No cure, no pay : the position of Dutch policy and Dutch non-state actors towards the UCT method

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No cure, just pay

The position of Dutch policy and Dutch

non-‐state actors towards the UCT method

Maarten Muijser (10674586)

Master thesis Political Science: International Relations Supervisor: Jeannette Mak

Second reader: Farid Boussaid University of Amsterdam

June 2015

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Abstract

This research analyses the position the Dutch government and Dutch non-‐state actors takes towards the implementation of unconditional cash transfer (UCT) programmes for sustainable poverty alleviation. A lot has already been achieved with traditional

development assistance programmes: poverty rates dropped, more children attended basic education and more people have access to safe drinking water (van leeuwen & van Leeuwen-‐li 2014; WHO 2015; Bourguignon & Morrisson 2002). But it remains difficult to reach out to all the poor. In particular in Sub-‐Saharan Africa, where the number of people living in poverty doubled since 1960. A new approach is needed to fight global poverty. UCT might be a new approach to reach the extreme poor that are inaccessible through the traditional methods and help them fight extreme poverty. A UCT method sustains the dignity of the poor, where this is often not of high importance in traditional methods. By means of content analysis of official policy documents of the Ministry of Foreign Affairs and an interview with the Policy and Operations Evaluation Department, an analysis of the position of the Dutch governments is made in this research. Interviews with the Red Cross and Oxfam Novib have been conducted, and implemented UCT

programmes of these non-‐state actors have been analysed to shed light on their position. No principled objections of the Dutch governments towards UCT programmes have been detected. Non-‐state actors have already used this method often in emergency situations and they are willing to adopt more UCT programmes in the future. More evidence on the effect of this method for sustainable poverty alleviation is needed to gain more scientific understanding about the long-‐term effects. Governments and non-‐state actors will then be more willing to implement this method.

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1. Introduction

Developed countries have spent more than $4,6 trillion on development aid since 1960 (Harvey 2012). Much has already been achieved with this support: poverty rates have dropped, more children have attended basic education and more people now have access to safe drinking water (van leeuwen & van Leeuwen-‐li 2014; WHO 2015; Bourguignon & Morrisson 2002). Although the overall numbers are promising, it remains difficult to reach all the poor. For example in sub-‐Saharan Africa, where the amount of people living in poverty has doubled since 1960 to 416 million people in 2011 (World Bank 2010; 2015). Although sixty per cent of the Dutch population thinks that development aid did not help developing countries, they still feel empathy for the poor and they still hope that development aid will have a positive influence on these people (Parool 2010). Many Western citizens felt strengthened in their scepticism when

Dambisa Moyo presented her book Dead aid: Why Aid is not Working and How There is a

Better Way For Africa (2009). She argues, just as the dependency theory did in the

1970s, that development aid makes African countries economically dependent and keeps these countries poor. The failure of African states is thus a direct effect of

development aid. She argues that development aid should be ended within 5 years time. Developing countries should focus on international bonds and insist on more free

market trade, microfinance and direct foreign investments. These countries should focus more on developing a strong economic trade relation rather than on developing an aid relation. This argument is in line with earlier development theories that focus on economic growth. Jeffrey Sachs, a big proponent of the Millennium Development Goals (MDGs). According to him, wealthy countries are morally obliged to support developing countries in their development by providing states with financial boosts. A lack of good governance is often seen as one of the indicators of extreme poverty in a country. According to Sachs, many African countries with good governance are still poor. He argues that the major problem is a lack of money to invest in infrastructure, education and skills. Sachs explains that many underdeveloped countries are stuck in a poverty trap: because of the extreme poverty in a country, they are not able to solve this problem themselves. Hunger, diseases, crises and lack of infrastructure obstruct economic development. The fast growing population affects the farm capacities. This argument fits in Rostow’s stages of growth, in which the country’s structure is limiting the growth. But Sachs argues that the traditional escape from poverty -‐high production

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of agricultural products-‐is not an option. Sachs thinks that development should be achieved through high investments and increasing flows of development aid to local governments and states. Trade reforms in developed countries should strengthen the economic position of poor countries (Sachs, et al 2004). Moyo and Sachs both want to help the developing countries, but they disagree on the method to help them. Sachs argues that the problem is found in the lack of money for developing countries to develop while Moyo states that we should stop sending development aid so that developing countries can develop in their own way.

