Links - 17th December 2019 (1) (Basic Income)

Universal Basic Income Is Neither Universal Nor Basic - Bloomberg - "In 2016, many Brits and Americans who had lost their economic usefulness but retained some political power used the ballot box to revolt before it is too late. They revolt not against an economic elite that exploits them, but against an economic elite that doesn’t need them anymore. It is far more frightening to be useless than to be exploited... with the rise of AI, robots and 3-D printers, cheap labor will become far less important, and demand for raw materials might also drop. Instead of manufacturing a shirt in Dhaka and shipping it all the way to New York, you could buy the shirt’s code online from Amazon and print it in Manhattan. Zara and Prada stores could be replaced by 3-D printing centers, and some people might even have such printers at home.Simultaneously, instead of calling customer services in Bangalore to complain about your printer, you could talk with an AI representative in the Google Cloud. The newly unemployed workers and call center operators in Dhaka and Bangalore don’t have the education necessary to switch to designing fashionable shirts or writing computer code — so how will they survive?... American voters might conceivably agree that taxes paid by Amazon.com Inc. and Alphabet Inc. be used to give stipends to unemployed coal miners in Pennsylvania and jobless taxi-drivers in New York. However, does anyone think American voters would also agree that part of these taxes should be sent to Bangladesh to cover the basic needs of the unemployed masses there? Another major difficulty is that there is no accepted definition for “basic” needs. From a purely biological perspective, the only thing a Homo sapiens needs for survival is about 2,500 calories of food per day. Over and above this biological poverty line, every culture in history defined additional basic needs, which change over time. In Medieval Europe, access to church services was seen as even more important than food, because it took care of your eternal soul rather than of your ephemeral body. In today’s Europe, decent education and health care services are considered basic human needs, and some argue that even access to the internet is now essential for every man, woman and child... Whichever way you choose to define basic human needs, once you provide them to everyone free of charge, they will be taken for granted, and then fierce social competitions and political struggles will focus on non-basic luxuries — be they fancy self-driving cars, access to virtual-reality parks, or enhanced bioengineered bodies. Yet if the unemployed masses command no economic assets, it is hard to see how they could ever hope to obtain such luxuries. Consequently, the gap between the rich (Tencent managers and Google shareholders) and the poor (those dependent on universal basic income) might become bigger and more rigid than ever.Hence, even if universal basic income means that poor people in 2050 will enjoy much better medical care and education than today, they might still feel that the system is rigged against them, that the government serves only the super-rich, and that the future will be even worse for them and their children. People usually compare themselves to their more fortunate contemporaries rather than to their ill-fated ancestors... Homo sapiens is just not built for satisfaction. Human happiness depends less on objective conditions and more on our own expectations. Expectations, however, tend to adapt to conditions, including to the condition of other people. When things improve, expectations balloon, and consequently, even dramatic improvements in conditions might leave us as dissatisfied as before.If universal basic income is aimed to improve the objective conditions of the average person in 2050, it has a fair chance of succeeding. But if it is aimed to make people subjectively more satisfied with their lot in order to prevent social discontent, it is likely to fail."

Alaska Permanent Fund Dividend: Alaska’s universal basic income problem - "For decades, Hammond’s system was an unprecedented success. But in 2015, plunging oil prices created major shortfalls in the state’s budget. In response, then-Gov. Bill Walker deviated from the traditional PFD formula and reduced the value of the check for 2016. Doing so allowed the government to continue funding state services and ensured the sustainability of the fund. Instead of a check for $2,052, as they would have received with the traditional formula, Alaskans that year got a comparatively paltry $1,022.In 2018, Republican state Sen. Mike Dunleavy saw an opportunity. Despite traditional Republican aversions to handouts, Dunleavy ran for governor on the campaign platform of increasing the PFD. He promised every resident up to $6,700, to make up for Walker’s cuts in 2016 and 2017 — though he was foggy on how the state could pay.The result? Dunleavy won by a landslide.The problem is that he now finds himself unable to fulfill his campaign promise without major cuts elsewhere. He’s now seeking to jettison other state commitments to health care, education, infrastructure, and other vital areas"

