3. Get rid of money
Cash-based economies harm the poor by heightening the risks they face when carrying money and fueling government corruption and inefficiency. So why not eliminate cash altogether? When governments electronically transfer money to beneficiaries of public benefit programs, it decreases administrative costs, diverts more of the money budgeted for the programs to the poor, and reduces the chance that recipients will be robbed. Depositing public benefits such as pensions into poor households' bank accounts, as is done in Peru, also enables them to reliably save money and better prepare for emergencies. What's more, in the context of international development assistance, electronically transferring funds directly to beneficiaries, as opposed to foreign governments or aid agencies, decreases corruption and thus has a greater impact on the people we aim to help.
USAID recently announced its intention to be a leader in this realm, but the World Bank has been slower to embrace the concept. Many of the bank's programs rely heavily on physical currency, such as its Primary Education Stipend Project in Bangladesh and its Child Support Program in Pakistan. Luckily, as a start, the bank recently conceded that "program operators, financial institutions, and IT innovators have developed a wide range of strategies to deliver transfers effectively ... [and] cut fraud and achieve wider coverage."
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