Asymmetrical Information

"Aid to Africa is an excellent idea. If we can find reasonably competent and honest governments to give it to, I'm all for ..."

Of course, if these governments were reasonably competent and honest to begin with, chances are that particular country wouldn't need aid.

"Aid to Africa is an excellent idea".

Is it?

Is there any evidence that charity to Africa will create a net increase in utility higher than - say - charity to South America, or Southeast Asia, or - heaven forbid - investment in for-profit technology and factories here in the US?

I'm not raising an Objectivist "altruism is bad!" objection. I'm seriously asking wether there's any evidence that sending charity money to Africa accomplishes much good.

To me, it seems pretty close to flushing it down the toilet.

"The United States currently gives just 0.16 percent of its national income to help poor countries . . . "

Wrong. The United States spends 0.16% of GDP (not national income) from its federal budget on direct aid to poor counties. The United States spends about 0.7% of GDP on direct aid to poor countries, considering the $60 billion or so of remittances sent back there annually.

Then there's this: "What is 0.7 percent of the American economy? About $80 billion. That is about the amount the Senate just approved for additional military spending, mostly in Iraq."

Umm, am I the only one who sees the problem here? No, Pinch, the United States armed forces have never been used for the benefit of poor countries. Nope, they just all sit here, all year, every year, guarding the borders from marauding Canadians and Mexicans, and the coasts from piratical Japanese and Germans.

Does it count as "aid" when an influx of American corporate investment allows some people of poor countries to earn more money than before? Truly, is that the generally good thing that I think it is, or does it cause concomitant effects that wipe out the benefit?

Welfare did not work here, so why do you think it will work in Africa.

Jane, why do you even read the New York Times? It's America's Pravda. Why not read the Weekly World News instead? It's just as likely to be true, and a lot more fun.

And then there's the issue of private vs. public giving. I've seen it quoted elsewhere, but the U.S. citizens give a lot of aid directly through NGO's rather than pass it through the government. This same issue came up during the whole tsunami "Americans are cheap bastards" thing.

I don't have the statistics for it handy, but maybe I could just make some up.

I've got some better ideas. How about eliminating agricultural subsidies here that hurt African farmers? And leaning on the Europeans to do the same? How about paying African doctors and nurses to stay home where the need is genuinely greater rather than come over here where the grass is unarguably greener?

"Does it count as "aid" when an influx of American corporate investment allows some people of poor countries to earn more money than before? Truly, is that the generally good thing that I think it is, or does it cause concomitant effects that wipe out the benefit?"

Well, Jamie, the people getting the jobs like them, but there are always activists and nationalists that don't want poor people to be given those options. When I lived in Asia, I was surprised at how much people there disliked the anti-sweatshop movement, whose goal (in their opinion) was to stop people in poor countries from building the types of lives that the rich westerners already had.

I don't think I'd count it as aid, since the companies aren't doing it out of altruism, but that's exactly the point of the whole "invisible hand". Set up a good system, and good things happen without all of the nasty side-effects of charity. Give a man a fish....

"Aid to Africa is an excellent idea"?

I think it's an almost complete waste of resources. Africa has been coddled along for 30 years and made a hash of it. It's time that Africa solve its own problems. We simply don't have the knowledge or wisdom necessary to actually solve their problems rather than make them worse.

"Aid to Africa is an excellent idea"?

The transfer of money from the middle class in a rich country to the rich in a poor country. Fabulous idea.

It's like a farmer spreading seeds on stony ground. Maybe he can nurture a plant or two before a predator comes and eats it. But raise a crop?? Short of moving every African into Bono's neighborhood to be succored by Hollywood elites, the Africans have to solve the problem for themselves: get rid of warlords, get rid of
overt corruption, establish justice and property rights. Hard, yes? Let's not wait until July 4th to once again remember and appreciate our truly Greatest Generation, the Founding Fathers.

Yes, considering that that bill was about removing export subsidies considered illegal by the WTO, and replacing them with tax breaks considered okay by the WTO, that's incredibly dishonest.

Huh. The New York Times distorted several budgetary statistics to make the Bush Administration look bad. Meanwhile, in other news: water remains wet, Shaq is still one big dude, and Eric Gagne has a better-than-average fastball.

All of y'all that jumped on "Aid to africa is an excellent idea" seem to have conveniently ignored the next sentence, "If we can find reasonably competent and honest governments to give it to..."

