AIDG Book Club: End of Poverty (Part 2)
by Catherine LaineDecember 19th, 2006
I love Audible. It makes me far more well-read than I would otherwise be. A few months ago I was listening to (hmm the name of the book escapes me at this late hour) and there was a passage about cooperation research and the human need for fairness. The basic premise is that people are irrational or more accurately will not act in their own self-interest in responses to perceived unfairness.
Begley, Sharon. 2006. “Animals Seem to Have an Inherent Sense of Fairness and Justice.” Wall Street Journal (10 November): p. B 1.
A sense of fairness underlies irrational choices by humans, too. Economists assume that economic decisions are rational, but in many cases people prefer to gain less in order to punish someone who is behaving unfairly. If a partner proposes a $7/$3 split of $10 offered in an experiment, many people reject it outright, gaining nothing rather than accepting the inequity.
This relates a lot to how I think about Jeff Sachs’ key premise that more international aid is needed for developing countries. Specifically he posits that existing aid should be raised from current levels, $65bn/year around 2002, to $195bn/year by 2015. It first, it makes me cringe. So much aid is wasted, stolen, tied up in bureaucracies, and otherwise prevented from getting to the people who need it the most. Shouldn’t we do everything we possibly can to make to money we are already sending is being used more effectively before throwing good after bad. (To be fair to Sachs, he is in no way suggesting that we shouldn’t do this at the same time. He makes it fairly clear, however, that waiting to solve corruption/inefficiency in the meantime is ridiculous given what is at stake due to inaction).
The big question this all raises for me is how much waste can I tolerate to save lives. If I had $20 to give and I knew that $5 of it would get pocketed by some kleptocrat (insert expletive of choice here), but the other $15 would most certainly a save life, would I still give? Of course, I would. I would be annoyed, but I’d get over it sharpish because a human life was saved. So what precisely is the difference with the international aid? Does my increased skepticism/annoyance have to do with a faulty perception of numbers? Why is 25% of $20 just annoying, but 25% of $1 billion unconscionable? If the number of lives saved increases proportionally with the amount of cash spent, what is irrational is for my response to the original question to change.
P.S. I pulled out that 25% figure out of the air. I do not actually know the estimated amount of international aid that is gets “sidetracked” each year.
Related Posts
AIDG Book Club: End of Poverty (Part 1) - Jeff Sachs and Angelina Jolie
AIDG Book Club: End of Poverty (Part 2) - A question of corruption
End of Poverty (Part 3): Did you know?
End of Poverty (Part 4): A few for the highlight reel
End of Poverty (Part 5): The breakdown
So do you think we can end extreme poverty by 2025?