Both methods of Sachs and Moyo are based on traditional perspectives of

development aid. William Easterly, a development economist, states that the traditional development approaches are undermining the individual rights and freedom of the people living in developing countries. He argues that a totally new approach needs to occur in order to fight global poverty. This new approach should respect the individual rights of the poor (Easterly 2014). This research tries to explore if UCT can become this new approach by combining the best of Sachs’ and Moyo’s arguments. A UCT is a cash grant to extreme poor without any conditions attached on how to spent this cash. UCT meets Sachs’ argument with increasing flows of development aid: developed countries will hand out money directly to the poor. On the other hand UCT meets Moyo’s

argument by giving the poor the possibility to make their own decisions on how to spend the grant. Because the recipients of a UCT can make their own choice on where, when and what to spend the grant, their dignity will be preserved. The rights of the poor will be respected and their individual freedom is maintained.

This research analyses what position Dutch non-‐state actors and the Dutch government hold towards the UCT method. Official policy documents of the Dutch ministry of Foreign Trade and Development Assistance are analysed to study the possibilities of the support of UCT by the government. Interviews have been conducted with the Red Cross and Oxfam Novib to explore the position non-‐state actors hold

towards UCT. After the introduction of this research, the concept of development assistance and a historical overview of development aid will be described in the second chapter. This chapter also elaborates on the effects and effectiveness of current

development aid programmes and policies. The third chapter involves a

conceptualisation of unconditional cash transfers and discusses its effects and critics. This chapter also compares the UCT method with traditional development approaches.

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The fourth chapter explains the applied method for this research and this is followed by the validation and reliability of the used data in the fifth chapter. The sixth chapter illustrates a historical overview of Dutch development aid since 1945. This chapter also gives an overview of the role of non-‐state actors in developing work. The seventh chapter will present the findings of this research by analysing the possible

implementation of UCT in current Dutch policies and the position non-‐state actors hold towards UCT. This research analyses the position of two non-‐state actors: Red Cross and Oxfam. The final chapter concludes the research and will give some points of discussion.

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2. Development assistance

Since the Second World War, the global economy has grown immensely. The total world Gross Domestic Product (GDP) has rise from 1950 to 2000 with more than 900% (Long 1998). When this is seen in the perspective of the growing population, the GDP per capita in the same time span rose with 300%. This economic growth differed greatly per region. Western Europe’s average GDP per capita increased with 328% while East Asia’s average increased 732%. Sub-‐Saharan Africa had, with only 30%, the lowest average increase of GDP per capita (Bolt, Timmer & van Zanden 2014). These numbers show a growing economic inequality between different regions in the world, especially between European countries, East Asian countries and countries in Sub-‐Saharan Africa. This global inequality has grown over the last 50 years. According to the GINI Index, which is the most used method to represent worldwide income inequality from 0 (lowest) to 1 (highest), global inequality was 0.64 in 1950, and increased to 0.71 in 2002 (Ortiz & Cummins 2011 p. 20).

With the explosive economic growth, the developed countries also increased their total spending on development in underdeveloped countries. The billions of dollars spent on development aid rose extensively from an annual budget of $4 billion in 1960 to $133 billion in 2012. One third of the total development aid ($46 billion) went to assistance of development of Sub-‐Saharan Africa (World Bank 2014). The major donor members of the Organisation for Economic Co-‐operation and Development (OECD),

0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 -‐ 25 000 50 000 75 000 100 000 125 000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Pe r c en t O D A of G N I ODA

in million U

SD

ODA Net Per Cent of GNI

Graph 1.

