17. Basic Income by Default: Lessons from Iran’s ‘Cash Subsidy’ Programme

Karshenas and Tabatabai consider Iran’s nationwide, universal cash transfer programme, which was launched in December 2010 as compensation for massive cuts in subsidies that led to increased prices for energy and other basic products. The authors describe the unusual manner in which the programme emerged, and its potential lessons. Of particular interest is the impact on incomes and expenditures, labour supply, inflation, income distribution, and poverty, in the immediate aftermath of the launch of the programme, as well as its implications for similar schemes such as financing a UBI by carbon taxes. Given an extremely adverse broader environment however, the programme, while still continuing after eight years, has lost much of its lustre as the purchasing power of the transfers has been largely wiped out through inflation.