Quotulatiousness

September 24, 2015

A case study – Nik-Mart in Subsistia

Filed under: Economics, USA — Tags: , , , , — Nicholas @ 03:00

Don Boudreaux looks at the different effects of international aid and capitalist exploitation in a desperately poor, far-away country:

The far-away land of Subsistia is inhabited by people who are desperately poor, not only relative to the typical person elsewhere on the globe but also in absolute terms. For decades well-meaning, well-educated, and well-funded people from the United States and other wealthy countries have visited Subsistia to help raise Subsistians out of poverty.

Alas, while these efforts by governments, NGOs, and churches have been many and munificent, all ordinary Subsistians continue to live in deep poverty – that is, until recently. A few short years ago a large U.S. corporation, Nik-Mart, set up factories in Subsistia. The wages that Nik-Mart pays to its Subsistian workers, while much higher than the average wage in Subsistia, are only a tiny fraction of the wages that Nik-Mart pays to its production-line employees in America.

Nik-Mart sells the goods produced in its Subsistian factories all around the world. One result of Nik-Mart’s operations in Subsistia is that the real prices that poor Americans and Europeans pay for shoes, clothing, and home furnishings have fallen significantly.

Nik-Mart is consistently one of the world’s most profitable corporations. It is also one of the world’s most hated.

When word recently leaked out of Nik-Mart’s record sales revenues and of the healthy rate of return on Nik-Mart’s assets, protests erupted in all major capitals of the developed world. Washington, Ottawa, Santiago, London, Amsterdam, Stockholm, Paris, Berlin, Madrid, Rome, Prague, Moscow, Tokyo, Pretoria, Canberra – these and other cities were swarmed by protestors demanding “social justice” and criticizing Nik-Mart for exploiting workers. “Nik-Mart’s profits are in the billions,” screamed U.S. Sen. Elsbeth Walter, who gave a rousing speech to protestors on the Washington Mall, “and yet it exploits poor workers in Subsistia while it off-shores jobs from America, hurting poor Americans! Have you no shame, Nik-Mart? Have! You! No! Shame?!!” Sen. Walter rhetorically asked, her index finger pointing accusingly at an imaginary Nik-Mart executive presumably hovering, phantasmically yet bloatedly, before her.

The Sunday talking-head shows were filled with heads talking of little else. “It’s really unconscionable,” said Harmon Nicholson, a famous progressive columnist, “that Nik-Mart takes advantage of the freedom that this country gives it to produce the things it sells in America outside of America. It’s no wonder our jobs picture is so weak and that American wages have stagnated.”

Sen. Lawrence Greenham, a Republican from the south, chimed in: “I don’t normally agree with Harmon, but he’s right on this. American plutocrats are gettin’ richer an’ richer off the backs of America’s poor. It’s gotta stop.”

July 28, 2015

German money and the Palestinians

Filed under: Germany, Middle East, Politics, Religion — Tags: , , , — Nicholas @ 04:00

Fred Siegel and Sol Stern review a new book by Tuvia Tenenbom called Catch The Jew!:

If you want to understand why there is no peace in the Holy Land despite the best efforts of the Obama administration and the billion-dollar European “peace and human rights” industry, you owe it to yourself to read Catch the Jew! by Tuvia Tenenbom. This myth-shattering book became an instant bestseller in Israel last year, yet, Germany aside, it has largely been ignored in American and European media outlets and by the reigning Middle East punditocracy. Ostensibly, Tenenbom’s book is disdained because the author lacks the academic or journalistic credentials to be taken seriously as a commentator on the Israel-Palestinian conflict. Though he speaks both Arabic and Hebrew, Tenenbom possesses no professional expertise on the modern Middle East, nor has he had any previous journalistic experience covering Israel and the Palestinian territories.

So much for academic and journalistic credentials, then. In this volume full of personal observations, revealing interviews, and Swiftian satire, Tenenbom offers deeper insights into the fundamental realities of the Middle East conflict and the pathologies of the Palestinian national movement than decades of reporting by media outlets such as the New York Times, The New Yorker, and Israel’s Haaretz. No fair-minded person can come away from this book without wondering why such citadels of contemporary liberal journalism have neglected to inform their readers of the scam being conducted in the region by self-styled human-rights activists and their taxpayer-funded European NGOs — not to mention that this massive international intervention actually makes it even more difficult to achieve a peaceful solution to the conflict.

