Report of June 28, 2013
In development aid, the idea of giving money to the poor with no strings attached received great attention during the last decade. Recently, the media took more and more interest in this topic, which Nathan Fiala from DIW Berlin is also working on. His case study on small Ugandan businesses was mentioned several times in the media. The Economist, for example, published an article called “Pennies from Heaven”, introducing that topic to a wider audience outside academia mentioning Fiala’s findings. The News Agency Reuters reported on Nathan Fiala's case study in its article "When loans beat grants". Different funding methods and their efficiency are discussed based on Fiala's study of small business owners in Uganda. Furthermore, The New York Times featured an interview with Christopher Blattman of Columbia University on the issue of ending poverty by giving money with no strings attached. The findings of Prof. Blattman are based on research of a Ugandan study he conducted together with Nathan Fiala of the Development and Security Department at the German Institute for Economic Research (DIW Berlin) and Sebastian Martinez of the Inter-American Development Bank. Interestingly, and contrary to the view of most development experts, giving money with no strings attached can help to alleviate poverty in some cases. By giving people money without any obligations they are able to start making money on their own. For the full study click here (PDF, 4.08 MB). And for an overview click here (PDF, 0.66 MB).