Why a Universal Basic Income Would Be a Calamity - WSJ - "what has Saudi Arabia’s de facto UBI created? A population deeply resistant to work. Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor. Regular citizens lack dignity while the royal family lives a life of luxury. The technocratic elite has embraced relatively liberal values at odds with much of the society’s conservatism. These divisions have made the country a fertile recruiting ground for extremists... Casually accepting the mass unemployment of a large part of the country and viewing those people as burdens would undermine this social contract, as millions of Americans become dependent on the government and the taxpaying elite. It would also create a structural division of society that would destroy any pretense of equality. UBI supporters would counter that their system would free people to pursue self-improvement and to take risks. America’s experience over the past couple of decades suggests that the opposite is more likely. Labor Department data show that at the end of June the U.S. had 6.2 million vacant jobs. Millions of skilled manufacturing and cybersecurity jobs will go unfilled in the coming years.This problem stems from a lack of skilled workers. While better retraining programs are necessary, too many of the unemployed, or underemployed, lack the motivation to learn new skills. Increasingly, young unemployed men are perfectly content to stay at home playing videogames... purpose can’t be manufactured, nor can it be given out alongside a government subsidy. It comes from having deep-seated responsibility—to yourself, your family and society as a whole."

A village in Kenya is quietly disproving the biggest myth about basic income - "Owiti and his fellow villagers have slowly and quietly been disproving the biggest misconception about basic income - that people who receive free money will stop working and waste the cash on vices like gambling, drugs, or alcohol. Anecdotal evidence and nearly all empirical research has shown that unconditional cash transfers help people help themselves. Recipients often use the income to pay for their kids' school fees, buy medicine, repair their homes, and invest in their small businesses to further grow their wealth. While some use the money for so-called “temptation goods,” as economists call them, the majority of recipients defy the stereotype that people in poverty somehow lack moral character or responsibility.As advocates often claim, what the poor seem to suffer from is actually a lack of cash... so far Teti has only observed a few people who seem to misuse the money.Even those, she said, tend to split the money between practical purchases and indulgences... Other research has found that people's spending on alcohol and cigarettes actually went down when they received direct cash transfers. Faced with a brighter future, many people stop using temptation goods as a way to cope with a hopeless situation, researchers have discovered. In the village GiveDirectly is working with, interviews with nearly a dozen recipients showed that most people have actually worked more since the study began."
This coheres with other research on the best way to improve poor people's lives being giving them money

Money for nothing: the truth about universal basic income - "Although such welfare systems have improved standards of living, most require an immense bureaucracy to administer benefits and to ensure that recipients meet strict qualification standards.Welfare critics have long argued that the administrative costs are huge and provide limited positive results; in some cases, they discourage people from finding jobs. In response, leaders across the political spectrum have latched onto the idea of UBI — which has been promoted over the centuries by luminaries such as Thomas More (in his 1516 novel Utopia), philosopher Thomas Paine, the liberal US President Franklin Delano Roosevelt and economist Milton Friedman, a favourite of conservatives including US President Ronald Reagan and UK Prime Minister Margaret Thatcher. Progressive politicians and thinkers have seen the idea as a way to end poverty; conservatives have viewed it as a streamlined welfare system that is easier and cheaper to run... The documents Forget uncovered revealed that teenage children in MINCOME families completed an extra year of schooling compared with teens in similar small Manitoba towns. Hospitalizations decreased by 8.5%, with the largest drops in admissions for accidents and injuries and mental-health diagnoses. Importantly for economists, who worried that the programme might encourage people to quit their jobs, Forget found that employment rates stayed the same throughout the trial... Martinelli thinks that the data will show that it will cost too much to make a programme effective. “An affordable UBI is inadequate, and an adequate UBI is unaffordable,” he says."