That sentence effectively removes most of the objections (enriching only the rich in Africa, rather than helping those intended to be helped; past waste of aid ... to corrupt, dishonest, incompetent governments) presented. I mean, come on, people.

(On the other hand, the second sentence also means that Africa gets pretty much no aid, as things stand now, but that should suit you, under the circumstances, no?)

Do any of these comparisons of US vs EU charity/aid include private/corporate giving?

Re: Africa. As much as I disagree with his politics, Jimmy Carter was involved with a program that bypassed governments and directed low tech (fertilizer, techniques) agricultrual aid to Africa that had some success.

The only permanent solution to Africa's problems is capitalism. That will require opening up markets to them (as someone else suggested) and doing something about the horribly corrupt governments, while providing enough stability/security that someone equal to Mugabe, et al, doesn't step into the void. The U.S. currently doesn't have the military to do that, in addition to Iraq/Afghanistan/the Philippines/keeping an eye on Iran/NK, etc. And even if we did, it would just be used against us in the Muslim world. This would be a great opportunity for NATO/Europe to step up with some military muscle. SHort of that happening, Africa is doomed to continue on this path.

This "aid" nothing more then Bush paying Blair back for going corporate on the Iraq lie. I wouldn't send a dime to Africa. I wouldn't have sent a dime to the Tsunami victims. This administration is so full of it. They hold the American peoples feet to the fire with bankruptcy "reform", then they tell Africa not to worry about their debt to us. Jr should have given Africa the "ownership society" speech and raised the interest rate on their debt.

Nice job, Jane, but fish in a barrel, no?

This is a laughably bad editorial by the way, even for the Times, from the opening line ("Bush kept a remarkably straight face..") to the 2nd last paragraph, where the world's press is shown to have greeted Bush's offer "with scorn". Glad the NYT is on this breaking story - the world is unhappy with the US.

Not sure this editorial would be good enough for a college newspaper, let alone the most "respected" name in journalism.

The NYT is still respected??

Giving debt relief to africa is really an effort to stop the bleeding. The World Bank has been loaning more money to cover "interest payments" that African countries have not been making.

Debt relief is just a way of saying that that practice would stop with a one time payment. The loanees have written off the loans long ago.

Is this the same editorial where the NYT said Africans have two choices - take Western aid or stay in civil war and poverty?

http://www.nytimes.com/2005/06/06/opinion/06mon1.html?hp

I agree with a previous poster that the editorial writers at the NYT are not very smart. or should I say, they leave a lot of room to improve upon the intellectual utilization?

I certainly agree with eliminating trade barriers including abolishing American and European agricultural subsidies. We ought to do it anyway and I have no problem with those who wish to argue for it on the additional grounds that it will also enable developing countries to improve their economies.

I could be persuaded to agree to debt relief on the grounds that (a) we’ve pretty much written off the loans anyway and (b) the people paying have little relation to the people who did the borrowing.

I will not agree to letting the government turn 1 percent of our GDP over to foreign aid or any other transfer program. I am curious though, how Jane or anyone else could endorse the latter proposal and still call themselves a “libertarian.”

Ann:

I'd heard much the same thing about the anti-sweatshop movement. I wasn't sure how much credence to give it, since the point of view I was hearing was also convenient for those running the sweatshops. On the face of it, a steady wage that exceeds a person's average daily income from, say, small-scale livestock farming, even at the cost of bad working conditions by Western standards, seems like a decent deal to me. And the "invisible hand" is precisely what appears to me to have been the only effective kind of long-term aid to anybody (I'm not talking about disaster relief - though you might argue that it's possible for "disaster" to become generational).

I have trouble believing that even the most benighted corporation could run a sweatshop as dangerous and disgusting as Lewis's meat packing plant, never knowing when a muckraking Western journalist might show up to take pictures and, these days, immediately post them online. Hence I conclude that sweatshop conditions, while bad by definition, are probably less deadly than they were in the US in the 1800s, even in countries with no effective protections for workers. I look forward to knowledgeable people's challenging that assertion so I can get away with starting with their sources instead of having to start from scratch myself ;-p .

One more thing: 0.7% of US and EU GDP is probably a very large fraction of the GDP of all the poorest countries combined, and somehow I doubt their economies' capacity to assimilate such a windfall.