Ne#o Oﬃcial Development Assistance from Development Assistance Commi#ee to Donor Countries in USD millions and per cent of GNI from 1960 -‐ 2013 (OECD 2015)

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except Switzerland and the United States, agreed in 1970 to spend 0,7% of the donors Gross National Income (GNI) on Official Development Aid (ODA). Only a few countries officially reached that percentage: Sweden, the Netherlands, Norway, Denmark, Finland and Luxembourg. The weighted average spend on ODA by the major donor members of the OECD in 2013 was 0,3% of their GNI (OECD 2015). Graph 1 illustrates the growth of the total amount of millions spend on ODA and the percentage spent on ODA of GNI by the developed countries from 1960 till 2013.

This chapter will begin with the conceptualisation of development, in which different perspectives of development will be discussed and different concepts will be examined. Hereafter, an outline of the historical overview of development aid will be described. This overview starts with the development aid after the Second World War. Secondly, it will discuss the dependency theory that was leading in the 1960s and its development into the neoliberal and human view in the 1980s. This overview moves on to the to the current situation, with a special focus on the Millennium Development Goals. This chapter ends with a discussion of the effects of development aid and the debate on the effectiveness.

2.1 Conceptualisation of development

As the concepts of development always “reflect a particular set of social and political values”, it is important to describe the different meanings of these concepts over the course of time (Thomas & Evans 2011 p 463). The different meanings of development in this historical context always need to be seen in an ideological framework.

2.1.1 Views on development

In the orthodox view, development stands equal to economic growth. A transition from the traditional agricultural economy -‐where production meets local needs-‐ into an industrial economy -‐focused on production for profits-‐ is required to achieve developmental growth. The orthodox view assumes that there are unlimited possibilities for economic growth in a free market system. Argued is that economic growth will create wealth and this will “trickle-‐down to those at the bottom” (Thomas & Evans 2011 p 463). In this view, there is not much focus on social aspects such as

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view. In his ‘stages of growth’ he identifies five categorical economic dimensions of societies (Rostow 1990):

1. ‘The traditional society’, in which the structure is limiting growth, cause of low-‐ productivity and limited technology;

2. ‘The preconditions for take-‐off’, where the society is in the progress of a transition to more productivity and increasing investments, technologies and social values;

3. ‘The take-‐off’, in which traditional economic growth is transformed into modern growth with a rapid expansion of new industries, techniques and methods for production;

4. ‘The drive to maturity’, where the use of modern technology is extended and capacities are applied more efficiently;

5. ‘The age of high-‐mass consumption’, in this final stage durable consumer goods and services are produced and high-‐value products are consumed.

Although developing countries achieved an increase of economic growth, the trickle-‐ down effect did not work, as this growth did not reach the poor. While major parts of societies remained poor, only a minority became wealthier (Thomas & Evans 2011 p 466). As a reaction to this failure, new, critical and alternative views on development arose. These critical views mostly argue that globalisation and the liberalisation of economies have resulted in economic inequality. These views are more focused on equal distribution of wealth and other gains within a society. Sustainable development with a focus on issues such as health, education, human rights and the environment are

important in these critical views.

2.1.2 Concepts of development

Development aid, humanitarian aid, development assistance and development co-‐ operation are often used to address the same concept. This research will distinguish between different definitions for these concepts.

Development aid, or Official Development Assistance (ODA), is defined by the OECD as “flows to countries and territories […] and to multilateral institutions, which are provided by official agencies and is administered with the promotion of the

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2003). Aid spent on military, peacekeeping missions, civil police work, cultural

programmes, assistance to refugees, research, nuclear energy and anti-‐terrorism are not included in this definition. In other words, aid can be defined as money spent by an official governmental organisation in another country or to a multilateral institution on the economic development and welfare. But the official OECD definition has its flaws. The role of non-‐state actors is not covered, neither is aid spent on healthcare, climate change or human rights. The Dutch government has been focussing on poverty

alleviation during the last decades in its development policy. This aid is not included in this definition. The Netherlands contributed 5,7 billon euros to the development of undeveloped countries in 2012, while only 4,3 billion euro was identified as ODA (Tweede Kamer 2013-‐2014, 32605-‐137). In this research, development aid is used to describe the transfer of money, commodities or services from the government of a country to stimulate (economic or social) development in an underdeveloped country.

