Money to the People: The Challenge of Financing Human Development

Abstract

The promotion of human development in sovereign countries, under an elected democratic government, can greatly benefit from information technology tools to direct monetary flows from the State’s financial system (Treasury, Central Bank, Sovereign and Green Funds, Public Banks) to the social infrastructure. Besides the regulatory framework and policy goals, a Central Bank Digital Currency should also serve as reference and support of special credit offered to the people by public and community banks (following the original proposal of Brown, Banking on the people: democratizing money in the digital age. The Democracy Collaborative, Washington, DC, 2019), to promote the creation of cooperative and sustainable productive enterprises. In this approach, the state induces effective demand by creating means of benefits for the poor, as suggested in working papers published by the International Monetary Fund on (Universal) Basic Income, which are endorsed by many authors, per Standing and Orton (Development and basic income: an emerging economic model. In: United Nations (Org) The ins and outs of inclusive finance: some lessons from microfinance and basic income. UNCTAD (United Nations Conference on Trade and Development), 2018) on the basis of the success of the Brazilian Bolsa Família program. In this chapter we propose a general and more current mechanism for the expansion of the existing monetary system with new features to enhance access to financial resources, leveraging the state-issued digital money to the people, putatively reducing economic inequality and boosting productive enterprises more compatible with current socio-ecological standards as well as inclusion. The selection of qualified projects, performance metrics and audit procedures should be made by a committee of experts recognized by peers in their professional communities, as to prevent issues related to fraud, abuse and waste. The goal of the social budget should be exclusively the promotion of human development, such as generating jobs, producing income, ecological stability and improved quality of life.