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Unemployed Giuseppe Calafiore stands outside a tax assistance centre where he has applied for the new "citizens' income" poverty relief scheme, in Rome, Italy March 6, 2019. REUTERS/Gavin Jones - RC1E1E44FE20
Future Development

Making quasi-sense of recent basic income initiatives

Last year, when the Finnish and Canadian trials were, respectively, not renewed and cancelled, the momentum behind universal basic income (UBI) was seemingly brought to a halt.

Yet four recent developments have reenergized the debate.

In Finland itself, the government unveiled the long-awaited preliminary results from its quasi-UBI pilot, or an unconditional cash transfer to 2,000 unemployed people. What did it find? The evaluation design was severely compromised with some early policy choices; there were no effects on employment, nor on unemployment. But people were healthier and more optimistic about the future. It’s interesting how views on the results of the experiment range from stunning defeat to wildly successful.

Moving to southern Europe, last week the Italian government began rolling out its “Citizens’ Income” program. Remarkably enough, it is the country’s first national anti-poverty social assistance measure. Touted as a UBI, the program is instead a targeted, means-tested guaranteed minimum income scheme with a series of compulsory activities.

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In the United States, the Green New Deal proposal had a UBI-like provision “for those unwilling to work.” It created shockwaves—and this at a time when Andy Yang is making UBI the central theme of his presidential bid. His is not, however, a UBI as usually understood—scrap existing schemes and give the same amount of cash to everyone—but an optional, “top-up” program where people can opt to maintain their current safety net benefits or get $1,000 per month. At a local level, a campaign in Washington, D.C. is calling for a UBI financed by a carbon tax, while Maryland introduced a bill to establish a UBI funded by taxing medical cannabis producers (these complement existing schemes tied to oil dividends and casino revenues).

In India, a group of economists have proposed a quasi-universal basic rural income (QUBRI), a guaranteed minimum income program for rural areas. This joins a compilation of UBI-type measures heralded by political parties at the national and state levels. The QUBRI proposal doesn’t downplay the trade-offs between coverage, size of transfers, and fiscal costs; and given the pre-existing large-scale programs, the idea of applying affluence tests to the better-off instead of targeting from the bottom could be an option to consider. But it is unclear why the scheme should be confined to (fluidly defined) rural areas, and how the QUBRI would interface with NREGA, a right to work scheme, or help manage agricultural risks—a key issue in reforming universal food subsidies.

These developments, which are the tail end of a wider set of experiments and initiatives, spark three questions:

  1. Are UBI proposals bound to lose steam and land on quasi-UBI variants?
  2. Is labeling a program as “quasi-UBI” political marketing or an avatar ready to pop up into a full UBI down the line?
  3. Have we been here already, and what insights can the history of social protection offer?

Behind different labels lies the same set of basic issues that shaped debates in the past decades, e.g., why do we need social assistance (“why transfers instead of jobs”), how far should its coverage go (“for the bottom of the income distribution or beyond it”), what form should programs take (e.g., “unconditional or conditional on work and other activities”), and the optimal tax-benefit configurations to get there (“how to balance coverage, transfers of meaningful amount, and fiscal affordability”).

That we collectively engage in this vital conversation is great news—but that messy terminology gets in the way of such dialogue is a pity.

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.

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