No plans to expand Finland basic income trial - "the influential OECD think tank said a universal credit system, like that being introduced in the UK, would work better than a basic income in Finland. Universal credit replaces several benefit payments with a single monthly sum.The study by the Organisation for Economic Co-operation and Development said income tax would have to increase by nearly 30% to fund a basic income. It also argued that basic income would increase income inequality and raise Finland's poverty rate from 11.4% to 14.1%.In contrast, the OECD said, universal credit would cut the poverty rate to 9.7%, as well as reduce complexity in the benefits system.Another reform option being considered by Finnish politicians is a negative income tax"

Top Economists Endorse Universal Basic Income - "how to pay for all of this? Both Sir Chris Pissarides and Professor Diamond advocate higher taxes on high earnings. They also recommend wealth taxes, though they disagree about how these should work: Professor Diamond is strongly in favor of a well-functioning estate tax, while Sir Chris prefers capital gains taxes on property transactions, including family houses. Perhaps the strongest endorsement of wealth taxes came not come from these economists, however, but from their fellow Nobel memorial prize winner, James Heckman. Speaking on the inequality panel, Professor Heckman noted that the falling cost of capital was driving down wages. To correct this, he advocated shifting the burden of taxation to capital rather than labor."

Basic Income Grants Alleviate Poverty in Namibia - "Before the pilot program, 42 percent of children in the village were malnourished. Now the proportion of malnourished children has dropped significantly, to 10 percent.The village school reported higher attendance rates and that the children were better fed and more attentive. Police statistics showed a 36.5 percent drop in crime since the introduction of the grants. Poverty rates declined from 86 percent to 68 percent (97 percent to 43 percent when controlled for migration). Unemployment dropped as well, from 60 percent to 45 percent, and there was a 29 percent increase in average earned income, excluding the basic income grant. These results indicate that basic income grants can not only alleviate poverty in purely economic terms, but may also jolt the poor out of the poverty cycle, helping them find work, start their own businesses, and attend school."

Basic income paid to the poor can transform lives - "First, it had strong welfare, or “capability”, effects. There were improvements in child nutrition, child and adult health, schooling attendance and performance, sanitation, economic activity and earned incomes, and the socio-economic status of women, the elderly and the disabled.Second, it had strong equity effects. It resulted in bigger improvements for scheduled caste and tribal households, and for all vulnerable groups, notably those with disabilities and frailties. This was partly because the basic income was paid to each individual, strengthening their bargaining position in the household and community.Third, it had growth effects. Contrary to what sceptics predicted (including Sonia Gandhi), the basic incomes resulted in more economic activity and work.Conventional labour statistics would have picked that up inadequately. There was a big increase in secondary economic activities, as well as a shift from casual wage labour to own-account farming and small-scale business. Growth in village economies is often ignored. It should not be.Fourth, it had emancipatory effects. These are unappreciated by orthodox development thinkers. The poor’s liberty has no value. But the basic income resulted in some families buying themselves out of debt bondage, others paying down exorbitant debts incurring horrendous interest rates. For many, it provided liquidity with which to respond to shocks and hazards. In effect, the basic income responded to the fact that in such villages money is a scarce commodity, and as such that has driven up its price, locking most in a perpetual cycle of debt and deprivation... Critics claim a universal scheme is unaffordable. But they would be a substitute for subsidies that in India account for a huge share of national income. They are distortionary, inefficient, regressive and prone to corruption. Switching is feasible and would have substantial positive effects.Another criticism is that a basic income would be inflationary. But it would be a substitute for more expensive policies. The criticism also neglects the elasticity of supply. Thus, it generated a sharp rise in food production, resulting in better nutrition and productivity and in lower unit prices."

Universal basic income policies don’t cause people to leave workforce, study finds - "There is no significant effect, positive or negative, on employment as a whole, although part-time work does increase by 1.8 percentage points, or about 17 percent.
There is a difference in the effect of the unconditional cash transfer in sectors that produce goods or services that can be traded outside of Alaska and those that cannot. Part-time work increases and employment decreases in the tradable sector, but the effects in the non-tradable sector are insignificant.
Any negative effects in the non-tradable sector, meanwhile, are offset by positive macro effects."