Most of the time when people talk about development aid, they commonly mean development assistance or development co-‐operation. These two concepts are similar to each other and will be used in this research to indicate the same issue. Development assistance, or development co-‐operation, is defined by the World Health Organisation (WHO) as “the international transfer of public funds in the form of loans or grants, […] from one government to another (bilateral aid), or […] by nongovernmental

organisations or via multilateral agency (multilateral aid)” (WHO 2015). In this

research, private sector initiatives from civilians, schools, hospitals, business companies or others, are also included in the definition of development assistance and co-‐

operation.

Humanitarian aid, or assistance, is the support of groups, individuals or countries after the occurrence of an emergency. Humanitarian aid is usually a short-‐term

assistance in order to save lives or reduce human suffering after a crisis has occurred. After the earthquake in Nepal of April 2015, governments, non-‐state actors and individuals deployed humanitarian assistance to the local communities. The Dutch government, for example, send the Dutch Urban Search and Rescue team (USAR), a group of 62 experts and eight dogs, to help in the search of victims of the earthquake. As this was humanitarian assistance, this operation only lasted for 10 days. But

humanitarian aid can also be executed over a long-‐term period. After the earthquake in Haiti in 2010, Dutch non-‐state actors conducted relief to the people and communities in

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need. Due to an ineffective government, disease outbreak, debris and safety the humanitarian aid lasted five years (Samenwerkende Hulp Organisaties 2011). To conclude, humanitarian assistance is “aid and action designed to save lives, alleviate suffering and maintain and protect human dignity during and in the aftermath of man-‐ made crises and natural disasters, as well as to prevent and strengthen preparedness for the occurrence of such situations” (Global Humanitarian Assistance 2015).

As described above, different actors contribute to the development of underdeveloped countries. Next to the donor government, receiving government, international institutions and private donors, non-‐state actors are active in executing development assistance. Non-‐state actors can work for profit or non-‐profit purposes. It can be an interest group, but also a civil society organisation, non-‐governmental

organisation or social movement. A non-‐state actor can even be a political party, business company or a multinational. In this research, the concepts of non-‐state actor, civil society organisation (CSO) and non-‐governmental organisation (NGO) are used. It is hard to define these concepts, as they are seldom used consistently A non-‐state actor or non-‐governmental organisation is logically an actor that is not in control of the

state/government, but they are mostly identified as actors that work on the

improvement of human rights, environmental issues or work in the development area. These are the same areas in which civil society organisations are active (Bieler, Higgott, & Underhill 2000). Although there are minor differences between these concepts, this research will use non-‐state actor, non-‐governmental organisation and civil society organisation to address “private organisations that pursue activities to relieve the suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development” (Operations Evaluation Department 2002).

In the next paragraph the historical context of development aid will be described. It is important to understand its historical development in order to be able to give recommendations on its policy.

2.2 Historical overview of global development assistance

The first forms of foreign aid started in the beginning of the 18th_{century.
Prussian}

officials subsidised their allies’ militaries to strengthen their own position. Foreign aid as development assistance began in the 20th_{century,
after
the
Second
World
War
and}

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when the de-‐colonisation of countries in Africa, Asia and Latin America had started. In the next decades, development thinking is highly influenced by globalisation. Due to globalisation, development was no longer a national issue, but became internationally orientated. International institutions, non-‐state actors and market forces have shaped the global world (Nederveen Pieterse 2010). Development thinking is also influenced by different theories, as shown in table 1. To understand current policies on development cooperation, it is important to realise where its historical roots come from. The different developments and theories of development thinking are further discussed in the next paragraphs.

Table 1.

