UBI Policy Effects Analysis - Why UBI is the Worst Welfare Policy?

Democracy 4 General Discussion
1

Policy Stats

UBI
30 PC cost to introduce

at min
5100 budget unit per quarter
Capitalist approval -10%
Socialist approval +12%
Poverty -10%
Wages +10%

  • this can subsequently…
  • increase Inflation up to +6% but will be minimal in most cases
  • increase Income of Poor by +7500£
  • increase Income of Middle Income by +3900£
  • decrease Productivity (-4%)

Income of Everyone by +4000£
Bureaucracy -1%

at max
18000 budget unit per quarter
Capitalist approval -30%
Socialist approval +24%
Poverty -40%
Wages +20%

  • this can subsequently…
  • increase Inflation up to +10% but will be in a range of +3 ~ +6% in most cases
  • increase Income of Poor by +15000£
  • increase Income of Middle Income by +7800£
  • decrease Productivity (-8%)

Socialism +10%
Income of Everyone by +14000£
Bureaucracy -3%

Child Benefit
18 PC cost to introduce

at max
2160 budget unit per quarter
Capitalist approval -7%
Poor approval +9%
Equality +20%
Parents approval +23%
Parents membership +7.5%
Liberal approval +17%
Income of Poor by +12500£
Income of Parents by +5500£
Population +10%
Socialism +6%
Gender Equality +9%

Food Stamps
4 PC cost to introduce

at max & 40% poor perc
840 budget unit per quarter
Health +5.2%
Income of Poor by 10500£
Poor approval +19%
Poverty -15%
Socialist approval +10%
Income of Farmers by +7200£
Farmers approval +3%
Equality +10%

Free Eye Tests
8 PC cost to introduce

at max
30 budget unit per quarter
Poor approval +10%
Capitalist approval -5%
Socialist approval +4%
Poverty -6%
Income of Poor by +250£
Retired approval +4%
Health +2%

Free School Meals
10 PC cost to introduce

at max & 40% poor perc
294.4 budget unit per quarter
Poor approval +5%
Health +7%
Socialism +4%
Poverty -8.5%
Parents approval +4%
Parents membership +3%
Income of Poor by +200£
Obesity -6%

Healthcare Vouchers
13 PC cost to introduce

at max
9000-a budget unit per quarter (expected to be around 7500)
Equality +10%
Poverty -10%
Socialism -13%
Private Healthcare +60%

  • this can subsequently…
  • increase Health a bit
  • decrease Equality (-6%)
  • decrease Unemployment (-4.2%)
  • anger Trade Unionist (-6%)
  • discourage Socialism (-3.6%)

Income of Everyone by +1700£
Capitalist approval +7%

HelicopterMoney
8 PC cost to introduce
can’t be used in EU countries, which don’t have sovereign currency

at 59% slider
no budget cost
Inflation +10%
Socialist approval +12.8%
Poverty -12.8%
GDP +8.6%
Poor approval +16.8%
Income of Poor by +19500£
Currency Strength -2.8%

Legal Aid
13 PC cost to introduce

at max
100 budget unit per quarter
Liberal approval +10%
Poor approval +3%
Socialist approval +3%
Equality +6%
Income of Poor by +6000£

Minimum Wage
22 PC cost to introduce

at 70% slider
no budget cost
Income of Poor by +5800£
Poverty -8.5%
Unemployment +1.9%
Capitalist -6.4%
Equality +1.4%
Socialist approval +15%
Uncompetitive Economy +5.8%
Corporate Exodus +4.9%
Socialism +4.8%
Wages +12.4%

  • this can subsequently…
  • increase Inflation up to +7% but will be minimal in most cases
  • increase Income of Poor by +9300£
  • increase Income of Middle Income by +4836£
  • decrease Productivity (-5%)

Rent Control
4 PC cost to introduce

at max
3 budget unit per quarter
Poverty -6%
Socialist approval +8%
Capitalist approval -30%
Private Housing -25%

