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Transforming the Fight Against Poverty in India - The New York Times
"Transferring cash to poor families, on the condition that their kids attend school and get vaccinations, has been shown to be an effective way to reduce poverty and improve human health and well-being. Latin America is widely recognized as the pioneer of large-scale conditional transfer programs, starting with Mexico in the late 1990s and expanding across Brazil over the past decade.

Now these programs have the potential for making a serious dent in poverty in India. Under the acronym JAM — Jan Dhan, Aadhaar, Mobile — a quiet revolution of social welfare policy is unfolding. Jan Dhan is Prime Minister Narendra Modi’s flagship program to give poor people access to financial services, including bank accounts, credit and insurance. Aadhaar is the initiative to issue unique biometric identification cards to all Indians. Together with mobile money platforms, they will enable the state to transfer cash directly to those in need — without the money going through intermediaries that might take a cut.

India, the world’s largest democracy, is also the world’s largest poor country. The legitimacy of any elected government turns on its ability to provide for the poor. As such, both our federal and state governments subsidize a wide range of products and services with the expressed intention of making them affordable for the poor: rice, wheat, pulses, sugar, kerosene, cooking gas, naphtha, water, electricity, fertilizer, railways. The cost of these subsidies is about 4.2 percent of India’s gross domestic product, which is more than enough to raise the consumption level of every poor Indian household above the poverty line.

Sadly, government provision of these subsidies is associated with significant leakages. For example, as much as 41 percent of subsidized kerosene, which poor families use to light their homes, is “unaccounted for” and is probably lost to the black market. Dealers sell it on the side to middlemen who mix diesel into fuel and resell it, which is bad for both health and the environment.

Furthermore, some subsidies benefit those who do not need them. Power subsidies, for example, favor the (generally wealthier) two-thirds of India who have access to regular grid-provided electricity, and, in particular, wealthier households, which consume more power.

Why, then, do product subsidies form such a central part of the Indian government’s antipoverty policies? Subsidies are a way for states that lack implementation capacity to help the poor; it is easier to sell kerosene and food at subsidized prices than to run effective schools and public health systems.

The three elements of JAM are a potential game-changer. Consider the mind-boggling scale of each element. Nearly 118 million bank accounts have been opened through Jan Dhan. Nearly one billion citizens have a biometrically authenticated unique identity card through Aadhaar. And about half of Indians now have a cellphone (while only 3.7 percent have land lines).

Here’s one example of how these three elements can be put to work.

The Indian government subsidizes households’ purchases of cooking gas; these subsidies amounted to about $8 billion last year. Until recently, subsidies were provided by selling cylinders to beneficiaries at below-market prices. Now, prices have been deregulated, and the subsidy is delivered by depositing cash directly into beneficiaries’ bank accounts, which are linked to cellphones, so that only eligible beneficiaries — not “ghost” intermediaries — receive transfers.

Under the previous arrangement, the large gap between subsidized and unsubsidized prices created a thriving black market, where distributors diverted subsidized gas away from households to businesses for a premium. In new research with Prabhat Barnwal, an economist at Columbia University, we find that cash transfers reduced these “leakages,” resulting in estimated fiscal savings of about $2 billion.

The scope for extending these benefits is enormous. Imagine the possibility of rolling all subsidies into a single lump-sum cash transfer to households, an idea mooted decades ago by the economist Milton Friedman as the holy grail of efficient and equitable welfare policy. JAM makes this possible.

To realize the full benefits of JAM, the government needs — and has begun — to address both “first-mile” and “last-mile” challenges.

The “first-mile” challenges are identifying eligible beneficiaries and coordinating between states and government departments. To deliver means-tested benefits via cash transfers, the government will need a way of identifying the poor and linking beneficiaries to their bank accounts. Further, eligibility criteria and beneficiary rosters vary, and technology platforms, where they exist, may not be seamlessly interoperable. Hence the need for an extensive coordination exercise under the national government, which can incentivize states to come on board by potentially sharing fiscal savings with the states.

The “last-mile” challenge arises because cash transfer programs risk excluding genuine beneficiaries if they do not have bank accounts. Indeed, even if they have an account, they may live so far away from a bank — India has only 40,000 rural bank branches to serve 600,000 villages — that collecting benefits is arduous. Extending financial inclusion to reach the remotest and poorest will require nurturing banks that facilitate payments via mobile networks, which has achieved great success in countries such as Kenya. India can then leapfrog from a bank-less society to a cashless one just as it went from being phoneless to cellphone- saturated.

Over all, JAM offers substantial benefits for government, the economy and especially the poor. Government finances will be improved because of the reduced subsidy burden; at the same time, government will also be legitimized and strengthened because it can transfer resources to citizens faster and more reliably. Experimental evidence from the world’s largest workfare program — the Mahatma Gandhi National Rural Employment Guarantee Scheme — found that delivering wages via a biometrically authenticated payment system reduced corruption and enabled workers to receive salaries faster. With the poor protected, market forces can be allowed to allocate resources with enormous benefits for economywide efficiency and productivity enhancement. The chief beneficiaries will be India’s poor; cash transfers are not a panacea for eliminating their hardship, but can go a long way to improving their lives."
india  2015  economics  poverty  policy  cashtransfers  universalbasicincome  latinamerica  brazil  brasil  mexico  leakages  blackmarket  subsidies  government  ubi 
july 2015 by robertogreco
Inside Colorado’s flourishing, segregated black market for pot - The Washington Post
"The resentment goes something like: We Latinos and African Americans from the ‘hood were stigmatized for marijuana use, disdained and disproportionately prosecuted in the war on drugs. We grew up in the culture of marijuana, with grandmothers who made oil from the plants and rubbed it on arthritic hands. We sold it as medicine. We sold it for profit and pleasure.