Meaning of development over time (adapted from Nederveen Pieterse 2010)

Period Perspective Meaning of development

1800s Classical political economy Economic growth 1850s > Colonial economics Resource management

1950s > Modernization Theory Growth, political and social modernization 1960s > Dependency theory Development of underdevelopment

1980s > Neoliberalism Economic growth by structural reforms, privatization and deregulation

1980s > Human development Poverty, health, education and equality 2000s > Millennium Development Goals Social improvements

2.2.1 1945: The beginning of official development assistance

Official development aid started after the Second World War. The establishment of the United Nations, along with the World Bank and IMF, was the start of development assistance in the form of financial assistance. These institutions were set up to help reconstruct Japan and the European countries that were damage by the Second World War. After the establishment of these institutions, the United States started to help rehabilitate the European economy and restore production, stability and trade with the Marshall Plan. The Marshall Plan distributed a total of 1$3 billion over a period of 4 years to 16 countries in Europe. The Marshall Plan was successful: it had a direct effect on the reconstruction of Europe and had an indirect effect because of policy changes.

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The direct effect of the Marshall Plan was economic growth. Crafts suggest that this is partly because “there was a favourable institutional and policy environment with reasonably competent governments that could implement reforms and use the fund effectively” (Craft 2011 p 6). Although these conditions were part of the success of the Marshall Plan, Craft also argues that these effects might not be replicated in other countries in different situations and times. The Marshall Plan is seen as a structural adjustment program, as it demand policy change in exchange for aid. The indirect effects of the Marshall Plan are found in these conditions. The conditions that were embedded by the United States of America (U.S.) for receiving aid of the Marshall Plan were the following (Crafts 2011):

1. Receiving countries had to commit to trade liberalization;

2. U.S. permission was needed for the use of the fund, which gave the U.S. power in domestic decisions;

3. The U.S. demanded a reduce of trade barriers and profitable policy on U.S export products;

In the same period, colonies in Africa, Asia and Latin America declared

independency, sometimes after a big struggle with their western colonial power. The former colonies were officially able to become politically and economically independent after their dominant colonial powers had withdrawn. Former colonial powers still had a lot of power over their former colonies, as the economic relation was still very strong. Capital and manufactured goods were exported to colonies in return for raw materials (Aid Watch 2008). Countries with a great amount of natural resources, such as oil, have experienced great benefits from these trade relations. For example, the profits Nigeria gained through the export of oil to former western colonial powers. The relation

between former colonial powers and its former colonies was not only trade related. The relation moved to assistance programs in the form of aid to the underdeveloped

countries. With these programs the former colonial powers provided aid in forms of money to their former colonies. These development aid programmes were directly sent to the, relatively new, governments. It was intended that this aid would be invested in improvements of the infrastructure. The idea of that time was that good infrastructure was the beginning of economic and social development. Although these money transfers were never enough to fully develop a strong economy, most of the money was lost in

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corruption. The money therefore mostly benefitted the elite, which made the political rulers richer and more powerful. This improved the relation between the former colonial power and the political elite that was in power of the former colony.

Development aid was therefore a way of the colonial powers to support former colonies and remain little power (Williams 2014).

Next to the independency of former colonies, development thinking was highly influenced by the Cold War. The Soviet Union and the U.S. used aid to punish or reward a state in its diplomatic choices. Aid was therefore used to gain political influence during the Cold War. Especially underdeveloped countries were seen as possible allies and therefore received assistance and aid. These countries were seen as a “monolithic block with common features, problems and opportunities” (Bieckmann & Muskens 2012 p 777). The question why some areas did not develop as well as others was not raised, as this was not the main goal of the aid. Again, Nigeria benefitted from the Cold War by trading its raw materials, especially oil, with the U.S.

In this period the ideas of the Modernization Theory were leading in analysing opportunities for underdeveloped country to gain economic development (Hönke & Lederer 2013). The main idea was that poor countries did not reach the same level of modernity, because of bad governance, poor quality of education and low production (Bieckmann & Muskens 2012). The focus was on the improvement of the economic situation, which would automatically be followed by social development. This worked very well for European countries in which industrial and social development thrived after the Marshall Plan. But this theory did not apply to the situation in other countries around the globe. The success of European countries increased the global inequality between the West (Europe and the United States) and countries in Africa, Asia and Latin America.

