Облік і фінанси (Jun 2024)
To UBI or Not to UBI? Universal Basic Income Creating Value in Rural Areas of Romania
Abstract
People below the poverty line need financial support to meet their basic needs. One type of support is Universal Basic Income (UBI), which is paid to all adults individually, without means-test or work requirement. This paper investigates the effectiveness of basic-income social policies in rural areas of Romania. The author has analyzed possibly the longest-running Universal Basic Income program created by a non-governmental organization. This social experiment has been running for more than fifteen years and counting. Once a thriving bulwark of socio-economic stability in the country, rural areas grapple for decades with the tsunami effect of ill-fated socio-economic reforms of the ’90s, which dragged the rural economy and its people into a vicious cycle of poverty. Constant economic migration, depopulation, lack of basic needs, and a generation of orphans – the byproduct of economic migration and lack of education – constitute the new dire reality of a once prosperous blend of small economies. Under these circumstances, providing unconditional guaranteed income, independent of any other revenue streams, seems a natural way to alleviate the effects of systemic, multidimensional poverty. With mostly non-existent government programs and a weak business sector, the responsibility for such targeted interventions rests on the shoulders of third-sector organizations. The study’s results prove that such programs’ impact and benefits far outweigh their monetary costs and the stigma associated with “social welfare” proposals. Reframing the concept of UBI allows for creating more perfect baselines, a better way of measuring the needs, and means to fulfil these needs more effectively. This, in turn, drives the creation of a more powerful (and meaningful) set of tools for assessing these needs to meet the demand adequately.
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