Richard Parncutt: Eliminate Poverty with Universal Basic Income and Flat Income Tax (BIFT) - "The rising wealth gap means that progressive income tax is not working. Here are two possible reasons for the failure of progressive income tax to stabilize the wealth gap:
    In the UK, VAT (20% on most goods and services) is exacerbating poverty. The same applies to many countries (but not the USA, which has no VAT and sales taxes are lower). In the UK and other countries with high VAT, people with low incomes pay a higher proportion of their income in VAT than people with high incomes. In other words, VAT is regressive, and the regressivity of VAT can completely cancel out the progressivity of income tax (more)! In the end, people are effectively paying about the same rate of tax on every dollar they earn. The obvious solution is to get rid of VAT, but no-one is talking about that, because the rich like it. The more money the government gets from VAT, the less they need from the rich.
    The culture of tax deductions favors the rich. Details vary from country to country (more), but the general principle is the same. If I buy a piano to give music lessons, I can deduct the cost of the piano from my income and pay less income tax. That seems fair, but it is not. First, the rich are more likely to be working independently or starting new businesses, generating costs that can be deducted. Second, the rich can afford better accountants who know how to manipulate the tax-deduction system. In this way, tax deductions primarily benefit the rich (more). If I need a piano to give piano lessons and I have no money, I should not get a tax deduction. Instead, I should borrow the money and pay it back from my earnings. That's what banks are for. The same applies to any expenses incurred to produce additional income. A simpler, fairer system with lower tax rates and no tax deductions at all is possible, but no-one is talking about it. The rich want to pay as little tax as possible, while at the same time keeping the public in the dark about what is really happening...
The following figure, copied from the Austrian newspaper Der Standard on 8 January 2019, illustrates the problem. The vertical axis is the percentage of income that each Austrian effectively pays in tax. The horizontal axis is income, starting with the lowest 10% of people and ending with the highest 10%. The graph shows that the rich, the poor, and the middle class are all ultimately paying between 40% and 50% of their income in tax. In other words, Austria is a "flat tax republic". But the problem is not confined to Austria. The situation is similar in most countries, including France. The lower red part of the graph shows the effect of income-tax progressivity: people with lower incomes pay a lower proportion of income as "income tax". The dark blue band at the top shows how that progressivity is cancelled out by the regressivity of VAT and petroleum tax. The result is close to a flat income tax system. No wonder the wealth gap is growing. If everyone is effectively paying almost 50% of their income in tax and receiving all kinds of government benefits in return, the current system is already remarkably close to BIFT. Why not just give everyone the same basic income, tax all income at 50%, and get rid of the other taxes and benefits? Of course other taxes are necessary (environmental taxes to reduce pollution, transaction taxes to calm the markets, wealth taxes to reduce the wealth gap), but VAT on everyday purchases such as regular food is certainly unfair and should be eliminated. VAT for luxury goods is ok, especially if they cause environmental damage... The current relationship between income before welfare and/or tax and income after welfare and/or tax is already remarkably close to the above graph in most countries (some examples are below), but unnecessarily arbitrary and complex. BIFT would simplify that. In fact, it is the the simplest and most effective way to make income tax progressive."
The explanation for funding didn't make sense. Very rambly and repetitive article too

