Types of help

Two papers have surfaced recently on the effectiveness of aid. I use the term ‘aid’ loosely as one type of aid is intended to help the economy and another is intended to lift the fortunes of women running microenterprises. The stimulus paper tells us that the one-time stimulus payments of 2008 boosted spending by more than the reduction in withholding 2009. The microenterprise paper tells us that in-kind grants did more to increase profits for small businesses than cash grants. Both papers, however, tell essentially the same story, that how people are given money affects the way that they use it, and thus how useful it will be in terms of attaining certain outcomes.

A dollar is not just a dollar, particularly when there is a specific policy goal in mind.

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