totally anecdotal.
It shouldn't be confused with the RCT evidence.
But even that was pretty interesting.
I think if you ask people what it's
like, you see the things that are consistent with the broader
evidence.
People spend it in a ton of different ways
because they have different priorities.
You saw a lot of spending on food, especially elderly people
who couldn't work.
Different types of investments in people's job or businesses,
whether that's buying small amounts of capital for a shoe
business I saw.
People actually buying fishing nets.
It's an area right on the edge of Lake Victoria.
People investing in school fees.
Secondary school isn't free in Kenya.
Health and things like that.
Some of the unique things were--
we were worried on the operational perspective,
how people would perceive a UBI, a few different aspects
of that.
One of them is universality.
Even though the village we're working in
and the groups of villages we're working in
are in absolute terms all very, very poor,
there's still a different decent amount of income variation
within those villages.
And so in this particular one, the poorest people
had walls you could essentially see through.
And the whole house was made from organic materials-- mud
and thatch and things like that.
And the richest couple had a tractor.
And so that's a remarkable distance
in wealth and in income and things like that.
And so one thing we asked people was just how
do you feel that everyone's getting the same amount of cash
support?
Does it seem fair?
Should GiveDirectly, as we often do,
try to pick the poorest people in this village?
And people responded pretty uniformly
that they were like, we were glad you didn't try to meddle,
that you didn't try to pick who should receive.
And so was pretty interesting from a perceived fairness
perspective about a UBI and connects
to some of the debate people have about the stigmatization
of receiving benefits or things like that.
Another, again, qualitative thing we asked people about
was whether individually targeted payments were OK.
A kind of potential benefit of a UBI
is that it frees people in relationships
because each person has their own individual security.
And so if a relationship is abusive
or there's a bad power dynamic, somebody
could leave or at least be on a more level playing field.
The flip side, if you're a foreign organization,
is that it could look like you're
trying to break up families by insisting that each person has
their own cell phone and their own stream of payments.
And so we were worried that that would be perceived badly.
Again, the surprise was that basically everyone
said just the opposite, that individually targeted payments
let people prioritize whatever was their top priority
and made debates easier.
There was this sense of he has his money, and I have my money.
And we get to spend it on what we want.
And so there's not as much of a--
for the UBI payments, a shared pool that has to be
fought over.
And so that was pretty interesting as well.
AUDIENCE: Thank you.
SPEAKER 1: And yeah, some of the negative income tax experiments
in the 70s seemed at first to suggest
that divorce rates went up.
But subsequent analysis found that it didn't.
So it's interesting how this individually versus family
orientation isn't everything.
AUDIENCE: I wanted to learn a little bit more
about the evaluation of the cash transfer program.
So firstly, I wanted to know how long you
track people for after they've received the cash payment?
And then in terms of logistics and scaling
up, do you think that the evaluation model you have right
now could be then used by, say, a USAID or one
of the other big donors for evaluating?
JOE HUSTON: Yeah.
So it varies a lot by study.
And so different studies are targeted
towards different questions, which require a different time
horizon.
The basic template structure is first, external researchers.
And so academics at places like MIT or Harvard who are helping
design the study with us and external research surveying
organization.
And so it's not GiveDirectly staff
asking people about their consumption patterns.
It's different people from a different organization
who don't have a relationship with us.
It's important to pre-register the study.
Basically say, we're going to do this study.
Provide a pre-analysis plan, which says,
we're going to answer these questions that
help solve for cherry picking on the studies,
as in not holding back studies that
have bad results or no results, as well as cherry picking
on the analysis, not redoing the analysis again
and again until you get the results you want.
After that, in terms of the horizon,
again, that's varied a lot for us.
We have one study that is going to have something like 18 month
results out some early next year.
But it's sort of queued up to track people for a decade or so
in terms of the sample size and things like that.
Because GiveDirectly is younger, our ability
to have a super long horizon already done is harder.
In the existing literature, the longest follow up
is a paper in Uganda.
That was that $400 cash grant I mentioned to use.
And that's gone out to, I think, the eight year
mark and found persistent results.
And there's been a study in Sri Lanka that went out
to five years and found--
it was cash transfers to small business people--
and found at the five year mark markedly different earnings
even persisting to that level.
On terms of scale, in part, the program
we were doing with USAID is a good example of large funders
are still able to run those types
of randomized controlled trials.
