Development Economics

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A mere improvement in access to basic facilities does not ensure their provision to the poor. However, Cash incentives can help them avail the already available health and education facilities in the economy while the government works on institution building simultaneously. Cash incentives could be used as initial building blocks to aid better economic conditions by narrowing the income gap between the rich and the poor.

Improvements in facilities and provisions takes time, energy and resources. In the long run, this may be an effective approach to decrease poverty, however cash provisions can bring about a larger benefit in the shorter run to alleviate the problems of the poor. Additionally, cash provisions can fill the gap between the rich and the poor quicker than development of facilities. It takes time to develop institutions and infrastructure and although it is true that the statement might hold in the long run; it doesn’t so in the short run. It is imperative to understand the importance of health care, accessibility to food, education and other basic necessities which these individuals are deprived of hence, to meet the needs of the people; the government must give them cash incentives to fulfil their needs and make themselves self-sufficient while also allocating a part of the budget to the development of institutions and infrastructure. By giving some cash benefits to poor like income support scheme, the government can side by side aware them on saving the amount to invest it in future. That would help in keeping law and order, which would finally lead to political stability and then a mix of domestic and foreign investment can be injected to better the access of basic facilities to the poor people of Pakistan.