  • this can subsequently…
  • increase Income of Poor by +10200£
  • increase Income of Middle Income by +3000£
  • increase Equality (+2.5%)
  • encourage Socialism (+1.5%)

Income of Poor by +13500£
Income of Capitalist by -19500£

Rural Development Grants
13 PC cost to introduce

at max
600 budget unit per quarter
Income of Poor by +22500£
Unemployment -15%
Equality +14%
Farmers approval +24%
Farmers membership +5%
GDP +5%
Car Usage +5%
Rail Usage +8%

School Vouchers
9 PC cost to introduce

at max
5400 budget unit per quarter
Private Schools +60%

  • this can subsequently…
  • decrease Income of Poor by around -1800£
  • decrease Income of Middle Income by around -3600£
  • decrease Income of Wealthy by around -3000£
  • decrease Equality (-6%)
  • increase Education (around +18%)
  • decrease Unemployment (-7.8%)
  • anger Trade Unionist (-6%)
  • discourage Socialism (-3.6%)

Equality +5%
Poverty -5%
Socialism -13%
Income of Everyone +3000£
Capitalist approval +7%

State Healthcare
38 PC cost to introduce but most countries already have it

at max
9000-a budget unit per quarter (expected to be around 7500)
Poor approval +19%
Capitalist approval -12%
Wealthy approval -10%
Socialist approval +15%
Health +25%
Retired approval +16%
Unemployment -32%
State Employees approval +22%
State Employees membership +23%
Income of State Employees by +5200£
Socialism +5.2%
Hospital Overcrowding -45%
Private Healthcare -125%

  • this can subsequently…
  • decrease Health (-30%)
  • increase Equality (+10%)
  • increase Income of Poor by +1100£
  • increase Income of Middle Income by +2200£
  • increase Income of Wealthy by +3600£
  • anger Retired (-16%)
  • increase Unemployment (+7%)
  • please Trade Unionist (+10%)
  • encourage Socialism (+6%)
  • increase Hospital Overcrowding (+47%)
  • but these effects are expected to be weaker since Private Healthcare isn’t going to be 100% in most cases

StateHousing
13 PC cost to introduce many countries already have it

at max
1100 budget unit per quarter
Capitalist approval -12%
Poor approval +10%
Equality +24%
Socialist approval +20%
Poverty -17%
Income of Poor by +25500£
Income of Middle Income by +12000£
Socialism +3.5%
Private Housing -125%

  • this can subsequently…
  • increase Income of Poor by +25500£
  • increase Income of Middle Income by +12000£
  • increase Equality (+10%)
  • encourage Socialism (+6%)
  • but these effects are expected to be weaker since Private Housing isn’t going to be 100% in most cases

StatePensions
19 PC cost to introduce many countries already have it

at max
10600 budget unit per quarter (expected)
Capitalist approval -12%
Socialist approval +12%
Retired approval +60%
Retired membership +9%
Poor approval +19%
Poverty -20%
Income of Retired by +20000£
Socialism +4%

State Schools
30 PC cost to introduce many countries already have it

at max
5400 budget unit per quarter
Poor approval +15%
Socialist approval +18%
Education +35%
Poverty -18%
State Employees approval +14%
State Employees membership +29%
Income of State Employees by +6500£
Unemployment -39%
Socialism +3%
Parents membership +2.5%
Capitalist approval +10%
Corruption +3%
Private Schools -125%

  • this can subsequently…
  • increase Income of Poor by around +3000£
  • increase Income of Middle Income by around +6000£
  • increase Income of Wealthy by around +5000£
  • increase Equality (+10%)
  • decrease Education (-30.7%)
  • increase Unemployment (+13%)
  • please Trade Unionist (+10%)
  • encourage Socialism (+6%)
  • but these effects are expected to be weaker since Private Schools isn’t going to be 100% in most cases