Now pot is legalized and who benefits? Rich people with their money to invest and their clean criminal records and 800 credit scores. And here we are again: on the outskirts of opportunity. A legion of entrepreneurs with big plans and rewired basements chafes with every monthly state tax revenue report.

Ask someone who buys and sells in the underground market how it has responded to legalization and the question is likely to be tossed back with defiance. “You mean, ‘Who’s been shut out of the legal market?’ ” asks Miguel Lopez, chief community organizer of the state’s 420 Rally, which calls for legalization of marijuana nationally.

“It’s kind of like we made all the sacrifices and they packed it up and are making all the money,” says Cisco Gallardo, a well-known gang outreach worker who once sold drugs as a gang member. For the record, he does not partake. It rattles him a little, he says, to see the young people with whom he works shed their NFL and rapper dreams for the next big thing: their own marijuana dispensary.

In this light, taxation is seen as a blunt instrument of exclusion, driving precisely the groups most prosecuted in the war on drug further into the arms of the black market where they remain at risk for arrest or robbery. In one Denver dispensary, a $30 purchase of one-eighth of the Trinity strain of cannabis includes $7.38 in state and local taxes – a near 33 percent rate. As Larisa Bolivar, one of the city’s most well-known proponents of decriminalizing marijuana nationally and opening a true free market, puts it: That seven bucks buys someone lunch.

“It’s simple,” she says. “A high tax rate drives black market growth. It’s an incentive for risky behavior.”"
colorado  2014  blackmarket  warondrugs  inequality  legalization  marijuana  markets  economics  taxes 
july 2014 by robertogreco
Design for the New Normal (Revisited) | superflux
"I was invited to talk at the NEXT Conference in Berlin by Peter Bihr, as he felt that a talk I gave last year would fit well with the conference's theme Here Be Dragons: "We fret about data, who is collecting it and why. We fret about privacy and security. We worry and fear disruption, which changes business models and renders old business to ashes. Some would have us walk away, steer clear of these risks. They’re dangerous, we don’t know what the consequences will be. Maintain the status quo, don’t change too much.Here and now is safe. Over there, in the future? Well, there be dragons."

This sounded like a good platform to expand upon the 'Design for the New Normal' presentation I gave earlier, especially as its an area Jon and I are thinking about in the context of various ongoing projects. So here it is, once again an accelerated slideshow (70 slides!) where I followed up on some of the stories to see what happened to them in the last six months, and developed some of the ideas further. This continues to be a work-in-progress that Superflux is developing as part of our current projects. "

[Video: http://nextberlin.eu/2013/07/design-for-the-new-normal-3/ ]
anabjain  2013  drones  weapons  manufacturing  3dprinting  bioengineering  droneproject  biotechnology  biotech  biobricks  songhojun  ossi  zemaraielali  empowerment  technology  technologicalempowerment  raspberrypi  hackerspaces  makerspaces  diy  biology  diybio  shapeways  replicators  tobiasrevell  globalvillageconstructionset  marcinjakubowski  crowdsourcing  cryptocurrencies  openideo  ideo  wickedproblems  darpa  innovation  india  afghanistan  jugaad  jugaadwarfare  warfare  war  syria  bitcoins  blackmarket  freicoin  litecoin  dna  dnadreams  bregtjevanderhaak  bgi  genomics  23andme  annewojcicki  genetics  scottsmith  superdensity  googleglass  chaos  complexity  uncertainty  thenewnormal  superflux  opensource  patents  subversion  design  jonardern  ux  marketing  venkateshrao  normalityfield  strangenow  syntheticbiology  healthcare  healthinsurance  insurance  law  economics  ip  arnoldmann  dynamicgenetics  insects  liamyoung  eleanorsaitta  shingtatchung  algorithms  superstition  bahavior  numerology  dunne&raby  augerloizeau  bionicrequiem  ericschmidt  privacy  adamharvey  makeu 
april 2013 by robertogreco
Berlusconi's exit – what does it mean for Italy? | World news | The Guardian
"Austerity might also strengthen the most well-known building block of Italian society: the family. Many foreigners are rather sneering when they observe extended families living in the same block of flats, if not the same flat. It creates childish, immature grownups, they say. It's not usually true at all, and what those criticisms fail to realise is not only the fact that living together is very often an economic, rather than an emotional, choice…; they also ignore the fact that the strength of the family is the reason that Italy's social fabric is so much better knitted than Britain's. And there are useful economic consequences: almost every successful business is built upon the family…If austerity means relatives have to huddle once again under the same roof, it might be claustrophobic, but at least it might mean that Italy, once again, resists the disintegration of the family unit."
italy  2011  europe  eurozone  austerity  austeritymeasures  families  society  bureaucracy  competition  economics  berlusconi  carlolevi  normandouglas  blackmarket  blackeconomy  romanoprodi  rootlessness  mobility  arrangiarsi  slow  slowfood  braindrain  meritocracy  tobiasjones 
november 2011 by robertogreco

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