In many ways, the big con about RCTs is that they're expensive.
You have to have giant samples.
You have to be able to fund things like research costs
and things like that.
And so in many ways, large funders
are best equipped to help implement them.
SPEAKER 1: A quick follow up on that.
So it seems like there have been some long term evaluations.
Have there been long term treatments in the same way
as that?
I mean, certainly not in the cash transfer spaces is
my understanding.
But are you aware of others?
JOE HUSTON: Right.
SPEAKER 1: The 12 years is pretty remarkable.
JOE HUSTON: Yeah.
And so I think the examples--
what I haven't seen as much of is long term evaluation paired
with long term treatment.
The long term treatments I've seen
are in places like Brazil and Mexico
that have been targeted towards families with young children
and provided conditional cash transfers to send
their children to school and followed families
for a long period as a result. And so getting
into that decade-long type time period.
And so I think we have seen examples of that.
I haven't seen the, personally, the evaluation
paired to check what is it like to receive cash for 12 years.
But I do think we have seen examples of that long term
treatment.
SPEAKER 1: I think we had a question on the [? EPC ?]
real quick.
Are you still there?
AUDIENCE: Yeah.
I'm still here.
I'm Krisna.
I was just wondering how does GiveDirectly
compare with basic education?
The only other thing that I found
having extraordinary effect is basic education.
And, of course, [INAUDIBLE] high school.
But how does it compare?
How should I think of giving to GiveDirectly
as giving for basic education?
JOE HUSTON: This is GiveDirectly versus a basic education.
Is that right?
AUDIENCE: Yeah, exactly.
Do any education charities working
for getting girls in school or things like that?
In developing countries, of course.
JOE HUSTON: Yeah.
And so I think the case for a basic education
in a country or something like that is very good.
And I think it's a good example of the type of public
good or public infrastructure that is hard for cash
to just replace.
And so in many ways, I think they're not competitive
and, in fact, are often complementary,
that a big thing we see people consume when we give people
cash are school fees to be able to go to school or school
uniforms or school supplies or solar lights
to light a home to do homework and things like that.
And so I think there's a lot of complements in this ecosystem.
That said, it's a giving opportunity.
I think, especially for nonprofits,
it's hard to be helpful providing a basic education.
And so I think it's a hard thing to do.
And so I don't know of a lot of really good
giving opportunities to directly support basic education,
even though I think it's a useful thing for our country
to provide and it's an important thing for a country to have.
It's similar to I think it's hard for nonprofits
to build bridges or to build hospitals.
That I think that those sorts of big lasting institutions you
want to exist in societies are hard to provide
through donated dollars.
And so as concepts, I think they're complementary
and both important.
And I think as giving opportunities,
the case for cash is a little bit better.
AUDIENCE: Thank you.
AUDIENCE: Hi.
So I'm curious how you guys think
about balancing your portfolio.
So both geographically, how do you
choose the locations you're going
to deploy the programs to, and then how
do you split between research programs and just funding
the programs you already know work pretty well?
I guess I'm also especially interested in the decision
to start the program in Houston, which
seems like an outlier in terms of how much money you
gave per person and also how much that money can buy.
So yeah, just how do you think about balancing
your overall portfolio?
JOE HUSTON: Yeah.
And so in general, our mission is not to--
we don't have an expand mission.
We don't have the goal of be in every country on Earth
or provide every structure of cash transfer.
We're pretty focused-- well, I'll
talk about this Houston and Puerto Rico thing.
But in general, we're pretty focused within East Africa.
And each addition of a country is targeted
towards a particular goal--
a research program that we think is
especially valuable or important for policy impact.
Against that kind of baseline, the way
we evaluate new projects is I think
a big potential value of cash transfers
is the indirect effects on the sector.
And there's a few different sectors,
whether it's providing research that's
especially useful for developing world governments in designing
their own cash transfer programs,
providing cash transfer structures that provide
benchmarks for aid programs that exist around the world,
or in general pushing on the debate
about how we should help people.
The Houston and Puerto Rico examples,
we debated a lot internally.
What we saw was basically an opportunity
to connect different conversations.
A weird thing that happens in conversations about giving
and especially about cash is they
can stay pretty disjointed.
And so the basic income conversation
can happen without referencing any of the papers
within the developing world about a lot of what we already
know about how cash transfers work.
