Skip to main content
A woman counts Ethiopian birr notes, after selling a cabbage at the Mercato market in Addis Ababa November 14, 2015. Addis Ababa's 'Mercato' - Italian for 'market' - is reputedly the biggest open-air market in Africa, lying in the west of the capital. Supermarkets have sprouted across the city as the metropolis has expanded with Ethiopia's booming economy, but Mercato remains a popular destination for shoppers seeking clothing, electronics and a huge range of other items. It has been around for as long as the city, which was founded at the end of the 19th century, but it took its current form, and its name, from the Italians who invaded Ethiopia in 1935. The Italian occupation ended in 1941. Picture taken November 14, 2015.    REUTERS/Tiksa Negeri  - GF10000267960
Future Development

Universal basic income pilots: Setting expectations right

A few weeks ago, I had the privilege of attending the annual conference of the Basic Income Earth Network. The humbling experience had no shortage of people who have worked on, thought of, and advocated for universal basic income (UBI) for over 30 years. Since several co-authors and I are working on a UBI report, this was a unique learning opportunity, which fully met my expectations. I look forward to next year’s event in Finland. 

Author

Ugo Gentilini

Senior Economist - Social Protection and Jobs Global Practice, World Bank

The event, which focused on implementation, shed light on a range of experiences worldwide, namely the “pilots” that are quoted in virtually every blog on the subject, including mine.

On this point, the salience of UBI pilots doesn’t appear to be the technical questions they raise. Rather, their value probably lies elsewhere—that is, in the wider societal debates they help elicit.

Let me elaborate. There are plenty of ongoing trials around the globe, but each seems to miss at least one key feature of UBI, if not most of its defining elements. A UBI consists of the provision of cash, paid every month, for an amount that at least closes the poverty gap, provided by the state with no strings attached, and evenly distributed to everyone in a polity.

And yet, from Finland to the Netherlands, from the United States to Canada, current experiments seem variants of traditional interventions, including targeting particular profiles of people (e.g., the “unemployed”), in most cases through means-testing and for specific age cohorts. They may look and smell like a UBI, but they aren’t.

These trials may enhance our understanding of important micro-questions, but they will not propel us forward decidedly on core, big-ticket quandaries. Trials may not fully inform about how to situate UBI in the social protection landscape—which schemes should it replace, which not, why, and how to do so. We need to know about its effects on social services, fiscal space, tax regimes, inflation, firms, pensions, minimum wage, and the harder-to-quantify overall social contract. For pilots to be compelling, they should be large-enough in scale and scope to affect such systemic issues. But if that is too far-fetched, small-scale trials should at least be designed as a pure UBI.

This speaks to the broader challenge of “organic innovation,” that is, testing new ideas within current social protection regimes. In other words, pilots don’t operate in a vacuum and some design compromises are to be expected. This may not hold for experiments like Kenya’s. As part of that scheme, a UBI funded by private donations is paid to about 6,000 people for over a decade. Being externally-conceived, funded and implemented, it can clinically test the idea; but shortcutting the messy political economy of state-citizen interactions may miss an important part of the debate and affect its political sustainability. (The fact that the pilot was recently postponed until after the new election may bear testament to the relevance of those real-world matters).

So fine, pilots may not be ideally-designed. But are they useful? Yes, very much so.

The Oakland experiment underway in California, which provides 100 families with up to $2,000 per month, the Alaska dividend model, and lessons from past pilots feed into a broader debate around basic income in the U.S. This is sparking policy positions—e.g., opposing UBI in favor of jobs creation and existing targeted schemes—as well as political reflections, televised debates, polls among academics, launch of research labs, and even a couple of documentaries (see here and here).

Or take the recent electoral debates in France. While at times confusing and contradictory, a conversation unfolded on the limits and potential of UBI in our evolving societies. Switzerland’s referendum in June 2016, where a basic income was favored by one-quarter of the population, is considered only the beginning of the debate there. And parties in the United Kingdom are flirting with the idea, which most Europeans seemingly support.

One limitation on current conversations on UBI is how constrained they are. A blog, a book, a TED talk, etc. Discussions lack the space to carefully and openly debate and ponder, step-by-step, the issues at hand, including accounting for different perspectives, disciplines, and ways to frame the idea.

Pilots are helping to create such space, and that is good thing. If they could be designed as a true UBI, that would help even further. 

This blog was first launched in September 2013 by the World Bank in an effort to hold governments more accountable to poor people and offer solutions to the most prominent development challenges. Continuing this goal, Future Development was re-launched in January 2015 at brookings.edu.

For archived content, visit worldbank.org »

More

Get daily updates from Brookings