Goats and Soda : NPR

On a busy day in her hair salon, Isac Luís cuts up to 20 hair. Customers choose from the styles displayed on coated posters on the wall of the comfortable shop. A jukebox plays while he works. These days, he can win up to $ 10.

This may not seem much in the United States, but it is almost double the estimated living salary of about $ 6 per day for rural Mozambique, where Luís lives – and much more than he won only a year ago. He did odd jobs, working on the land in the fields of others or cooking bread for sale on the market, and says that he had trouble reaching both ends.

What has changed? Last fall, Luís received $ 1,000 in cash, no condition attached, from a program funded by the USAID – the United States agency for international development.

Luís says he “did not want to receive the money and see him disappear from his hands”, speaking to Emakhuwa, the local language of his village of Muvuruta in northeast Mozambique. By reflecting on the way he could invest money, he realized that his community had no hairdresser. He decided to open one.

And $ 1,000 goes very far in his village. He used the money, delivered by mobile phone by the non -profit givedirect, to erect the small building with a metal roof and fill it with hairdressing salon, such as mirrors, chairs and mower – as well as this jukebox. Less than a year after receiving funds for the first time, his business is developing.

“If before the hair salon, my life weighed 1 kilogram, it will now be 2 or 3 kilograms,” he said, speaking by an interpreter. He used some of the funds to improve his home and send his children to school. “I am happy.”

With funds mainly from USAID, GiveDirect helped more than 10,000 people like Luís in Mozambique and had plans – and funds – to help more. But the Trump administration has reduced the financing of the program and others like that earlier this year.

“All of our Pure Cash Usaid programs have ended,” said Yolande Wright, vice-president of GiveDirect partnerships, including 20 million dollars that were to be delivered to the USAID non-profit organization this year. GiveDirect obtains funds from various sources for its programs that give money to people living in poverty like Luís and also to people at risk of joining violent extremist groups and victims of natural disasters such as earthquakes. “It is difficult for anyone to grasp the gap that the American cuts have left,” she said.

This major shot occurs just when cash help seemed ready to run. After years of skepticism towards species, last fall USAID adopted the model in its own right, declaring that it should become “a central element of its development toolbox”.

Now the Trump administration has thrown a veil of uncertainty around the future of cash. In addition to withdrawing from foreign aid in general, the spokesperson for the State Department, Tammy Bruce, reported a gap in money at a press conference in April, citing deep concerns about the law of abuse and fraud.

Defenders of cash assistance do not drop without fighting. Some are trying to plead in the event of legislators, because they chop the budget for next year that species are a more efficient, effective and transparent way of providing help – that which does not require the inflated bureaucracy decried by the Trump administration.

“If the budgets decrease, there are not many things you can say, well, in fact, you can really do more with less,” explains Wright. She says that cash also adapts with conservative sensitivities.

“If you are someone who believes that people have to give the right to get out of poverty, money really supports this,” she said. “And there are evidence to show it, like hundreds of studies.”

From oppressed to the darling

A little over a decade ago, the idea of USAID, or any help agency, simply giving someone like $ 1,000 in Luís was largely unknown, explains Daniel Handel, director of politicians at Unlock Aid, a foreign aid reflection group.

Instead, USAID has spent its budget of several billion dollars on programs that provide necessities such as food and shelter and vocational training. Handel, who made his debut in foreign assistance by working for Usaid in Nicaragua, began to wonder if, at least sometimes, it might be better to simply give people money.

In 2013, Haendel was pressure for the agency to answer this issue by testing traditional programs against direct cash transfers.

“There was an incredible amount of hands ignition on the idea,” said Handel. The officials were worried about people who exceed that money, political backlash and even if the law allowed it, he said. “We had to convince our Advocate General that giving money to individuals was legal.”

Finally, the officials gave in. By 2018, the agency had conducted several experiences, noting that species worked better in certain circumstances. But the agency was kept silent.

“The USAID press office would not talk about it,” said Handel. “There was a kind of big kerfuffle [over the experiments]. I was forceful because of this. “”

But in the fall of 2024, USAID adopted the model, publishing strategy documents arguing that Cash should be a central element of its development toolbox. “It’s an incredible story, if you like bureaucratic stories,” explains Handel. “A real sea change.”

