GiveDirectly Unconditional Cash Transfers
GiveDirectly / MIT / Princeton · Western Kenya · 2011
Summary
GiveDirectly's Kenya experiment directly challenged the assumption that poor people cannot be trusted with unrestricted cash. Recipients invested primarily in durable assets (livestock, housing), generated returns through income diversification, showed improved psychological well-being, and did not increase spending on alcohol or tobacco. The results challenged the dominant model of in-kind aid transfers and sparked a global debate about whether direct cash is more effective than most targeted programs. Three-year follow-up found effects sustained.
Research question
"Do large unconditional cash transfers to extremely poor households produce lasting improvements in income and well-being?"
Methodology
Intervention
Lump-sum transfers of ~$1,000 USD (roughly annual household income) to randomly selected extremely poor households, with no conditions
Assignment
Randomized controlled trial (household)
Sample size
1,008 households across 60 villages
Primary outcome
Assets, earnings, food security, psychological well-being
Effect estimate
Assets: +58%; earnings: +38%; food security: +20%; psychological well-being significantly improved; no evidence of alcohol or tobacco spending increase; effects sustained 3 years later
Decision
GiveDirectly scaled to millions of transfers; research model replicated in multiple African countries; influenced Kenya and Zambia national cash transfer programs
Result
Positive
Assets: +58%; earnings: +38%; food security: +20%; psychological well-being significantly improved; no evidence of alcohol or tobacco spending increase; effects sustained 3 years later
Evidence strength
Strong
Randomized trial, replicated across multiple sites or studies.
Replication status
Replicated
Institution
GiveDirectly / MIT / Princeton
Location
Western Kenya
Year
2011
Policy area
Cash Transfers
Mechanism
Cash transfer