So what’s the secret of Tenenbom’s journalism? For starters, he disarms the anti-Israel activists and Palestinian officials he engages with by dissembling about his own identity and by playing the simpleton. The author was raised in an ultra-Orthodox Jewish family in Israel. As an adult, he broke with organized religion and moved to America, where he became a successful playwright and founder of the Jewish Theater of New York. In his travels around Israel and the Palestinian territories, however, Tenenbom presents himself as Tobi, a German gentile and unaffiliated journalist — an innocent abroad sincerely trying to understand why the Jews have chosen to oppress the poor Palestinians. Because many of Tenenbom’s Palestinian and pro-Palestinian interlocutors assume that this well-meaning German must be on their side — a reasonable assumption, since much of the financial support for the pro-Palestinian NGOs comes from the German government or political parties — the ruse works brilliantly. The activists are willing to open up to the apparently naïve German and express their true beliefs about Israel and Zionism — hateful views they might be more circumspect about sharing with, say, a New York Times reporter.

April 15, 2015

QotD: The secret weapon of the bureaucracy

Filed under: Bureaucracy, Government, Quotations — Tags: , , , — Nicholas @ 01:00

… boredom is the deadly secret weapon of the bien-pensant technocrats of the EU and the UN. “They wear outsiders down with the tedium of their arguments and the smallness of their fine print, so that by the time anyone else notices what they’re up to the damage has been done and it’s too late to do anything about it.”

James Delingpole, “Green Global Governance: How Environmentalists Have Taken Over the World”, Breitbart.com, 2014-06-25.

January 1, 2015

Unintended consequences – charities suffer due to US anti-terror measures

Filed under: Economics, Government, USA — Tags: , , , , — Nicholas @ 11:31

It’s actually rather amazing how powerful the US government can be … and we’re not talking about military power here. US banking laws are being exported to other nations without their consent or consultation, and there’s nothing non-US governments can do about it:

Now here’s a real surprise. The various anti-terror laws, terrorist financing laws, know your customer, illicit money tracking laws which now festoon the financial system have costs. Really, who would have thought it that bureaucratic regulations have real costs out there in the real world? It’s something of an amusement that it’s a rather lefty think tank, Demos, that brings us this news. For, of course, it tends to be those who are rather lefty who tell us that regulation is the cure for all our ills and no, of course not, regulations never have any costs they only do good things. You know, the Elizabeth Warren approach, piles of regulations on finance will be just wonderful, no one will ever lose out.

It particularly interests me as I’ve a very vague connection with a charity, Interpal, that has been hit by these sorts of regulations. Not, I hasten to add, that I am actually connected with that charity, only that I was once on a TV program with the head of it discussing their difficulties in gaining access to a bank account. The basic problem was that the Americans thought that they were less than kosher (the charity themselves obviously disagree) and that thus they shouldn’t have access to the banking system. This shouldn’t be all that much of a problem as they’re a UK charity and they were looking for access to the UK banking system. But that isn’t how it all works. If the Americans decide that they don’t think someone should have access to the banking system then they tell the bank that, well, you wouldn’t want us to come looking at your American banking licence if you were to offer an account with your UK licence, would you? And thus there is the leverage required to extend US law to other countries.

[…]

It’s not particularly the British government that is causing these problems although they have a part in it, to be sure. It’s the general international rules over who a bank may deal with, what they’ve got to know about them and what they’re doing with the money. Everyone seems quite happy with this as it stops (or hinders at least) drug dealing, money laundering and tax abuse. But it does have costs. Absolutely any set of regulations will affect people who are not the target of said regulations. If you insist that banks make a large effort to understand what their customers are doing then the banks will simply reject some customers as not being worth the candle. If perhaps handling money for some Islamic terrorist means bankers go to jail then bankers won’t handle the money of anyone who might be an Islamic terrorist: nor anyone who wanders around in Huddersfield in Islamic robes and states that they’re raising money to help the poor of Gaza. The manager of, say, Lloyds Bank in Huddersfield doesn’t know what the heck is going on in Gaza, who is linked to Hamas, who is not, who is delivering food and who is doing other less reputable things. And there’s no reason why she should either. So, the laws to prevent the one will lead to the other not gaining access to a bank account. This is really simple, simple, stuff.

This is what happens when people regulate.

September 25, 2014

QotD: Why useless university degrees are created

Filed under: Bureaucracy, Education, Government, Quotations — Tags: , — Nicholas @ 00:01

The typical understanding of a useless degree is of a credential whose market value is close to zero. In that sense this isn’t quite economically useless. There is a market for people wielding this pseudo-intellectual nonsense. It’s not a real market admittedly but it’s a market nonetheless. There is, however, only a single market maker: The Government.

