Monday, February 18, 2013

In-Kind Benefits


In-kind benefits are goods and services provided by the government to needy individuals and families. Caring for the needy and giving them the chance to live decent lives should be a government priority. When the poor and most vulnerable get protection from the government, society will feel energized and united collectively and crime and lawlessness will decline. The political concept of communism failed mainly due to the lack of coherence and the marshaling of unworkable economic programs such as collectivization that abused individual and labor force in the former Soviet Union. Under strongman Joseph Stalin (1878-1953), life in the former Soviet Union was unbearable for millions. Non-social cash benefits or privileges have been in use in Russia for sometime until beginning 2004 when social unrest became widespread due to government changes in social benefits (Alexandrova & Struyk, 2009). Helping the poor is a good act and a public good.

Programs like Food Stamps and Women, Infants, and Children (WIC) are provided to people in need. In-kind benefits repel violence and crime, malnourishment and food shortages among the poor who may either be disadvantaged, helpless, unemployed, disabled, or stranded wayfarers. Besides the United States, in-kind benefits are available in many democratic countries such as the United Kingdom, Sweden, England, Finland, Denmark, Norway, Germany, and many other democratic countries including Canada, Australia and New Zealand. In poor undemocratic countries, governments mobilize the international community mainly when there is an epidemic or when there is massive drought that decimates human and animal lives. Russia’s use of cash benefits to care for the disabled and the elderly brought about inefficiencies in the labor market, reduction of retirement age in communist countries, and welfare traps instead of stimulating the labor market (Alexandrova & Struyk, 2009).

Since it is hard to govern a hungry population, governments have a responsibility to ensure goods and services are delivered even to the most impenetrable, out-of-reach locations by contracting philanthropic institutions and religious organizations. The fight against hunger should be every caring government’s main concern. The in-kind benefits that are open to the needy include canned, dry, and cold foods, and fruits and vegetables that can be bought from grocery and outlet stores, mega stores, or city markets that are usually open to the public on weekends and have contractual agreements with the government. Purchases can be made with state or federal government issued vouchers. According to Hyman (2011), assistance to the poor has been found to attract political attention mainly when a particular issue is being voted on.

While it is a humanitarian gesture for a government to care for the needy, cases of abuse of goods and services abound in almost every state, locality, or municipality. Corrupt in-kind benefits recipients at times entice grocery owners to transform the vouchers into cash. In such cases, the grocery store owner demands extra interest payments for the services rendered. Thus, if an in-kind benefit recipient receives $100 from a grocery owner, in return, he or she will have to add an extra $20 when making repayment. To overcome fraud of this magnitude, state agencies employ tactics that infiltrate fraudsters leading to many arrests. Magistrates or judges handling such cases often take drastic judicial actions that include heavy fines, cancellation of in-kind benefits transactions, and closure of businesses.

In-kind benefits are more prevalent than cash benefits because of the fear of alcoholism and drug dependency. If recipients are given cash instead of the in-kind benefits, beneficiaries may not purchase food as expected by the state or government. However, there are those who are in favor of cash benefits because of their belief in stabilizing the economy. Lowering unemployment and putting more people to work will bring down dependency on in-kind cash benefits to the able-bodied beneficiaries.

References

Alexandrova, A. & Struyk, R. (2009). Reform of in-kind benefits in Russia: High cost for a small gain. Journal of European Social Policy, 17(2): 153–166. doi: 10.1177/0958928707075204.
Hyman, D.N (2011). Public finance: A contemporary application of theory to policy. Mason, OH: South-Western, Cengage Learning.

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