GiveDirectly Planning to Give $30M in Basic Income to East Africa
Interesting concept. I&#x27;ll be interested to see if it works.<p>I worked with a company building AC mini grids in East Africa. They connected around 130 households in each village to a 220V grid.<p>The expectation was that people would use the electricity for basic needs (e.g. light, cell phone charging) but also for productive uses (e.g. grinding grain to flour, air compressors, saws, etc).<p>The expectation was that as people entered the second phase of energy use (after basic necessities) their consumption would increase as their income increased.<p>What this company found though, was that very few customers followed this pattern. If people bought anything that increased their consumption, it was almost always a TV. This obviously didn&#x27;t improve their income, so often their use would actually decrease because they can&#x27;t afford the increased consumption.<p>Last I heard, they were having serious problems getting people in these villages to use more power.<p>Through some pricing campaigns, they discovered that people&#x27;s energy use was almost directly correlated to the price. If you made the price similar to other well developed countries ($0.10-$0.30 kWh) people would use lots of energy, but the amount they paid was still relatively small. If you raise the energy price, people use much less, but end up paying almost the same amount per month. So if it costs $0.25 per kWh people will use 4kWh, but if it costs $1 per kWh they&#x27;ll only use 1 kWh.<p>Since their model included batteries to cover the night load, they couldn&#x27;t afford to sell the energy this inexpensively. Hence their wish to increase day time energy use among the villagers through equipment use (e.g. welding, grinding).<p>My expectation from this program: some small percentage of people will use the money to invest in tools and means to improve their economic situation. The vast majority though will waste the money on things which benefit them in the short term, but provide no long term economic benefit to them (e.g. better cell phone, television, or maybe a solar home system)<p>Also from hearing the horror stories of doing business in East Africa (draconian regulations + corruption) I&#x27;m sceptical if anywhere close to 90% can make it into the hands of normal people. Hopefully this isn&#x27;t the reality...<p>Not sure why I&#x27;m getting down votes. I&#x27;ve worked with a company actually working in East Africa and I don&#x27;t see people using the opportunity of energy to improve their economic situation. After basic necessities they seem to use it for leisure.