Cash Transfer Experiments in Kenya

How charity GiveDirectly's unconditional cash transfers in Kenya became landmark experiments, including a universal basic income study, and what they found.

Kenya has hosted some of the world’s most important cash transfer experiments.

GiveDirectly

A charity founded in 2009 that sends unconditional cash to poor households by M-Pesa.
Recipients decide how to spend the money.

Findings

A study by economists including Johannes Haushofer and Jeremy Shapiro found recipients invested in assets like metal roofs and livestock, and improved well-being.
Spending on alcohol and tobacco did not increase.

Local economy effects

A study by Egger, Haushofer, Miguel and others (2022) found each dollar of cash transfers generated around 2.5 dollars in local economic activity, with little inflation, a multiplier effect.

Universal basic income

GiveDirectly launched a long-term UBI study in Kenya in 2017, giving some villages monthly payments for 12 years. Early results found positive effects on businesses and well-being.

Influence

These findings shaped global debates on aid and cash transfers.

The metal roof

A family receives a lump-sum transfer by M-Pesa and replaces its thatched roof with metal sheets, saving on repairs for years.

Thinking poor people waste cash transfers

Studies found recipients invested in assets, not alcohol.

Key takeaways

GiveDirectly sends unconditional cash via M-Pesa.
Recipients invested in assets; alcohol spending didn't rise.
Each dollar generated about 2.5 dollars locally.
A 12-year UBI study began in 2017.