UnemployedBenefit
25 PC cost to introduce many countries already have it
Capitalist,-0.01-(0.08x) Unemployment,0+(0.1x),8 Poor,0.1+(0.3x) Socialist,0+(0.13x) PovertyRate,0-(0.12x) _LowIncome_fixed,500+(7500x)Unemployment _global_socialism,0.01+(0.06x),2

at max & 50% unemployment
714 budget unit per quarter
Capitalist approval -9%
Unemployment +10%
Poor approval +40%
Socialist approval 13%
Poverty -12%
Income of Poor by +4250£
Socialism +7%

Analysis

  • Budget: even 5100 is pretty expensive. There are so many cheaper options that can appease socialists & eradicate poverty. Maxed UBI costs way more than that (18000) and is definitely going to put a massive financial burden. You may be able to raise finance it by scrapping state pensions and cutting expenditures from state healthcare/schools but what you get will be slightly lower poverty & bureaucracy.
  • Income Effects: Even income effects aren’t that impressive. I’m not going to argue “you don’t get anything from higher income” or “it is actually better to keep voters in poor status as they are easier to appease” kind of things. Someone might want to become an ideal leader who wants every people to live well off. If you want to at least bump the poor to middle class, you can just use Child Benefit (89% effect with 12% cost), Food Stamps (75% effect with 4.6% cost), or Helicopter Money (even better at boosting poor earnings). Do you want Middle Income to be richer too? Here comes State Housing - with direct poor +25500 & middle +12000 income boosts (possibly more from shirking private housing :P) and costs only 6% compared to maxed out UBI.
  • Equality: UBI doesn’t really improve Equality while many other socialist policies do. Massive budget cost of UBI makes this even worse. You are very likely to damage Equality in your efforts to raise money it requires.
  • Wages: This is one of few aspects UBI might shine. +20% wages is kinda unique for not only welfare policies but also economic policies. If it was pretty difficult to boost wages, this would have been a strength of UBI. But, unfortunately for UBI, that’s not the case. If you are playing socialistic, you can boost wages to 90+ range quite easily. Also, higher wages mean higher inflation. This makes UBI worse than Helicopter Money since you can get what you would want from it with just +5~10% inflation.
  • Bureaucracy: Okay this is truly unique effect of UBI. You can reduce Bureaucracy pressure with UBI and can expect even more by scrapping some anti-poverty only policies. But you can do the same by abandoning some of your policies and, by using UBI, you are likely to do so anyway as you will be desperate in money. So I don’t find this to be an advantage of UBI.

Conclusion

Comparison between Helicopter Money (60% slider) and UBI makes it clear - UBI is less efficient in terms of effect/inflation compared with Helicopter Money, which is literally a trade-off between benefits & inflation. Nontheless, I’m not going to dive direct into “UBI needs a buff.” UBI is a pretty experimental policy IRL and it’s not like a videogame should treat all policy options equally. Still, I’d say that making UBI more useful at least in some specific conditions would be an improvement. The reasons that make UBI the worst welfare policy in D4 aren’t entirely tied to the flaws of UBI. I find other policy options in comparison were way too overpowered and made UBI way too worse.

I’m not sure where adjustments should start from but have thought that the issue itself it worth addressing. So, if you are interested or have an idea/opinion/etc., leave a comment! I will too return here if I happen to come up with possible suggestions.

2 Likes
2

Very interesting analysis, thankyou. UBI is very difficult to model, partly because many people who support it REALLY support it, and see it as a magic solution to everything, which I suspect it is not.
I find an accurate model hard because there are basically two versions of UBI, depending on its level:
At a low level, its basically an anti-poverty measure that has a benefit of super low administration costs, and has a ‘peace of mind’ benefit to people knowing that they will always qualify for this minimal payment.

At a higher level, when it crosses a threshold, it becomes an alternative life choice. At this level, people who previously had extremely badly paid jobs, that they hated. (My goto example is people cleaning nightclub washrooms), decide to quit the job and live on UBI instead.

Obviously not everyone would do this, and UBI has to be high for it to be viable, but I think the effects of that level of UBI are starkly different to its effects at a low level.

Also, its a nightmare to model any policy that is mostly theoretical and has not been applied in the long term on a national basis, AFAIK.

