Unconditional handouts benefit recipients—and their neighbours too

ECONOMISTS HAVE long argued that people should give each other money rather than gifts, since it is hard to know what others truly want. Though they have failed to ruin Christmas, a study in Kenya shows how they are changing the war on poverty by encouraging cash handouts to the poor.Of 142 countries in a database compiled by the World Bank, 70% now use unconditional cash transfers as part of their welfare programmes. About 40% have conditional payments, in which recipients must fulfil certain obligations, such as getting their children vaccinated or enrolling them in school. Brazil’s , launched in 2003, is now the world’s biggest such scheme. It helped slash the country’s extreme-poverty rate from 9.7% to 4.3% in a decade. China’s unconditional cash-transfer programme, , boosts the incomes of 69m people, according to the World Bank, though many poor households miss out because of corruption and red tape.