Why Should We Support the Idea of Universal Basic Income? - "A plan of $12,000 per U.S. citizen over 18, and $4,000 per citizen under 18 amounts to a revenue need of $2.98 trillion, which after all the programs that can be eliminated are rolled into it, requires an additional need of $1.5 trillion or so. So where do we come up with an additional $1.5 trillion?
• A land value tax has been estimated to be a source of revenue of about $1.7 trillion.
• A flat tax of around 40% would be sufficient. Due to the way such a tax works in combination with UBI, this would effectively be a reduction in taxes for about 80% of the population.
• A 10% value added tax (VAT) has been estimated to be a source of revenue of about $750 billion. That could be increased to reach $1.5 trillion or added to other sources of additional revenue.
• These other sources of revenue could be a carbon tax ($440 billion), a financial transaction tax ($350 billion), or taxing capital gains like ordinary income and creating new upper tax brackets ($160 billion). Did you know that for fifty years — between 1932 and 1982 — the top income tax rate averaged 82%? Our current highest rate is 39%.
• From 2008 to 2014, we created about $5 trillion out of thin air, and handed it to banks in hopes they would lend it to people. It was called quantitative easing. The result was rich people got even richer. Why not skip the banks, and just hand debt-free money directly and equally to all citizens? Potentially, a quarter of basic income could require no taxes at all."
Apparently people don't respond to incentives and change their behavior when taxed. And this is a fundamental understanding of quantitative easing

The important questions about universal basic income haven’t been answered yet - "We haven’t decided what problem we want to solve, much less what experimental results we’d see if we’d successfully solved it.That’s a problem, Rothstein told me. Studies like the one Finland recently conducted are “meant to tell us whether a UBI is a good idea, but it’s not clear what results would lead to you saying, ‘Yes, it’s a good idea’ or, ‘No, it’s not a good idea.’”Are we looking for a UBI to increase labor market participation? Leave it the same? Decrease it? Do we want a UBI in order to fix welfare disincentives to work, or in order to fix the fact that people have to work to survive? “You can’t solve a problem and its opposite with the same solution”... “A truly universal UBI would be enormously expensive,” the paper argues. This is uncontroversial, even among UBI supporters, but it’s important to spell out — and to look in depth at our options for paying for it.  “The kinds of UBIs often discussed would cost nearly double current total spending on the ‘big three’ programs (Social Security, Medicare, and Medicaid),” the paper finds. “Moreover, each of these programs would likely be necessary even if a UBI were in place, as each addresses needs that would not be well served by a uniform cash transfer.”... “A universal payment of $12,000 per year to each adult U.S. resident over age 18 would cost roughly $3 trillion per year,” they find. “This is about 75 percent of current total federal expenditures, including all on- and off-budget items, in 2017. (If those over 65 were excluded, the cost would fall by about one-fifth.) Thus, implementing this UBI without cuts to other programs would require nearly doubling federal tax revenue.”  Many advocates of UBI have a solution to that: UBI should replace other programs, not just supplement them. The NBER paper argues that this solution doesn’t work as well as we’d hope. “Even eliminating all existing transfer programs — about half of federal expenditures — would make only a dent in the cost,” they observe.  And that’s not the only problem. Eliminating all existing transfer programs in favor of a UBI would leave some big holes. For example, under the UBI they propose, a single parent of three children would be eligible for $12,000 a year in total assistance. Under the current system, that parent would likely be eligible for a lot more: health care through Medicaid, food stamps, rent and housing assistance, and potentially transfer payments through Temporary Assistance for Needy Families. “Replacing existing anti-poverty programs with a UBI would be highly regressive”"

