The idea of a UBI (Van Parijs, 1995) is not new, having been theorized since the eighteenth century, namely by Thomas Paine in ‘Agrarian Justice’, where he proposed a UBI in the form of a land dividend. As such, it is rooted in an idea of granting everyone an amount based on people’s shared ownership of a given resource, such as land (Standing, 2019). Since then, the idea has evolved, particularly in the twentieth century, with economists from across the political spectrum proposing some form of dividend (Cummine, 2016) or negative-income tax (Friedman, 1962). Albeit different, the idea of a negative-income tax shares some similarities, namely in outcome, with an idea such as a UBI (Friedman, 2000). The twentieth century saw the first surge in UBI experiments, particularly in North America. Between 1969 and 1980, several large-scale trials of a negative-income tax were implemented in cities across the United States of America, followed by a similar trial in Canada around the same time. Since then, and up until recently, several experiments have taken place, from basic income pilots in the Global South, such as in India or Namibia, to guaranteed income experiments in Finland, The Netherlands, Barcelona or the United States of America.

While there is strong literature on the moral value of implementing a UBI, discussing both objections to the policy but also how it can be superior to other mechanisms to promote freedom for everyone, there is only a nascent literature on the costs and ex-post benefits of implementing a UBI (Merrill, Neves and Laín, 2022; Van Parijs & Vanderborght, 2017; Pereira, 2017; Standing, 2017; Widerquist, 2018). As such, this project aims to contribute to this knowledge gap, while also taking into consideration the arguments from the ongoing moral debate on UBI, but also the evidence stemming from the increasing number of UBI and guaranteed income pilots taking place all over the world (Merrill & Neves, 2021a, Merrill & Neves, 2021b). As such, this project not only continues and inherits the rich legacy and network of the pre-existing and FCT funded project on UBI experiments – the UBIEXP project, coordinated by Roberto Merrill, the PI of this project proposal– but it also contributes in a novel way to the ongoing literature on UBI, by advancing the policy development proposals (Merrill, 2021) and transdisciplinary efforts, which were previously accomplished. 

While most of the arguments for or against a UBI are unrelated to the question of how to finance a UBI, there is a standard objection to UBI that claims the impossibility of funding it in a sustainable manner. However, the financial objection is a highly contextual one that depends on the economic structure of a given country (or city), its benefit systems, the number of people who are eligible and the tax system. As a World Bank report on the feasibility of UBI pointed out: “Decisions about a UBI should come in conjunction with decisions about its financing, as alternative financing options can have quite different macroeconomic, fiscal, and distributional effects that could reinforce or offset those of the UBI. Those effects would reflect a range of economic, demographic, social, and institutional factors that will likely prove highly country specific” (Ter-Minassian, 2019).

The debate on the cost and benefits of implementing a UBI is still relatively new (Hoynes & Rothstein, 2019; Hartley & Garfinkel, 2021). Karl Widerquist and George Arndt have recently written an article where they compute the potential costs of implementing a basic income in the United Kingdom, taking into account both the tax and benefits system in the country. The results show a basic income is a viable policy option, albeit expensive (Widerquist & Arndt, 2020). Richard Pereira has also written a book on the possibilities to finance a UBI, taking special attention to the costs of maintaining high poverty rates (Pereira, 2017). Jordi, Raventós and Torrens have also published simulations of how much a UBI could cost for a particular province in Spain (Arcarons, Pañella, & Mèlich, 2014). Finally, there have been some studies looking at qualitative options to consider the cost objection to UBI (Ter-Minassian, 2019; Parliamentary Budget Officer, 2020). 

​However, there is little knowledge on the actual costs and benefits of implementing a UBI in many of the contexts where it is currently being considered. In Portugal, for example, there is one study looking at potential costs of a modest UBI (Teixeira, 2019). Moreover, many of these studies do not consider how a UBI would interact with tax and benefit systems, which are crucial to the understanding of the cost of such a policy. Perhaps even more important, they are not including the ex-post benefits (and potential costs) of implementing a UBI in the medium and long run. New financing sources to augment the UBI proposal have also only very recently been analysed, developed or considered in conjunction with UBI, and those will be quantified for Portugal. These include high and increasing land values and other natural resources, the novel use of carbon pricing in some jurisdictions, and many other new revenue-generating proposals that work together to protect the commons and simultaneously provide financing for UBI. Comparative use of Sovereign Wealth Funds across dozens of jurisdictions will also be employed in the project, in order to determine the potential of using these finance and savings vehicles for UBI and other public goods for current and future generations of Portuguese.