‘Universal Basic Income’ (UBI) or otherwise known as the ‘Citizens Basic Income’ (CBI).
UBI or CBI is an unconditional, regular cash income paid to all individuals, with no required work. This development theory is to give people opportunities to self-determination
There are several different countries who have tested and researched this development theory, and have suggested a multitude of different ways to fund the programs. However, researchers more often than not describe a reallocation of funding, which may previously have been allocated to a arguably less-efficient development project.
The research and implementation of the UBI or CBI in LDC presents both positive and negative outcomes for closing the gap of inequality, addressing poverty reduction policies and, most importantly, the collections of people involved. As mentioned by Banerjee, Niehaus and Suri (2019) the discussion around the positive and negative effects of the UBI comes down to one simple question: “…asking whether we should be trying to raise the incomes of the poor…”.
The negative effects of implementing the UBI in LDC, as discussed by Banerjee, Niehaus and Suri (2019) include; that it is an unlikely cost-effective way to achieve any particular, narrow policy goal, and conservatives’ stances that giving people money risks making them lazy. Banerjee, Niehaus and Suri (2019) present a conclusion from the Iran’s universal cash transfer scheme in 2011, that the transfers reduced the labor supply of the poor. The other negative aspect of implementing the UBI in LDC suggests that it is not a directed response to policy makers concerns, as it is hard to narrow down the policies in which it works towards and addresses.
Positive effects of implementing the UBI and CBI in LDC were outlined by both Matarazzo Suplicy (2007) & Banerjee, Niehaus and Suri (2019). A selection of the positive affects discussed by Matarazzo Suplicy (2007) included; increase access to education, health and entrepreneurship, closing the gap of the “extremely unequal” income distribution, reducing unemployment and poverty traps by ending economic dependency, removing the incentive for workers to not register with employers, supporting human dignity and freedom of virtue, and the elimination of bureaucracy and stigma between people receiving the CBI. Matarazzo Suplicy (2007) stated that the implementation of the CBI caused an “…inalienable right to participate in the nation’s wealth.”.
The positive affects discovered by Banerjee, Niehaus and Suris’ (2019) research saw an increase in financial inclusion, housing and sanitation, nutrition and diet, health, education, income and assets.
It is evident through both articles that positive outcomes are abundant.
In conclusion, the research concerning the implementation of the UBI in LDC offers that it indeed may be difficult to implement globally. However, in presenting this argument it explored the positive outcomes already found for those groups who have been granted a UBI or CBI in the past, which I think is the most beneficial outcome of this research so far. Therefore, I learnt that there are certainly negative and positive impacts in the implementation of the UBI or CBI in LDC, however, in the studies discussed, the number of positive outcomes certainly outweighed the negative.
References:
Banerjee A, Niehaus P & Suri T 2019, ‘Universal Basic Income in the Developing World’, Annual Review of Economics, vol. 11, pp. 1-23.
Matarazzo Suplicy, E 2007, ‘Basic Income and Employment in Brazil’, Basic Income Studies, vol. 2, no. 1.
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