'The Myth of Welfare’s Corrupting Influence on the Poor'

Eduardo Porter tries to set the record straight on welfare's influence on behavior:

The Myth of Welfare’s Corrupting Influence on the Poor: ...Few ideas are so deeply ingrained in the American popular imagination as the belief that government aid for poor people will just encourage bad behavior.

The proposition is particularly cherished on the conservative end of the spectrum... But even Franklin Delano Roosevelt, the father of the New Deal, called welfare “a narcotic, a subtle destroyer of the human spirit.” And it was President Bill Clinton, a Democrat, who put an end to “welfare as we know it.” ...

And yet, to a significant degree, it is wrong. Actual experience, from the richest country in the world to some of the poorest places on the planet, suggests that cash assistance can be of enormous help for the poor. And freeing them from what President Ronald Reagan memorably termed the “spider’s web of dependency” — also known as forcing the poor to swim or sink — is not the cure-all....

Abhijit Banerjee ... released a paper with three colleagues last week that carefully assessed the effects of seven cash-transfer programs in Mexico, Morocco, Honduras, Nicaragua, the Philippines and Indonesia. It found “no systematic evidence that cash transfer programs discourage work.” ...

Still, Professor Banerjee observed, in many countries, “we encounter the idea that handouts will make people lazy.”

Professor Banerjee suggests the spread of welfare aversion around the world might be an American confection. “Many governments have economic advisers with degrees from the United States who share the same ideology,” he said. “Ideology is much more pervasive than the facts.”

What is most perplexing is that the United States’ own experience with both welfare and its “reform” does not really support the charges. ...