The increasing inequality, constricted labour markets and diminishing prospects of dignified livelihoods for millions of vulnerable people worldwide have created a need for policy initiatives that break with traditional welfare, protection and redistribution policies. Hence, the nascent popularity of universal basic income (UBI) grants as an ideal (or idealized) tool of social policy. These publicly funded transfers would be given unconditionally and indiscriminately to all citizens without conditions or complicated means testing procedures. The policy alternative suggested by a UBI is dominating in varied debates and has garnered mixed reviews. Supporters argue that a universal basic income would efficiently and simply address deprivation, poverty, growing inequality and social fractures. The income would not only protect the vulnerable, without vast complexities of&nbsp;<a href="https://www.monash.edu/business/marketing/marketing-dictionary/t/targeting-strategy"> targeting</a> or <a href="https://dictionary.cambridge.org/dictionary/english/means-testing">means-testing </a>&nbsp;procedures, but it would also boost social cohesion and enable people to engage in creative and care-work without fear or concerns. Sceptics, however, disagree arguing that beneficiaries of a UBI will not work, save, nor strive to better themselves.
<h3>Arguments</h3>
Nonetheless, the existing evidence supports the argument of proponents not opponents of UBI.
<ul>
<li style="text-align: justify;">UBI will make people work less: Banerjee et al. (2017) re-analyze the results of seven randomized controlled trials of government-run cash transfer programmes from six countries worldwide to examine their impacts on labour supply. Across the seven programmes, they found no systematic evidence of impact on either the tendency to work or the overall number of hours worked, by either men or women.</li>
<li style="text-align: justify;">UBI will make people spend their easy money on the wrong things: Bastagli et al. review evidence on the effects of cash transfers on individuals and households through a literature review from 2000 to 2015, covering 201 studies (Bastagli, et al., 2016). They report increases in household food expenditure, school attendance, use of health services, dietary diversity, savings, livestock ownership, and purchase of agricultural inputs. A pilot study of UBI in eight Indian villages reports similar findings. Evans and Popova study evidence from 19 studies that surveyed whether respondents reported they used transfers to purchase temptation goods (Evans &amp; Popova, 2016). They found no significant impact of transfers on expenditures such as alcohol and tobacco.</li>
<li style="text-align: justify;">UBI is wasteful because it is not targeted: Targeting cash transfers is both expensive and can be inaccurate. The transaction costs of identifying who should benefit and who should not are not insignificant. A lump sum for all citizens prevents inclusion and exclusion errors. These errors are a primary challenge when implementing contingent or means-tested welfare assistance programmes, including cash transfers. A UBI, as a lump-sum transfer independent of the behaviour and conditions (income, age, health, or family-status) of the recipient, circumvents the challenges of targeting. While there is no quantitative evidence on the issue of targeting, there are easily identifiable savings to be made by ending its costly procedures.</li>
</ul>
So, is this a populist trap or a progressive turn in public policy and spending? The answer is somewhere in the middle. Narrowing the conversation to considerations of social spending and the technocratic aspects of social protection would suggest UBI as a cure for all social policy ailments. Nonetheless, broadening the scope of UBI discussions to consider the political economy of work and labour markets, the legitimacy of power and the expectations of citizenship suggests caution. This essay does not argue for or against UBI in terms of fiscal constraints and in terms of national budgets but rather reflects on this mode of redistribution from the perspective of five tensions that are social, economic and political in nature.
<h3>UBI applicability and social, economic and political tensions</h3>
<ol>
<li style="text-align: justify;">The Political Tension: Providing all people with a regular cash payment may lead to a disruption of democracy. In struggling economies where there is inequality and/or widespread corruption, populists may use this tool to maintain their positions. In societies whereby citizens are alienated from public policy decisions, UBI could be viewed as a generous hand-out by a benevolent autocrat. The electorate, in a mature democracy, may reject the extravagance of this measure and prefer a fiscally responsible government. However, the provision of unconditional cash grants in Indonesia or Iran, for example, was introduced as compensation for structural economic reforms, while political capture was temporary. The ephemeral effect of cash may be due to inflation diminishing the value of money or to the normalisation of the idea of getting unconditional cash from the state. This payment may even become a source of resentment if the amounts given are too modest and if the provision of cash is in place of other public services.</li>
<li style="text-align: justify;">The Employment and Employability tension: UBI is constantly proposed by business leaders as a remedy for the diminishing supply of decent jobs in industry and services. Automation, artificial intelligence and the low returns on non-specialized labour have created uncertainty in labour markets. In Egypt, agricultural work and small land-holdings no longer provide an adequate income for farmers and workers. Itinerant and seasonal work, low wages, gig work, globalized production and service chains as well as the dissociation of wages and benefits have meant that work for millions is not a pathway to sufficiency or welfare. Therefore, introducing a UBI scheme may enable people to engage in work and thrive despite their poor and unstable incomes. But could UBI encourage markets to produce less work and rely on automation and artificial intelligence? Could de-linking income from work fracture or distort labour markets in an unforeseen way? Different labour markets will respond differently to these schemes. Informal employment patterns, globalized production chains, distorted wage structures and the role of the state in the economy are parameters that will determine the practicality and desirability of UBI.</li>
