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Month: March 2020

UBI book review by G. Nycander

Last month, I was thrilled to present our new book on universal basic income at SIDA’s HQ in Stockholm, Sweden.

My discussant at the event was Ms Gunnel Axelsson Nycander from the Church of Sweden – she was eloquent, competent, committed, and thought-provoking. It was a pleasure to meet her and enjoyed reading her UBI book review.

The review defined the book as an “impressive piece of work”, and spent kind words on its welcome global nature and framing within a continuum of design options. It also included some points that deserve clarification, so in a spirit of transparency let me offer some personal reflections on the blog’s main critiques.

  • “The disadvantages of poverty targeting are not taken seriously”. The argument for this point centers on the claim that our simulations “… assume that poverty targeting is working”. That is incorrect – simulation results are based on actual targeting performance as emerging from survey data. The results indicate that under a *budget neutral* scenario, targeted approaches – even if imperfect – yield better outcomes. And note that by targeted programs we mean both needs-based programs as well as categorical schemes based on age. Put differently, age-based programs, like in South Africa, work better in a budget neutral scenario than a UBI.
  • “The arguments on universal lifecycle programs are not considered enough”. The book has been widely regarded a highly balanced product by both advocates for and opponents to universal approaches. Chapters 1 and 2 lay out, openly and objectively, the pros and cons of needs-based targeting (e.g., see p.29 on continuity of welfare distribution, poverty dynamics, etc.) as well as those of other schemes (e.g., see summary p.90-91). Video presentations of the book are also widely available and offer such balanced perspective (e.g., see this event when it comes to slide 14 on pros and cons of universality – where btw, we also speak of the redistribution paradox that “more of the poor may be less for the poor”).
  • On taxation. One cannot stress enough the importance of taxes, and as a Swedish citizen, I couldn’t agree more on the key role taxes play in generating demand for effective transfers and services. The book is clear about this point. We should be careful, however, in extrapolating lessons across widely different contexts, as well as assuming that more taxes translate automatically into more accountability and better services – on this point let me refer to the recent fantastic work by Moore et al on taxation in Africa. The blog concludes that “… over time, there should be considerable potential to increase tax collection in these countries”. We fully agree, and this what the book says (p.10): “[F]or example, if countries choose to expand categorical transfers (e.g., universal child grants), these could provide an area to inform a number of UBI-type questions. In the medium term, these quasi-UBI programs may help in better understanding the effects of bounded universality (including its financing) and help build more inclusive delivery platforms—all the while unlocking the potential for higher coverage.
  • “The glimpse of history” section is too short. I agree! The point was not to be comprehensive, but general in the stylized story – as an economist passionate for history, there is so much more we could say on the subject, we just didn’t have the ‘real estate’ for an extended treatment in this specific volume.
  • “The authors do not see social protection as a right”. Again, the book is very balanced and cautious when presenting all perspectives on the matter – see for example discussion on UBI and recommendation 202 (p.44) and human rights (p.45). This is what we say: “Whether a UBI is compatible with the objectives of the floor or not depends on how its design is aligned with the principles of Recommendation 202: if a UBI is designed to wholly replace most of the welfare system, including programs and services for special needs, etc., then it is clearly in contradiction with the floors. However, when a UBI is meant to strengthen and enhance the progressive provision of social protection, then the floors and UBI concepts are aligned. Such alignment occurs, for example, when a UBI is set at a benefit level to ensure at least a basic level of income security, complementary social assistance benefits are preserved for those with special needs, and financing is additional and nonregressive”.

Appreciate very much the attention of and discussion with Ms Nycander on our book, the work of the Church of Sweden and the hospitality of SIDA, and look forward to continue the conversation on these exciting and important theses.

Ugo Gentilini

p.s. the Church of Sweden is welcome to enclose this personal reply to the original blog as appropriate.