The job prospects go beyond employment directly by the state, they extend into the quasi-government sector, what is sometimes politely referred to as the wider public service. There is a whole eco-system of NGOs, quasi-governmental organizations and ad hoc committees that thrive upon the government teat. Since their work has no objective value, and the criteria for employment is vague at the best of times, hiring managers fall back upon a tried and true screening methodology: A piece of paper issued by a government backed institution.

So for those of you following along at home: A government financed body creates make work. In order to handle that made-up work new workers are hired. Those workers have certificates in make work from government financed educational bodies. This is the great circle of statist BS that spins around our the modern world without beginning or end. There is precious little justice in that.

Richard Anderson, “The Justice Makers”, Gods of the Copybook Headings, 2014-09-19.

July 30, 2013

The economic inefficiency of “fair trade” goods

Filed under: Business, Economics, Food — Tags: , , , , — Nicholas @ 10:26

Tim Worstall applauds you for wanting to use some of your economic surplus to help out the poor and less fortunate producers of various goods in the developing world, but points out that the “fair trade” method is incredibly inefficient at funnelling any of that extra money to the original producers of your coffee or other “fair trade” goods:

However, you might want to have a little think about this in the lights of these quite astonishing numbers:

    An interesting statistic is that in 2010, retail sales of fair-trade-labelled products totalled about $5.5 billion, with about $66 million premium — or about 1.2 percent of total retail sales — reaching the participating producers. There has to be a better way of helping poor farmers. Having only 1.2 cents out of every dollar spent on fair-trade products reach the target farmers is a hugely inefficient way of helping these people. If people wish to help these farmers there has to be charities out there that can transfer more than 1.2 cents per dollar to them.

It may well be that you are exercising your consumer choice as a way to make the world a better place. It’s just an incredibly inefficient method of doing so and thus you might want to reconsider that plan.

My own supposition is that the reason Fair Trade is so appallingly inefficient is the number of Interchangeable Emmas who have to be paid from that money supposedly going to producers. It takes very many poor coffee farmers’ incomes to pay for the PR bod advertising Fair Trade coffee from an office in central London. It might well be better to simply do as Madsen urges, and buy things made by poor people in poor countries. Then send the money saved by not paying the Emmas off to a charity of some minimal efficiency. Or even, if coffee farmers are really your thing, simply drink an extra cup or two a day and send the money by increasing demand for their production.

Update: In a marginally related item, Jonathan Katz explains why the policy of sending food to distant lands is less an attempt to ameliorate hunger than it is a corporate welfare policy to prop up US agribusiness:

The problem, says Christopher Barrett, an economist at Cornell University and one of the world’s leading experts on food aid, is that the U.S. has an entirely different goal when it comes to sponsoring humanitarian assistance. Feeding the hungry has never been its sole purpose.

Rather, the historical goal of food aid has been to stimulate U.S. businesses — the agriculture and shipping industries above all. Modern food aid was devised in the early days of the Cold War as a way to dispose of government-held surpluses, in order to regulate crop prices at home and create markets abroad. The main programs in the early days of food aid didn’t even give food away for free, rather selling it to foreign governments at a discount. “It just happened that this could get advertised as and provide humanitarian relief on occasion,” Barrett said.

Over time, things began to change. Surplus disposal became less important than other forms of domestic price control, and the cheaply sold food did not prove very effective in opening markets. When in the 1970s and 1980s, food donated during famine emergencies in Asia and Africa proved effective, free-food distributions took over as the dominant programs.

Today, the major players in food aid are nongovernmental organizations (NGOs) such as World Vision. But, because of how American laws are structured, domestic corporations still reap the much of the profit. Major U.S. agribusinesses can count on hundreds of millions of dollars in annual sales to the government.

Shipping companies do even better. Federal law mandates that at least half of all U.S. food aid must be shipped aboard U.S.-flagged vessels. With shipping costs taking up nearly 40 percent of any food assistance funding, the law guarantees hundreds of millions of dollars in contracts for shipping companies. The winner of the Mozambique shipment was no exception: Sealift Inc. has grossed $203 million in government contracts since 2011, mostly from the Pentagon, according to data at USASpending.gov. This benefit is not lost on the shipping industry: The sector’s leading coalition, USA Maritime, spent $250,000 lobbying Congress on food aid and cargo-preference laws in 2011 and 2012.

June 27, 2013

How many “environmental” groups are actually harming the environment

Filed under: Economics, Environment, Media — Tags: , , , — Nicholas @ 00:01

Willis Eschenbach at Watts Up With That:

Now, given that poverty is the greatest threat to the global environment, the inescapable conclusion is that the only way the global environment stands a chance is if poor countries can develop economically.