<li style="text-align: justify;">The Tragedy of State Capacity and the Luster of Technological Solutions: Angus Deaton identified poor state capacity as a key factor in the impoverishment of people (Deaton, 2015). Unconditional regular and untargeted payments do not require much involvement of inefficient, perhaps corrupt and usually over-staffed bureaucracies. Developing means-testing procedures and benchmarks for estimating entitlement of vulnerability is both costly and complex. While some people may be in both social and economic distress (a widowed, divorced, disabled, or elderly person), means-testing procedures and benchmarks could simply target those who fulfill the financial conditions only; thus, excluding all others who might be in dire need for welfare and social support. However, a successful UBI policy still needs state efficiency to target the poor and exclude the rich. A good universal cash transfer must be informed by a comprehensive and fair taxation database. The state can claw back money given to the rich through taxation.</li>
<li style="text-align: justify;">Demographics: There are very real concerns about the demographic implications of this policy tool. Middle and low-income countries that suffer from a large and growing population may find that UBI is an implicit incentive to population growth. The link between welfare and population is a well-acknowledged one whereby some countries have toyed with the idea of withdrawing state benefits from <a href="http://www.refworld.org/docid/46c403821f.html">the &lsquo;extra&rsquo; child</a> to discourage procreation. The implications of UBI on demography are difficult to predict: how will a UBI payment eliminate destitution and extreme poverty while functioning as a system of unchecked payments that may lead to a profusion of unexpected consequences? For that reason, population policy, including the rights of migrants, must inform the debate on UBI.</li>
<li style="text-align: justify;">Fairness versus simplicity? UBI is a simple idea but its implementation could risk the continuation of other forms of social spending. A UBI will not cover all the needs of people; yet, it can prop-up those who are near poverty or those who are temporarily unable to cover their costs of living. Yet, in every society, there are people who have absolutely nothing and are not sufficed by a UBI alone; therefore, they should also be entitled to public goods and services that would enable their survival. No amount of money can compensate the lack of affordable education, free health service, affordable means of transportation, a safe and sustainable environment, employee capacity building or unbound support needed by the unwell, elderly or disabled. Therefore, a UBI cannot replace social spending but rather should supplement it. Cash is not enough if other public goods and services are withdrawn, become unaffordable or are given in inadequacy due to low-state investments.</li>
</ol>
Alternative policies with a big price tag need socially and politically informed considerations and review. Universal basic incomes can only work if grounded in the political economy and social ecology of a society or country. It is a policy that makes sense only if it reflects the history of a nation and expresses how its people and politicians imagine its future. It is therefore not a simple and &lsquo;doable&rsquo; idea to import but a leap into a post-work future that can only be successful if made knowingly, democratically, and fairly.
<hr>
Further readings
<ul>
<li>
Banerjee, Abhijit, Hanna Rema, Kreindler Gabriel, and Olken, Benjamin A. &ldquo;Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs.&rdquo; The World Bank Research Observer 32, no.2, (2017): 155-184. <a href="http://dx.doi.org/10.1093/wbro/lkx002">http://dx.doi.org/10.1093/wbro/lkx002</a>
</li>
<li style="font-size: 10pt;">
Bastagli, Francesca, Jessica Hagen-Zanker, Luke Harman, Valentina Barca, Georgina Sturge, Tanja Schmidt and Luca Pellerano. &ldquo;Cash transfers: what does the evidence say?&rdquo; Overseas Development Institute. London, 2016. <a href="https://www.odi.org/sites/odi.org.uk/files/resource-documents/10749.pdf">https://www.odi.org/sites/odi.org.uk/files/resource-documents/10749.pdf</a>
</li>
<li style="font-size: 10pt;">
Deaton, Angus. &ldquo;Weak States, Poor Countries.&rdquo; Project Syndicate, 2015. <a href="https://www.project-syndicate.org/commentary/economic-development-requires-effective-governments-by-angus-deaton?barrier=accesspaylog">https://www.project-syndicate.org/commentary/economic-development-requires-effective-governments-by-angus-deaton?barrier=accesspaylog</a>
</li>
<li style="font-size: 10pt;">
David K. Evans and Anna Popova, "Cash Transfers and Temptation Goods," Economic Development and Cultural Change 65, no. 2 (2017): 189-221. <a href="https://doi.org/10.1086/689575">https://doi.org/10.1086/689575</a>
</li>
<li style="font-size: 10pt;">
Greenhalgh, Susan. Just One Child: Science and Policy in Deng&rsquo;s China. Berkeley: UC Press, 2008.
</li>
<li style="font-size: 10pt;">
&ldquo;Means Test.&rdquo; Investopedia. <a href="https://www.investopedia.com/terms/m/means-test.asp">https://www.investopedia.com/terms/m/means-test.asp</a>
</li>
<li style="font-size: 10pt;">
Research Directorate, Immigration and Refugee Board of Canada. &ldquo;China: Treatment of "illegal," or "black," children born outside the one-child family planning policy; whether unregistered children are denied access to education, health care and other social services (2003-2007).&rdquo; Immigration and Refugee Board of Canada, 2007. Retrieved from&nbsp; <a href="http://www.refworld.org/docid/46c403821f.html">http://www.refworld.org/docid/46c403821f.html</a>&nbsp;&nbsp;
</li>
<li style="font-size: 10pt;">
&ldquo;Switzerland's voters reject basic income plan.&rdquo; BBC online, last modified June 5, 2016. <a href="https://www.bbc.com/news/world-europe-36454060">https</a><a href="https://www.bbc.com/news/world-europe-36454060">://www.bbc.com/news/world-europe-36454060</a>
</li>
<li style="font-size: 10pt;">
Standing, Guy. Basic Income and How We Can Make It Happen. UK: Pelican Books, 2017.
</li>
<li style="font-size: 10pt;">
Van Parijs, Philippe and Yannick Vanderborght. Basic Income: A radical Proposal for a Free and a Sane Society. Cambridge: Harvard University Press, 2017.
</li>
</ul>

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