Enough With This Basic Income Bullshit - "By the way, you’ve probably never heard of it, but basic income already exists in France—it is called the Revenu de solidarité active (“RSA”) — formerly Revenu minimum d’insertion (“RMI”). It’s a welfare benefit “aimed at people without any income who are of working age but do not have any other rights to unemployment benefits (such as contributions-based unemployment benefits).” (2.5 million people claim the RSA every year and it costs €10 billion annually, which represents less than 0.4% of the French GDP. Bear in mind that those under 25 are not eligible.)... those in favor of basic income should pay attention to the “RMI/RSA” and draw appropriate lessons: it’s not simple (at all); it has adverse economic effects; and it is widely denounced, notably on the right, as “assistance” (assistanat) that deprives those who claim the benefit from any incentive to look for a job, thus making them live off the middle class taxpayers. If you know politics, you can guess where this is going. Unfortunately, politics is not Silicon Valley’s strong suit. I see four reasons why Silicon Valley sees nothing but basic income as the preferred solution to our mounting social problems. First, Entrepreneurs in general, especially when they’re young, well-educated white men from privileged backgrounds, have no reason to have any familiarity with the complicated and unattractive world of the social state. This is true in every country. Second, there’s a myopia that is specific to the US: the social state there is designed so that only the poor, the old and the unemployed are eligible for social benefits. The fact that the US used to be the sole developed country without universal health insurance makes the US social state all the more of a riddle (even though healthcare sucks up 20% of GDP). Third, there’s a libertarian ideological bias in Silicon Valley that seems to turn people into ignorant morons when it comes to social state-related issues. As engineers, some don’t even get the political stakes. In any case, few express any interest in government-related issues, which remain uncharted territory (even though the US government made Silicon Valley). Fourth, even when they genuinely care about the less well-off, Entrepreneurs tend to focus too much on what they perceive as a giant inefficient bureaucratic machine rather than on the variety of life-saving benefits that this machine provides. In their eyes, because it’s supposedly so inefficient, the social bureaucracy should be swiftly replaced by a simple seamless app—and, hey, let’s call it “basic income”! Because of those biases, all the tech people who try and imagine new forms of benefits for the digital age tend to completely disregard the most critical dimension of all: politics. Yes, there is a political dimension to the social state, and it is not pretty—just consider the ongoing fight around Obamacare... it is widely documented that mitigating risks for individuals through social insurance sustains economic growth, supports small businesses, enhances individual freedom, and makes entrepreneurship thrive...
'If society’s efforts are focused only on its weakest members through selective social policies largely based on “means-tests,” taxpayers come to think in terms of “we” and “they”. “We” — the better-off wage earners and the middle class — have to pay to the state, but get nothing in return. The ground is thus prepared for the disintegration of social solidarity; which in turn encourages tax revolts. The fact is that it is not the weight of the tax burden that causes such revolts, but rather the feeling among taxpayers that they do not get anything for their money. People who derive some benefit from a welfare system are its greatest supporters and therefore pay taxes without feeling exploited.'"
Interestingly a lot of Americans view social insurance as "socialism" which will destroy economic growth, small businesses, individual freedom and entrepreneurship. But then this might have more to do with the nebulous nature of the term "socialism", which gets conflated with social democracy by both its proponents and opponents in endless bait and switching

Unconditional nation-wide Cash transfer programme, Iran - International Basic Income Week - "in December of 2010 the Iranian Cash Transfer Programme was started, paying out the same monthly amount to everyone...
So HOW can a programme that benefits 90% of the population (and the environment) be unpopular?
It’s not unpopular amongst the lower income people. But there is an avalanche of opinions against the cash transfers within the conservative media, academics and the government. One of their arguments is that people don’t work if they get free money... We found no evidence that cash transfers reduced labor supply (With the exception of young people still in education). Some workers even worked more hours after receiving the unconditional income! This has something to do with the source of revenue the cash transfers get funded from: The disbanded subsidies on energy, so – in effect: a fuel tax. People don’t get taxed more on their income – which is usually the main channel for negative labor supply effects. There is little or no evidence in the economics literature that cash transfers have a negative impact on willingness to work. Yes, in theory if you do to need income to live, you may decide not work, but empirically this is not true for the vast majority of the people... The Iranian Cash Transfer Programme could be the UBI model for all oil-rich countries, that can avoid the negative effect of raising the funds through income taxation."