2.2.2. 1960: Dependency theory and microfinance

In the 1960s, the Dependency theory became a more common known theory. The main idea of this theory is not about economic growth, but about unequal exchange between the industrial developed countries in the centre and agrarian countries in the periphery. This theory describes that this unequal exchange leads to higher profits for the centralized industrial countries at the expense of the agrarian periphery. It is about the ‘development of underdevelopment’ (Nederveen Pieterse 2010). The history of

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colonization and the dominance of the North over the South are important factors of the Dependency theory. The North is hereby not meant as a geographic order, but more as a conceptual terminology. In the North, the wages and investments in industrial

companies became higher, while the wages and investments in the South remained low (Conway & Heynen 2013).

In reaction to these developments, microfinance became a more commonly used method in the development sector in the 1970s. Although this method is used since the 18th_{century,
its
use
to
achieve
development
has
a
relatively
short
history.
Microfinances}

provide “micro-‐financial services in very small amounts mainly to the poor who are often without any belongings” (Srnec & Svobodová 2009 p 467). In the developing world microfinance is used to empower a bottom-‐up movement. Financial support is given with a strong social feeling and mostly to alleviate poverty. A stable economic

environment, with a liberal private sector and a stable exchange rate, are necessary to successfully implement a microfinance programme.

2.2.3 1980: The influence of international organisations

In the 1980s, the perspective of development was highly influenced by two main ideas of that time. Institutions as the IMF and World Bank influenced one of these main ideas. The perspective was that a growing economy with a strong market and a focus on trade and expanding private companies should encourage development These institutions used structural adjustment programs to reform economies as a condition for receiving a loan. Those neoliberal reforms were pro-‐market and focused on reducing the influence of the state by privatisation and deregulation policies. The approach shifted from a support of governments to a more market-‐led approach. (Overton 2012 & Bieckmann & Muskens 2012)

As a reaction to this market-‐led approach, many questions about this model arose. Not all governments appeared to be able to deliver the basic services to there civilians. Organisations such as the United Nation changed the overall view of development into a more human view. This human development focused on social values such as education, income equality, health and gender. Poverty, infant mortality and life expectancy became the main targets of these development institutions

(Bieckmann & Muskens 2012). An increasing number of non-‐state actors became active in this area. A historical overview of non-‐state actors in the developing area is further

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described in chapter 6.2. The focus on basic services for the poor also changed the view on development of the World Bank, which started to explicitly focus on poverty

alleviation. As a result of this shift, the Millennium Development Goals were formulated. (Overton 2012)

2.2.4 2000: Development in the new millennium

In the 1990s the negotiations on the establishment of the Millennium Development Goals began. The agreement on these goals was established in 2000, in which all 189 UN member states and 23 international organisations agreed to help achieve these goals by 2015. The focus of the MDGs is non-‐economic but is concerned with social

improvements on poverty, education, gender, and health. The following eight Millennium Development Goals are set to achieve in 2015:

1. Halve extreme poverty and hunger; 2. Achieve universal primary education;

3. Promote gender equality and empower women; 4. Reduce child mortality;

5. Improve maternal health;

6. Combat HIV/Aids, malaria and other diseases; 7. Ensure environmental sustainability;

8. Promote global partnership for development.

These MDGs have been the main focus of international development aid of the last 15 years. The goal to halve extreme poverty and hunger (MDG 1) is met. This is especially due to a major cut back of extreme poverty in China. Without the results of China, this MDG would not have been met yet (Chen & Ravallion 2004). Major progress is achieved on ensuring environmental sustainability (MDG 7) and reducing HIV/Aids, malaria and other diseases (MDG 6). The goals to achieve universal education (MDG 2), gender equality (MDG 3) and improving maternal health (MDG 5) have not been met yet. The United Nations has started discussions and meetings about the new goals for the post-‐ 2015 development aid policy agenda (De Bruijn 2015).

