Monetary incentives play crucial roles in social change. Different sorts of monetary incentives are given including cash transfers, tax incentives and subsidies. These programs — which encourage individuals and/or organizations that achieve certain goals related to the desired social change — aim to encourage behaviors or actions and address a range of issues including poverty alleviation, environmental conservation and public health promotion. Such incentives are given in different developed, developing and less developed countries including, but not limited to, the United States, Canada, Germany, India, South Korea, South Africa and Brazil. For instance, the government provides grants for social enterprises in the United Kingdom and Sweden provides subsidies for businesses that implement sustainable practices.
It is notable that the effectiveness of monetary incentive programs in social change has been widely debated among policymakers. While some argue that financial rewards motivate individuals and organizations to adopt desired behaviors or actions, others say that intrinsic motivation is more sustainable in promoting long-term change. Though the success of monetary incentive programs depends on the specific context and target population involved, such programs mostly bring positive outcomes. Monetary incentives have helped adopt new behaviors, support certain causes and sustain long-term commitment and involvement in social change efforts in many countries by providing tangible rewards for individuals’ contributions. For example, the use of Cash Transfer Programs has helped reduce poverty rates and promote social inclusion among different groups in Brazil.
But there are diverse limitations to providing monetary incentives in different countries. The lack of transparency in the distribution of funds, unequal access to opportunities for all participants and limited accountability measures to ensure that funds are used effectively are crucial flaws in monetary incentive programs. Additionally, legal regulations and inefficient government systems or complex bureaucratic processes impact the implementation of monetary incentives. For instance, complex bureaucratic processes hinder the effectiveness of these incentives in driving social change in several countries including Brazil, South Africa and Mexico. Many developing and less developed countries have also limited financial resources that limit options and put hindrances to the effective implementation of such incentive programs.
Monetary incentives often do not address the root causes and sometimes help inadvertently perpetuate the existing inequalities — hindering long-term impact and sustainability. For example, offering tax breaks to corporations for hiring diverse candidates does not address the root causes of discrimination and the lack of workforce diversity. Moreover, and importantly, monetary incentives are not given, or are given less, in many crucial aspects. For instance, monetary incentives are given less to startup initiatives and the social integration of criminals including organized/gang criminals which has the potential to help many criminals leave criminal activities in different countries. Consequently, such incentives do not bring the desired outcomes in many countries.
Effective policies and other steps need to be taken in different countries to address the limitations of providing monetary incentives and their implementation. But it is also crucial to increase the scope of such incentives especially direct cash incentives to bring the desired outcomes in social change in diverse aspects in many countries. Collaborating with stakeholders and experts can help tailor financial incentive programs to better align with the specific needs and preferences of each country and bring better outcomes. Along with the government, private and non-government organizations also need to play greater roles in different countries including less developed countries.
Amir M Sayem
Chief Editor
Dhaka Opinion Magazine