Universal Basic Income and the Threat of Tyranny - "when we examine historical trends in politics and economics, we can spot a basic pattern: political rights are strongly correlated with economic participation. Societies where the state economy depends on small inputs from many different citizens tend to give their citizens significantly more rights, including the right of participation in the government itself. Societies where the state economy comes from natural resources, or other sources that require only a small, fixed number of people to defend or maintain them, tend to develop autocratic regimes with little concern for the welfare of their citizens. This is far from a new observation. Already in classical Greece, Plato reached the same conclusion about the Greek city-states, though in his time the main factor was military more than economic. He observed that city-states with a military based on hoplites (elite infantry who came from the upper classes of society, mostly through the requirement that they finance the expensive armor and equipment for themselves, meaning poor people could not be included) tend to develop an oligarchic government; city-states whose army was based on warships (which in those days required a great number of rowers, a job which did not require much equipment or training, therefore was available for the lower classes) would develop democracy... The World Bank gives us a list of countries ordered by what percentage of their merchandise exports comes from fuels. At 50% or more we find, in this order: Iraq, Angola, Algeria, Brunei, Kuwait, Azerbaijan, Qatar, Saudi Arabia, Kazakhstan, Russia, Oman, Norway, Colombia, Bolivia and Bahrain. Can we notice a trend? How many of these countries provide a good set of political rights for their citizens?... We do not get our rights because we deserve them, or even because we fight for them – we get our rights because the government needs us... Commentators love to imagine society after universal basic income as full of people studying, working on crafts and hobbies, and generally living happy and fulfilling lives. But we need to prepare for other eventualities as well. There is no shortage of people who use their spare time to practice hatred and violence, and not always out of some competition for resources. What happens if people use their new free time to organize in gangs, militias, or cults that despise the workers and promulgate hateful ideas? Will the workers still be happy to finance them? How many working people would vote against taking universal basic income rights away from Nazis and terrorists? And once that is done, can we be sure they will not get an appetite to take them away from more and more people they dislike?... Will working people accept a vote by non-working people to increase their universal basic income? If so, what stops them from increasing it indefinitely? In such a world where working people are a minority, it seems quite possible that not only they will be able to take away the political rights of the non-workers, they might even have to. If the non-workers not only live without working, but also get to set the rules for the working people, we would truly have to be utopian fantasists to imagine a good relationship between the two groups, certainly in the long run"
This is one factor given for the failure of African governments - since they have resource revenue (and aid money) they have no incentive to be responsive to their populations

What if the state provided everyone with a basic income? - "Basic income is enjoying a comeback, but the idea has been around for some time. US President Richard Nixon ran a successful trial in the late 1960s, for example. For Nixon, it was an efficient way to reform social welfare. A full rollout of the policy was only put on hold after a right-wing backlash. Influential 20th Century economists Milton Friedman and Friedrich Hayek both thought that some form of guaranteed income was the best way for governments to alleviate poverty. In his book Law, Legislation and Liberty, Hayek presented it as a way to give everyone economic freedom... In 1968, Nixon requested a trial in which 8,500 people were given a basic income of around $1,600 a year for a family of four (equivalent to $10,000/£8,070 today). The free money had little impact on the working hours of participants, with those who did reduce the amount of time they worked engaging in other socially valuable ventures instead. According to Dutch historian Rutget Bregman, an advocate of basic income and author of the book Utopia for Realists, the trial had a major impact on those who took part. “One mother earned a degree in psychology and got a job as a researcher,” he says. “Another woman took acting classes while her husband began composing music.” The woman told the researchers that she and her husband had become self-sufficient artists. Nixon’s experiment also found that young people tended to spend more time in education when they were not working.Canada ran a similar trial in the 1970s, giving 30% of the people in the small town of Dauphin, Manitoba, $15,000 each. A 2011 analysis of the trial by Evelyn Forget, an economist at the University of Manitoba, found that high-school completion rates increased and hospitalisation rates dropped by 8.5%. Employment rates amongst adults did not change at all... a guaranteed income – even a supplementary one – could challenge the idea that people are only valuable members of society if they work... There are also concerns about whether short-term trials can really reveal the sort of social changes that may occur if basic income were actually introduced over the long term. Participants in a trial may use their time to study or retrain because they know they will need to look for work again once the trial ends."