"I’m going to save all the money I get and spend it on my son’s wedding.”"
...
“But it’s a middle-class prejudice that the poor don’t know how to use money sensibly."
I don't want to sound like a "middle class prejudiced person" but spending all the saved money on a wedding doesn't sound very sensible to me.
An indian wedding is not just "a wedding" -- it's a huge social event that defines the social standing of a family in their community. A successful wedding will result in increased respect and trust for family members, which will likely have a direct economic impact: people will be more likely to lend you money at a favourable rate, they will entrust you with responsibilities and money (i.e. good jobs) and so on. It's also a great occasion for networking per se. In many rural communities, not just in India, wedding ceremonies are often an investment, not a cost. Think of it as a huge PR event where people are basically forced to attend (not attending a wedding of somebody you know, after being invited, is very disrespectful) and where you can sell them stuff while they enjoy themselves.
A huge dowry, now that is a waste of money, but it's not mentioned in the article.
I know perfectly well, which is why I think the dowry system is terrible as a whole and should be banned. It might have been a sort of incentive not to kill your own daughters (which is what used to happen in China, for example), but it's 2013 and even rural Indians now know women have their own unique strengths and will benefit their own family. Dowries are a terrible tradition that have no beneficial effect whatsoever for economy and society, and the sooner they are stopped, the better.
Also in this article that seems sensible to me. Spending on higher quality foods, medicine, sewing machines, blankets, savings, starting businesses and even the occasional "luxury" like a TV or wedding.
"... in villages receiving payments, people spent more on eggs, meat and fish, and on healthcare. Children’s school marks improved in 68% of families, and the time they spent at school nearly tripled. Saving also tripled, and twice as many people were able to start a new business."
"...one showed the sewing machine she had saved for over a year to buy, another proudly announced she had nearly finished paying for her family’s television set, and another held up a 300-rupee blanket for the winter, of far better quality than the one it replaced..."
Sounds like overall they are responsible about what they spend on.
You cherry-picked that example. (Plus took it out of context—the quote talks first about food and medicine.) But even granting the point completely, the presence of such outcomes in a scatterplot says nothing about whether the approach is beneficial or not on the whole.
I find it exciting that this is at least partially amenable to objective experimentation. Why not try it and see? It takes a pretty rigid ideologue to not be open even to that much. (Not talking about you there, but about "they'll only spend it all on drugs" and so on.)
Yes, it doesn't sound sensible. But you are already biased by the situation presented. But look at it from a perspective of a Indian instead of just a poor person.
In India, plenty of social standing comes from willingness to spend on lavish events/customs - like weddings - to entertain friends, family, guests.
So, there is value. Of the social type.
That's the problem with many current social welfare systems - the poor are dictated by the types of aid is given to them. We rather have an overhead of up to billions of dollars obsessing over procedures, checks, regulations etc to ensure "unacceptable" outcomes do not occur.
And in there is the tendency for corruption, fraud, etc.
I don't want to sound like a "middle class prejudiced person" but spending all the saved money on a wedding doesn't sound very sensible to me.