Jane,
Not to be a stick-in-the-mud, but the general concept of government in the US would have private citizens or privately organized groups send aid to Africa if and when they have reason to believe it would actually do some good. I don't believe government aid to Africa or anywhere else is provided for in the Constitution, and I don't believe it would accomplish any more than the money we spend on things like HUD, the Dept. of Education or a bunch of other misguided efforts. If we really want to help people in Africa we should drop all trade barriers to those countries with democratically elected governments that meet minimum standards for human, political and economic rights for their citizens. If this is just about making liberals or the Europeans feel good about theyselves, tell them to take two prozac and don't call us in the morning.

Huh. The New York Times distorted several budgetary statistics to make the Bush Administration look bad. Meanwhile, in other news: water remains wet, Shaq is still one big dude, and Eric Gagne has a better-than-average fastball.

Talk about a waste of resources! Why doctor statistics to make the Bush adminstration look bad when the real ones make it look bad enough

Shaq is still one big dude

But not big enough to beat the Pistons...two years running...;)

Detroit over San Antonio in six!

Jamie -

The negative reactions I heard to the anti-sweatshop movement didn't come from factory owners. And one crucial factor to remember is that western-owned factories are known for being strictly above local standards (and hopefully raising local standards eventually).

For instance, there are so many routine stories of everyone dying in a factory fire because the back exit was padlocked to prevent employees from stealing inventory. But these stories are less likely for western-owned or -linked factories, not necessarily because of higher morales but for the reason you gave - it would be bad for their image. Western-linked factories are known for higher wages and safer working conditions, compared to prevailing locally-owned factories in poor countries, and the threat to their reputation faced by those companies makes the almost-universal claims credible.

I can remember an article in the Far Eastern Economic Review, I think it was a couple of years ago, that talked about the increase in slavery in China. Companies realized that, instead of paying the workers, it was cheaper to just lock them in to keep them from leaving. They would only do this with those from other provinces that spoke a different dialect and weren't legally supposed to be there. Often the imprisoned workers would work side-by-side with locals that were paid and allowed to leave each night, but the locals didn't mind seeing fellow Chinese enslaved because they weren't from the same region.

It's horrifying what some people will do to others without some sorts of checks and balances. Western-linked companies have reputations to maintain, which offers local workers at least some protections. If the anti-sweatshop movement is successful in demanding that Western companies meet Western labor-union standards in poor countries, then the poor in those countries will be left with no protection, because the Western companies will leave. The anti-sweatshop movement is a "we got ours but we're not going to let you get yours" movement, in the eyes of the people who desperately want those jobs.

The New York Times fudging numbers to shaft the President? I am SHOCKED! Shocked I tells ya!

Most the aid to Africa will end up in the hands of tyrants or thugs (as per Somolia). Throwing money at Africa is not the solution. Overthrowing despotic regimes is.

DickP: And note that they NYT doesn't include private donations in it's totals. Most private donations bypass the UN and other international organizations - which must enrage those corrupt UN officials.

Thank again, Ann - as usual you're a wealth of information. I had tentatively reached the same conclusion about the anti-sweatshop thing (my husband thinks the same thing goes for the save-the-rainforest movement and control of nukes - well, sort of - by the UNSC countries), but I still hesitate before coming out anti-something-that-sounds-humane-at-first-blush. Like many conservatives, I still sometimes allow the liberal side to choose the terms of debate rather than strenuously putting forth ones I believe to be more accurate... but that's my problem.

Jamie,

I agree that the anti-sweatshop movement sounds good at first. I was quite surprised at the depth of feelings against it in Asia, which is why it stuck in my mind so clearly.

As for anti "sweatshop" groups - I attended anti globalization talk at a local Unitarian Church recently. Very amusing. They actually discussed the need for health and dental - yes dental - insurance for factory workers in Mexico. These were people working in a state of the art Delphi plant, who had been putting in 14 hour days in the fields in prior years/decades, if they were lucky enough to have a job at all.

Progressives used to fight for actual rights. Now they fight for dental insurance.

Curious: any one know how the uber-compassionate types in Britain, France, and Germany (what -- no Poland?!?) came up with 0.7%? Extensive analysis? Counted the African mouths? Pulled it out of their collective backsides?

Heck, why not 7%? 17%? 50%? At least for awhile? C'mon, *children* are dying! Something must be done! After all, the "stingy" US will just spend it on SUVs, Big Macs, McMansions, and ... oh, yes, corporate welfare.

