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Basic Income Studies

Ed. by Haagh, Anne-Louise / Howard, Michael

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The Basic Income Grant Pilot Project in Namibia: A Critical Assessment

Rigmar Osterkamp
Published Online: 2013-07-10 | DOI: https://doi.org/10.1515/bis-2012-0007


Since January 2008 a monthly Basic Income Grant (BIG) of N$ 100 (about US$ 15) has been paid to around 1,000 citizens of the Namibian village of Otjivero. (In January 2010 it is reduced to N$ 80.) The project is called a “pilot project”, because its intention is to convince the government to extend the scheme to the whole country. This article shares the view that a new approach to social policy in Namibia is indeed desirable, because poverty is severe and income inequality is very high in an international perspective. The article addresses two questions: First, are the design and the conduct of the project and the assessment of its effects in line with established standards of empirical socio-economic research? In other words, are the reported behavioral effects of the BIG in Otjivero convincingly derived? Second, did the project sufficiently address issues which are of particular relevance for an eventual positive political decision? The article comes to the conclusion that neither of the questions can be answered in the affirmative. At the end, the article derives recommendations for possible future BIG projects.

Keywords: basic income; Namibia; empirical research methods; conditional cash transfer


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About the article

Published Online: 2013-07-10

For the case of Iran, see Talabani (2011). The BIG in Alaska has, as far as I know, not been systematically studied.

All reports are downloadable from www.bignam.org.

Recently, the country has even been raised from “lower middle income” to “upper middle income” status.

According to a household survey of 2009/2010, see: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/NAMIBIAEXTN/0,menuPK:382303~pagePK:141132~piPK: 141107~theSitePK:382293,00.html

Since 2004, China has refused to publish official figures on income distribution. See: http://articles.marketwatch.com/2012-01-19/economy/30788275_1_income-gap-china-reform-foundation-gini-coefficient

The cautious word “allegedly” generally applies to Gini figures. On the theoretical–methodological level of statistical measurement, there is a variety of possibilities to implement the Gini concept. Moreover, the practical difficulties of raising the required information abound.

For many years, around 25% of the public budget has been spent on education.

Central Bureau of Statistics (2008).

A recent and rather comprehensive overview on social characteristics of Namibia (as well as on economic and political developments) is found in Christiansen (2011).

This is the Protestant missionary society United Evangelical Mission (Vereinte Evangelische Mission), which belongs to the German Protestant churches of Rhineland and of Westphalia. (The Mission has been active in Namibia since the beginning of the last century.) Other sponsors of the project are the German fund-raising institution Brot für die Welt (Bread for the World) and the Friedrich-Ebert Foundation, dependent on the German social-democratic political party SPD. The BIG project has published details neither about the sources of its financial means nor about the total costs of the project. What has been repeatedly said is that the money comes from national and international sponsors.

The Namibian President Hifikepunye Pohamba did so, for example, in May 2010, Prime Minister Nahas Angula in October 2009, in a Parliament speech and a press conference, respectively. Permanent Secretary Dr. Kalumbi Shangula (formerly at Ministry of Labour and Social Welfare) contributed critical arguments against BIG in newspaper articles, for example in Shangula (2011a,b). There is only one prominent politician who has publicly and repeatedly expressed his support of a BIG. This is the Minster for Trade and Industry, Dr. Hage Geingob.

Critical points about the methods employed in Otjivero are also raised in Shangula (2011b) and in Osterkamp (2010).

A sustained growth rate of 29% p.a. over four years (2008–2011) increases a monthly income of, say, 100 to an amount of 277 at the end of the fourth year.

Besides, if something was not fully captured, it is expenditures, not income.

See, for example: http://zunia.org/post/new-database-on-conditional-cash-transfer-cct-programs-in-lac/; http://dds.cepal.org/bdptc/; http://www.chronicpoverty.org/publications/details/social-assistance-in-developing-countries-database.

A recent example for positive – i.e. “non-lazy” – evidence of conditional cash transfers is the empirical study of Haagh (2011). But, there is quite a number of earlier empirical studies of similar results (see likewise Haagh, 2011). An example for a substantive theoretical work that can be interpreted in the same direction is Sharif (2003). One rare example – as far as I can see – for the attempt to draw lessons from conditional cash programs for unconditional schemes is Standing (2008).

There is not even a reliable registry of voters.

Allgemeine Zeitung (a German daily in Namibia), 7 May 2012. Author of the article is Clemens von Alten. Both quotations translated from German. http://www.az.com.na/lokales/otjivero-ohne-perspektive-im-dreieck-des-elends.147545.php

An online statement by Haarmann and Haarmann (2012).

After a description of the existing support system for vulnerable groups in Namibia, the author (see Footnote 11) comes to a negative conclusion: “It would make more sense to identify additional vulnerable groups and include them in this [i.e., the existing, R.O.] scheme rather than to advocate for … a parallel scheme.”

Besides the state pension, existing social security schemes in Namibia comprise payments for sick leave, maternity leave, permanent disability, death of a family member and orphans (see Social Security Commission of Namibia, www.ssc.org.na). Moreover, the government provides food aid and shelter to regions hit by flood or drought disasters. Also, see Shangula (2011b).

Such projects are run mainly in Latin America, but also in Turkey and in some East Asian countries. See, for example, UNDG (2010), ILO (2009), UNDP (2009) and World Bank (2009).

In the Resource Book (2005), the question of alternatives is explicitly taken up. In Section 2.11, the authors use eight lines of text to mention and dismiss possible alternatives.

See, for example, UNDP (2009) and World Bank (2009).

About 1.9 million individuals under the age of 60 multiplied by N$ 1,200 p.a. amounts to N$ 2.28 billion. This is 3.8% of a GDP of around N$ 60 billion (2010).

In 2010, total budget revenues stood at N$ 21.6 billion. Annual BIG payments amount to N$ 2.28 billion (see Footnote 25). Thus, total revenues would have to be increased by 10.6%. Currently, around one third of total revenues stem from SACU. That means, non-SACU revenues (i.e. revenues mainly from taxes and royalties) would have to be increased by 15.8%.

There are 13 administrative regions in Namibia. The population ranges from 70,000 to 340,000.

For relevant studies, see Footnotes 16, 22, and 24; moreover, Haagh (2011) and Standing (2008).

See also Section 4.2.

For a comprehensive treatment of theoretical and empirical issues of economic growth, poverty and distribution in the long-run, see, for example, Barro and Sala-i-Martin (2004) and the literature mentioned there.

Citation Information: Basic Income Studies, ISSN (Online) 1932-0183, ISSN (Print) 2194-6094, DOI: https://doi.org/10.1515/bis-2012-0007.

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