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2.3 Effects and effectiveness

While the world economy increased, the global share of people living in poverty decreased. The worldwide share of people living in absolute poverty (living with less than $1.25 a day) reduced from 55% in 1950 to 24% in 1992 (Bourguignon & Morrisson 2002). This is especially due to the major decrease in share of people living in absolute poverty in East and South Asia. China had the biggest decrease; in 1950 still 53% of the population was extremely poor, while that number was only 8% in 2001 (Chen &

Ravallion 2004). But poverty does not only imply economic or income related variables. The World Bank states that poverty also implies a lack of access to: (1) good health, (2) education systems, (3) electricity, (4) clean water, (5) sanitation and (6) other critical services that provide poor opportunities and capacities to gain one’s life (World Bank 2014). A lot of these indicators are made into Millennium Development Goals. For example access to education: MDG 2.A states: ‘ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling’ (United Nations 2014). The average share of the population that attained basic education rose from 49% in 1950 to 79% in 2000. The share of the population that attained basic education differs greatly on a global scale. While in Europe 91% attained basic education in 1950 and this number was 100% in 2000, in East Asia it raised from 46% in 1950 to 90% in 2000. Again Sub-‐Saharan Africa scored the lowest numbers, although it rose from 13% in 1950 to 58% in 2000 (van leeuwen & van Leeuwen-‐li 2014). Also access to clean drinking water is one of the MDG (MDG 7.C). This MDG was met in 2012, when 90% of the world population had access to an improved source of drinking water, while this was 76% in 1990 (WHO 2015). Access to good healthcare is one of the indicators of poverty according to the World Bank. A couple of MDGs have healthcare indicators included, such as ‘reducing child mortality’ (MDG 4.A) and ‘universal access to reproductive health’ (MDG 5.B) (United Nations 2014).

Much has been achieved already: poverty rates dropped, more children attained basic education and more people have access to safe drinking water. The overall

numbers are promising, but it remains hard to reach all the poor. Although the total billions spent on development aid extensively rose from $4 to $133 billion in 50 years, global inequality has grown too. Especially the inequality between the western countries (like Europa and the U.S.) and Sub-‐Saharan African. The total millions of people living in poverty dropped globally, but it doubled in the Sub-‐Saharan Africa from 210 million

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people in 1960 to 416 million people in 2011 (World Bank 2010; 2015). As it is hard to reach all the poor, a new approach to alleviating poverty is required. The possibility of unconditional cash transfer as this new method will be studied in this research. Before analysing the Dutch policies and the position of non-‐state actors towards UCT, this method will first be further examined.

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3. Cash transfers

Where the state fails to take its responsibility for its citizens in emergency situations, non-‐state actors arise to help those in need. Traditionally, non-‐state actors provide people with specific items that they have lost and which are highly needed. Cash transfer is a commonly used method in emergency situations to provide the basic needs for food, income and to stimulate consumption and productivity in disaster situations. When essential items are available, but there is a lack of cash in the effected population, cash transfers allow the people in need to buy the items they need. They can buy goods of their own choice in local markets and service providers. This provides an income for the effected population and stimulates the local economy, productivity and employment (International Committee of Red Cross 2007). New experimental studies used cash transfers not just to look at the effects in a humanitarian crisis, but at the effect on

sustainable poverty alleviation of the extreme poor. In the next paragraphs, the concepts of conditional and unconditional cash transfers are being described. Followed by a description of the effects of unconditional cash transfers and methods that are being used. This chapter will end with a comparison between UCT and traditional aid flows. 3.1 Conceptualisation

There are different types of cash transfers possible. Cash transfers can be one-‐time or repeated over time; it can be granted to everyone or just to a targeted group; it can be implemented alone, in partnership with local governments or by governments

themselves; it can be a cash grant or a voucher and can come with or without conditions on how the money should be spend.