The NYT and similar lefties will keep carping until we have the cajones to truly defend our private property -- including our income. Until then it's open season.

It seems like you enjoy reading, well I'd recommend "The elusive quest for growth". It's an interesting book about a World Bank employee's experience with developing countries projects.

my cat's breath smells like cat food

-sorry, i just found this site. i've never seen such brilliant people talking to people that can't spell. i am one of the latter.

Paul: That's reason #2 why I don't go to the UU church anymore. (Reason #1: Why would atheists/agnostics/deists get up Sunday morning and go to church, anyhow?)

(OT, so skip at will)

markm,

I don't get Unitarians at all. I've played a gazillion concerts at Unitarian churches, and for some reason almost all of them have involved explicitly Christian choral music; it's like they can't let go of the good stuff even if it contradicts everything they supposedly believe — or rather, says a lot that they don't.

The funniest instance was a series of concerts by three Bay Area Unitarian choirs in combination. They were doing Morten Lauridsen's Lux Aeterna among other things, and while all the other texts were printed in the program, the little segment of that text beginning "O nata lux de lumine" was inexplicably missing. It's the one segment that mentions Jesus Christ by name.

They sang the text, understand, but they figured that if it wasn't translated in the program book, no one would notice the unfortunate mention of that Jesus dude. It was the silliest thing I'd seen in that line since the Juilliard Pre-College Chorus called Gustav Holst's Ode to Death "Ode to Immortality" in the printed program after parents complained. They didn't change the words there either, just the title (and since the words — from Walt Whitman's "When Lilacs Last at the Dooryard Bloom'd" — begin "Come, lovely and soothing death," I can't imagine it made much difference beyond richly amusing most of the audience).

Be sure to read "Dark Star Safari" for the painful personal lessons learned wrt African aid and assistance by Paul Theroux, a fine travelogue writer and (bludgeoned by reality) 60's PeaceCorps volunteer who served all over Africa.

I think we need the (dependency) equivalent to "Alcoholics Anonymous" for societies and nations. And/or the notion of putting a country and/or people into "receivership." A hospital for sick societies.

Well, I'm not sure if this has been said above or not, but, I'm for AID to some of the 3rd world countries. Even through Bush comes off as a presumtuous ass, there ARE people within the US administration who get paid alot more money than any of us who do and try and figure out the solution to these problems.

Throwing money at them? A waste.
Building their infrastructure for them? A waste.
Teaching them how to build an infrastructure. Doesn't happen overnight, that's what you need to understand.

I'd say, either
1. become a multibillionare and blow a fortune trying to look like the "good guy"
2. Stop whining and wait for some administration to help develop the country.
3. Become part of the recovery process. Yes we all know blah blah, current 3rd world country was exploited blah, blah.

Does that mean you can't devote your life to their recovery? Like I said, its not going to happen overnight. And p.s. "devote you life doesn't mean become a monk and live in a hut",it means even if you become a muilti-billionare, try and find a few months to go over and teach people how to farm, how to build toliets, you know, the dirty little things people don't like to talk about.

Its not about money.

"The Elusive Quest for Growth" is good, but for more details on just how bad some African country governments are, check out The Shackled Continent.

Ah, yes... aid to Africa. It's worked such wonders already, hasn't it?

"Foreign Aid": poor people in rich countries giving money to rich people in poor countries.

Well, no... not always. But close enough.

By all means, let's give Mugabe some money-- I hear he has some land which needs rebuilding.

And if that doesn't work, let's have a bunch of rock stars give a concert. I hope that y'all have read Steyn's recent piece, Africa needs accountants, not rock stars.

Oh, yeah, one last thing: let's definitely forgive all debt and pressure everyone else to do likewise. That will make it so interesting for African nations which truly want to develop to secure loans in the future.

By what right does the Federal Government give away my tax dollar to other countries? It is little different than what a bank robber does, the only difference is this theft is wrapped in altruism when the state does it.

Meanwhile, back at the ranch:

"President Bush last week brazenly brushed aside British Prime Minister Tony Blair's call for a doubling of aid to Africa. Blair and other European leaders have taken on the task of fighting extreme poverty — and Bush watches from the sidelines. To justify its dereliction, the Bush administration perpetuates a mythology that contributes to the premature deaths of millions of people each year."

http://www.latimes.com/news/opinion/sunday/commentary/la-op-sachs12jun12,0,3370311.story
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