What started this new perspective?

The tides were pushed towards cash aid, in part, by research.

“There is now a substantial proof base supporting the fact that unconditional cash transfer programs improve the well-being of transfer and their families,” said Alison Fahey, director of partnerships and strategic initiatives of the Abdul Latif Jameel poverty action laboratory. “In an accumulation of studies, we see people increasing their expenses, improving food security, higher income, higher savings, better mental well-being, their children are more likely to be in school.”

These advantages, says Fahey, come because species give people power – they can buy the things they know or invest in things they had only dreamed of before.

“People can make good decisions for themselves, as we have to make improvements to our home or get children’s shoes,” she said. “There is coherent evidence that people do not use cash transfers to buy things like alcohol or tobacco.”

Cash transfers to individuals can also benefit the wider community. A study in Kenya revealed that each dollar in cash has increased total economic activity in the region by $ 2.60, as the beneficiaries spent the money they received.

However, Cash Aid has his criticism.

“I think that once you have searched in literature, you find that there are gaping holes,” said Heath Henderson, economist at Drake University. The biggest, he says, is that it is not clear if cash transfers have really long-term effects. Few studies look beyond the first years. Those who often find advantages describe over time (with a few exceptions). He also says that species cannot necessarily solve some of the structural problems that can perpetuate poverty, such as poor schools and health care or sanitation infrastructure.

These uncertainties and limitations did not stop an increase in cash aid, including about half from American sources, including USAID.

From 2017 to 2022, the Total Humanitarian Humanitarian Aid section increased from around 15% to around 24% – more than $ 10 billion – according to an analysis of the CALP network, a group of more than 90 organizations involved in cash assistance. This share has dropped slightly since then. Where it is now depends on the Trump administration and the congress.

The future of money

In this new reality of foreign aid, a large part of the United States The budget has disappeared with the evisition of the USAID. Is there anything left for cash programs? The State Department, which resumed the remains of the USAID programs this summer, did not respond to the request for NPR for this information.

And the Trump administration has given contradictory signals. In the April press briefing, State Department spokesperson Tammy Bruce said that certain cash assistance programs had been canceled “because they provided cash assistance, the administration of which was moving away”, “invoking concerns concerning improper use and fraud. The State Department reaffirmed this position in a declaration in NPR in July.

These doubts are probably “ideas for queen of the well-being of the Reagan era who are so deeply rooted,” explains Fahey. But she says that the data does not confirm the long -standing concerns of people who do not work or do not work because of the help. “In a coherent and massively, we note that cash transfers, because they are designed in low and intermediate income countries, do not discourage work.”

However, fraud can occur. In 2023, some GiveDirect staff of the Democratic Republic of Congo stole more than a million dollars intended for families in extreme poverty, around 1% of the Truth of Treasury distributed by GiveDirectly that year. GiveDirectly says it is a lower rate of fraud than traditional forms of help.

Despite the anti-Cash state position, the defenders see a reason for hope. In May, Secretary of State Marco Rubio seemed to express a certain support for cash transfers compared to traditional USAID programs at a congress hearing when he explained why certain programs were canceled.

“Some of these projects had a main entrepreneur who had a submarine[contractor]who had a submarine, who had a submarine, who had a local supplier. It’s crazy. It’s madness, “he said.” Why do I need six submarines to go to each other to finally go to the ground? … In some cases, [aid should go] Directly to the person, the group in the field. “”

Lawyers see the cash transfer model, which does not require money to pass through the bureaucracy layers, such as one that could resonate with the administration. “Government bureaucrats are not always the best to make decisions,” said Handel, to unlock aid.

It is not yet clear how much traction these arguments made with legislators and administration officials. Budget negotiations are underway and the restructuring of the State Department is far from over. “This is an incredibly in flight for foreign help, so we will see where the species are,” explains Handel.

If the administration is moving away from money, “it will be a blow,” explains Wright, of GiveDirectly, and that the overall volume of cash transfers should seriously contract. “But I don’t think it will be the death of the cash movement. This would not prevent us from doing the work, because I think it’s always very important.”