Unconditional Basic Income becomes a leading policy idea

The Unconditional Basic Income (UBI) will become a mainstream policy idea in 2017, with particular relevance for developing countries.

With increased trends in automation and the “gig economy” pointing to labour market disruption and uncertainty, the UBI looks increasingly probable. This once-heretical idea of giving all citizens a baseline income that is enough to live on, without requiring anything in return, has acquired sharp relevance – there is a real prospect that a large section of the US’s working population could lose their jobs nearly overnight with the advent of driverless trucks. Advocates point out that a UBI could facilitate a transition to a humane version of the “gig economy”, while boosting entrepreneurship and civic engagement – and mainstream thought-leaders on both the right and left are pricking up their ears.

Pilot programmes are currently underway in Finland, Canada and… Kenya. Yes, Kenya. The most interesting application of UBI policy is actually in developing countries. A recent UBI pilot in India pointed to multiple benefits when an unconditional basic income is provided to the poor – from increased food security and welfare to higher levels of equity, emancipation, entrepreneurialism and economic activity. And in contrast to expensive rich-country UBI schemes, they are far more affordable, particularly if spending is switched from existing subsidies.

Most of the resistance to trying UBI more widely has been due to the perceived outlandishness of the idea. But as the debate moves rapidly towards centre-stage, UBI is fast becoming a more respectable idea. Could the UBI be a major step towards ending poverty, by providing a floor for everyone? The GiveDirectly pilot in Kenya aims to find out and expects their findings to shape the future of anti-poverty policy.

The UBI has the potential to massively disrupt the development sector in 2017 and beyond – with the figures showing that it would take $80 billion in cash transfers to move everyone above the poverty line, while the world spends almost twice that in global aid every year. With new pilots being announced and policy-makers showing interest in countries from the Netherlands to Namibia, INGOs should watch the developments carefully and consider what it means for their own programming.