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Want to Fight Poverty? Just Give the Poor Cash

A taxi driver counts a bundle of Kenyan shilling notes in Mombasa, Kenya
A taxi driver counts a bundle of Kenyan shilling notes in Mombasa, KenyaPhotograph by Trevor Snapp/Bloomberg

A new study by economists at Harvard and from MIT suggests that the best way to fight global poverty (PDF) is simply to give people cash and let them spend it however they want. The study was conducted with Innovations for Poverty Action, with funding from the National Institutes of Health Common Fund.

The research focused on households in rural western Kenya, where nearly two-thirds of people report not having enough food in their house for the next day. An average equivalent of $720 was given randomly to recipients through the mobile banking service M-Pesa.