Jan 4, 2011

Sometimes the most messy problems ‘beg’ for unconventional solutions. Paying poor people as a way of reducing poverty and income inequality defies any conventional logic. However, I am surprised with the results these programs have shown in Mexico, Brazil and about 40 other countries according to this article in the NYT.

For people at the bottom of the pyramid, it is hard to bootstrap themselves out of poverty. Almost all systems are designed to not work in their favor. Very few manage to escape their fate if at all, however hard they might work.

The idea of providing conditional relief, with payments tied to desirable activities such as education, improved health etc, ease the process of stepping out. I am surprised these programs have not received more publicity. I wonder if countries like India are practicing anything similar and whether it is even feasible at that scale.

The article strikes a rather disappointing note on the trends in income inequality in the US, though with the popular sentiment the way it is when it comes to social programs, I would not be surprised if things get worse before we pay attention.