And so there can be remarkable ignorance
about all of the things that have already been studied.
We can sort of throw up our hands
in Texas about how do we help people
without any of this sort of sense
of how helpful cash transfers can
be in that type of situation.
And so we sort of saw it as an opportunity to one, in part
provide a set of pipes to deliver cash
for donors who probably weren't going to give to East Africa
otherwise.
There were people who specifically wanted to give it
to Texas or to Puerto Rico.
And so we could provide that utility to enable that.
And then two, provide the cash alternative
in a new conversation that we hope will sort of carry over
into the broader conversation in aid
and in basic income or something like that.
And so the bet here, I think, is that we can sort of connect
conversations that are staying disparate
and that there isn't otherwise an allocation
from East Africa to Texas-- that there
are different giving pools.
And if that's the case, then it's
absolutely the case that there should
be some type of utility for people to give to Texas
and to help those people better than existing
opportunities had.
SPEAKER 1: We'll move back to the Dory.
This is a question I had, actually,
which was about the savings compacts that were reported
in this Fox article on the basic income experiment where people
pool up their payments and give it to a single person
so that they can engage in more capital intensive investments
or things like that.
It seems like that presents an opportunity
for financial institutions or other changes.
So curious to your thoughts on that.
JOE HUSTON: Yeah.
And so the quick slightly long explanation of what this is
is in this UBI pilot village where people were receiving
basic income payments, a thing people wanted to do
was purchase big things, bigger than what
their monthly check was.
And so they formed different types of groups
within the village and basically made a ledger of each person
every month contributes some portion
of their basic income payment.
And one person every month receives all of those payments.
And so it's a way to convert those stream
payments into semi-recurring lump sum ones instead.
In terms of financial institutions,
I think people do have access.
And so I think maybe the opportunity
is like a sales one.
And so M-Pesa is the mobile money provider in Kenya.
And it has a ton of different savings and loan
products built in.
You can have basically a savings account
on these feature phones, the same ones that have
Snake and things like that.
You can have a savings account.
You can draw a loan through your M-Pesa account.
Recently, they added the ability to buy government bonds, again,
through these mobile money accounts, which is pretty neat.
And so a question I have is whether or not
you'll start to see a take up of that
as the need or demand for these types of services persists.
And maybe he'll build comfort.
And then on the other side, there's
a sort of potential for better outreach and things like that
from financial institutions.
There are also small banks and micro-finance companies
in Kenya that I could see potentially moving in.
I haven't seen that happen much yet,
but I can totally buy that it could.
Yep.
SPEAKER 1: Would you guys be willing to,
I mean, you're sort of underwriting these things
at that point.
Is there a written guarantee of the stream?
JOE HUSTON: Right.
Yeah, it's interesting.
I don't know how to turn the GiveDirectly
promise into something you could lend off of
or something like that.
It's a verbal guarantee.
But maybe the sort of track record-- by year three
or something like that-- enables that.
I don't know.
SPEAKER 1: So I think we're just about out of time,
but one last question on the transfer efficiency
of the basic income experiment relative to cash transfers
and maybe long run expectations there.
JOE HUSTON: Yeah.
And so the different trade offs for the basic income experiment
are there are more payments.
And mobile money providers have a per payment fee.
And so there is more payments per value distributed.
And so mobile money fees are a little bit higher.
We have to have our call center running longer per recipient
because people are getting paid for two years.
And so there's higher follow up costs.
That said, the total value distributed
is higher per recipient than our typical $1,000 payments.
And the way that all nets is that the two-year arm
is much less efficient.
It's something like 75% or 80%.
The 12-year arm is much more efficient.
And the combination of those two, the weighted average
across those different arms is about in that 88%, 90% range.
The next question on efficiency was actually [? Harvey, ?]
which is pretty interesting.
And so we found the balance of costs are very different.
Labor is a lot more expensive to sign people up for cash
here than in East Africa.
But there is zero effects for us and payments are cheaper.
We're at the debit cards are basically
zero fees for us and for the recipients.
And so efficiency at the scale we'll be able to operate at
is a little bit higher than our typical program.
SPEAKER 1: Interesting.
Great.
Well, thank you so much for coming to Google.
JOE HUSTON: Yeah, thank you so much for having me.
[APPLAUSE]