3 Likes
3

Yeah, to be fair, I think opinions of UBI supporters need to be taken with a pinch of salt. I’m not even sure lower administrative cost is a thing. It could be significantly easier to handle compared to some poor-specific welfare provisions or unemployment benefits, which require screening by definition. But I’m not really worrying about Bureaucracy when implementing welfare policies. Instead, it makes me ponder whether I should use micro policies such as recycling, business startup, social justice foundation, co2 campaign, or carpool campaign. Maybe some welfare policies should be heavier in admin burdens so that replacing them all with UBI might sound okay?

On higher-scale, long-term effects, I definitely understand that. Saying what would happen there would be more of prophecy rather than forecast. It’s even harder to tell than whether automation & AI will lead to mass unemployment or not. I don’t really expect such in D4.

4

The only problem with having different admin properties per policy is that its very arbitrary. It depends so much on the implementation specifics, and indeed the bureaucratic culture in each country.
Italy seems capable of turning everything into bureaucracy hell.

5

Thanks for the detailed analysis, you went deep on this.

2 Likes
6

From a gameplay perspective it makes sense that UBI is currently designed to urge the player back to using other kinds of subsidies

But as a simulator / sandbox, it’s not very rewarding since there is no visible effect of any kind;

For example; I understand that all incomes go up linearly and therefore the income distribution doesn’t change, but that’s not very fun.

A possible low-brow solution is to use the world average to calculate relative income instead, this would be rewarding visually, because people would move up the income scale, but not introduce any new mechanics or complexity to the simulation itself.

7

But yes, in general the simulation is pretty light right now on automation, unemployment, and UBI; things like ‘the mars program’ are catch-all mechanics to address this, but in general there’s not much to do after a few decades in the simulation, and even a ‘everyone is Star Trek level wealthy now, the end’ or ‘everyone has moved to mars, the end’ would force me to start a new (more challenging) playthrough instead of endlessly toying with the mechanics at the far end of time, in general, my satisfaction as a player would be higher being forced back into new playthroughs with some sort of forced ‘endings’ to the simulator

8

If UBI is implemented as the current or 2020 current popular understanding of how UBI works, I can understand why implementing such would be ineffective, uninteresting, of little consequence, etc. Because as UBI was conceived, it was never intended to be a means of funneling a fixed amount of money to everyone below an arbitrary income level – that, in my opinion, is ridiculous.

If, instead, implementing UBI were to overlay a Rawlsian formula for Universal Basic Income, then you would be implementing something that could produce much more dynamic & meaningful results. I would suggest to experiment with something like John Rawls of Harvard conceived – UBI as a Social Safety Net. Something like ~"those who are most well off in Society can only generate more wealth for themselves ONLY IF in doing so, all those who are least well off in Society stand to gain the greater share of increase in overall wealth; if not, wealth is not accumulated. In this sense, there is a theoretical ratchet effect that binds those most well off & those least well off. It doesn’t prevent Free Markets, it doesn’t prevent the overall acquisition of wealth. & UBI would be the means to distribute out this profit surplus…assuming there are those who could not meet the standard, it would nonetheless be forfeited through a tax requiring distribution. The baseline of those least well off would be established by the government – a minimal level no one in Society is allowed to fall below established on top of those programs derived from standard taxation.

Ideally, it would not be handed out to everyone into perpetuity; although there would be no restriction from allowing such. It would remove barriers for those who might otherwise be willing to take the risk of entrepreneurship. It would enable individuals to more easily take time off from their career for necessary education/credentialling. It would enable someone to live a very basic lifestyle that includes housing, food, water, internet, cell services, healthcare, or whatever Society can manage to provide. It’s just an agreement that Society makes with itself that says no one will fall below this X line no matter what. Even the failed Billionaire could count on being saved by the Social safety net ultimately. As those who climb out, the distributed amount would incrementally begin to taper off…in a means that still maintains motivation for continuing the climb out, & not the climb back in.

But, as far as the Anthony Wang model of UBI is intended to exist, that’s not how this UBI would work.