When the condition to spend the received cash is “for providing a service of some kind (such as work); on using a service such as attending a school or health clinic; or spending the transfer on an agreed commodity or type of commodity, such a shelter or restarting a business” (International Committee of Red Cross 2007), it is called a

conditional cash transfer (CCS). Cash for work is the most common CCS. But CCS can also include cash for shelter, cash in nutrition programmes or cash for health programmes (ECHO 2013). Cash transfers can also come without conditions attached to it and are also known as cash without associated activities. When the most vulnerable receive a cash transfer with the main goal to “eradicate poverty, provide social protection or reduce economic vulnerability” without having to do any specific activity and without

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further conditions attached on how it should be spend, they are called unconditional cash transfers (UCT) (International Committee of Red Cross 2007). This does not mean that a UCT is not restricted on who will receive the transfer, but is unrestricted on how the receiver wants spend it. Unconditional cash transfers can be implemented

individually by a non-‐state actor, in a cooperation between a non-‐state actor and a local governmental agency or by governments themselves. Governmentally organised UCT is also known as (unconditional) basic income. Attempts to implement this system have already taken place in Mauritius, Mozambique, Namibia and South Africa (Standing 2008). A referendum on implementing an governmentally unconditional basic income in Switzerland is being planned (Foulkes 2013). Some Dutch political parties are

proponents of experiments with basic income in the Netherlands, and even a couple of experiments will be executed in the next couple of years (Brans 2015). Attempts in these countries have shown that an unconditional basic income would enhance full freedom for all the citizens, strengthen the bargaining position of disadvantaged groups, remove the poverty trap and boost the local economy (Standing 2008). The biggest difference between the unconditional basic income and social security benefits that are common in western countries is that the basic income is equal for everybody. Every citizen will receive a monthly payment that is enough to fully participate in the society. It does not have any conditions on work or level of income. Although this is a form of UCT, the focus of this research will be on the implementation of UCT in policies of development aid from western countries, and not on the adoption of UCT by developing countries.

Cash transfers can have different kind of mechanisms, which have a variety in effect, opportunities and approach. The chosen mechanism depends on a couple of preferences or on the situation. An economic situation where the market can supply the needs of the recipients is very important. Also the national regulation on cash transfer is of high importance. While handing out the grant, the security of the people should be guaranteed as much as possible. Before conducting a UCT programme, it is very important to analyse the situation in the area of implementation. Implementing a UCT should go through the available financial mechanisms. The different mechanics of cash transfers are (ECHO 2013):

o Direct cash-‐in-‐hand;

o Cash via money transfer agents; o Bank accounts;

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o Mobile banking system;

o Smart cards (pre-‐loaded cards); o Cheques;

o Fairs;

o Mobile money transfers (via SMS). 3.2 Unconditional cash transfers

Non-‐state organised UCT for poverty alleviation is relatively new in the development aid industry. The Guardian said that experiments with non-‐state organised UCT “sent

shockwaves through the charity sector” (Provost 2013). New experimental studies used the method of unconditional cash transfers to look at the effect on poverty of the

extreme poor. GiveDirectly is the only known non-‐state actor that exclusively uses UCT for poverty alleviation. This non-‐state actor aims to ‘reshape international giving’. GiveDirectly has projects in Kenya and Uganda, and delivered for a total of 6.6 million dollars unconditional cash transfers in 2014. Private donors, such as Google and

GiveWell, support their fundraising. In 2013, they received 5.5 million dollars from 6195 funders. When the poorest people are located, they receive a one-‐time cash transfer that equals a one-‐year’s budget for a typical household. In earlier programmes, 503

households in rural villages in Kenya received an unconditional cash transfer, while 505 households in the same villages functioned as control group. This control group did not receive any cash transfer, and are used to compare their living standards with those of the recipients. This GiveDirectly project resulted in an increase of 34% on earnings and 52% in assets. They also measured a reduction of 42% of children going to bed without food. But not all indicators of poverty were affected: little or no impact was measured on health or education. Neither was any effect found on the groups that did not receive a grant or on the cohesion within the community (Haushofer & Shapiro, 2013).

3.2.1 Effects and critics

As mentioned earlier, poverty includes a set of implications: the lack of access to health, education, clean water and sanitation and the opportunity to gain one’s life.

When looking at one of the implications of poverty, access to health systems, scholars found positive effects of UCT with experimental researches. Agüero, Carter & Woolard (2006) researched the effect of state-‐organised unconditional Child Support Grants in South Africa. The monthly grant of 180 Rand (or 13 euro) was given to the