And that is why the anti-development, pro-expensive energy stance of the large environmental NGOs is one of the great environmental tragedies of our times.

Here’s the chain of causality:

1. Climate alarmists, with the strong support of the major environmental NGOs like Greenpeace and WWF, declared war on CO2.

2. The method that they chose to fight CO2 was to discourage fossil fuel use by making energy more expensive, using a combination of taxation, legislation, international pressure, and expensive subsidies to achieve that end. Obama’s War on Coal, announced today, is just one of hundreds of examples of the wealthy NGOs and the rich governments working to increase the price of energy.

3. Since energy is development, expensive energy keeps poor countries in poverty. When the World Bank denies loans for coal fired plants in India, the poor suffer … but the environment suffers more. Until they can afford to use coal and gas, they’ll run the country on wood … I refer you back to Figure 1 for how well that works out.

4. Expensive energy slows a country’s economic development, and as President Obama pointed out, people worried about money don’t pay attention to the environment.

This ends up in a bizarre position—the actions of the major environmental NGOs are ensuring continued environmental destruction in the developing world.

May 16, 2013

You don’t have to be a “Little Englander” to think the UK would be better off outside the EU

Filed under: Britain, Europe — Tags: , , , — Nicholas @ 08:03

In sp!ked, Rob Lyons explains that it’s not just the neanderthal throwback Tories who are questioning whether the UK should leave the European Union:

Over the past week, there has been the most serious discussion about Britain leaving the European Union since it first joined in 1973, and since the British electorate voted in its only referendum on EU membership, under Harold Wilson’s Labour government, in 1975. This discussion a good thing, because it really is time we made a collective dash for the exit from the EU.

[. . .]

The EU doesn’t only elevate technocrats in the economic sphere. More and more political and social policy is also effectively being guided from Brussels. Consider an opinion piece [in the] Guardian this week, by the head of policy at Friends of the Earth UK, Craig Bennett. Bennett argues that the ability of the EU to impose rules and regulations on Britain has improved our health and environment. To be explicit: Bennett thinks it is better that people outside Britain impose these things upon us, even over the heads of our elected representatives. Where a national government might have to balance costs and benefits, and take into consideration the stated desires and priorities of voters, regulations and directives from Brussels can be imposed free from such consequences and accountability. From the point of view of NGOs and lobbyists, this is great news. Why try to change popular opinion when you can simply get the green light from some unelected body of technocrats?

To be anti-EU does not mean being anti-Europe. True, there is a fair degree of parochialism and anti-immigrant sentiment among many of those in Britain who want out. But those of us who believe in having closer ties with Europe and greater freedom of movement across the continent should also be opposed to the EU. Because, thanks to its anti-democratic institutions and its imposition of draconian policies on unwilling citizens, the EU is now doing more harm than good for the cause of creating a sense of European common interest. It might be uniting national elites, allowing them to take refuge from their electorates in the citadels of Brussels, but it is disempowering and even dividing the peoples of Europe — Germans vs Greeks, for example, or enlightened Western Europeans against allegedly backward, racist Hungarians.

Despite the creation of the European Parliament in 1979, there is no meaningful European demos. But the ability to move and trade freely is a good thing — something we could surely retain without the bureaucratic honeypot of the EU’s institutions. It’s time for all Europeans to reimagine how we might live and work together — and Britain marking a sharp exit from the anti-democratic, pseudo-unifying mess that is the EU could be the perfect catalyst for that.

August 21, 2012

The 21st century equivalent to the enclosure movement

Filed under: Africa, Americas, Asia, Government, Liberty — Tags: , , , , — Nicholas @ 10:07

Joseph R. Stromberg reviews The Land Grabbers: The New Fight over Who Owns the Earth, by Fred Pearce.

The Land Grabbers is a wonderful primer on the newest manifestations of an ancient form of plunder: the seizure of other people’s resources and destruction of their livelihoods. The author, Fred Pearce, is a well-established British environmental journalist. Here he surveys the ongoing alienation of allegedly “unused” or “underused” land in Africa, Latin America, East Asia, Russia, Ukraine, Georgia, Australia, and elsewhere at the hands of international corporations, both private and state-owned. Politicians in the affected countries are key partners in operations that resemble the late-19th-century scramble for control of Africa. The land grabs aim at enriching privileged companies and their political allies, usually at the expense of those already on the land. States, companies, and their frequent close friend, the World Bank, see no reason to respect sitting owners and resource users, whatever their rights under customary law and (sometimes) postcolonial statutes. Pastoral nomads get even less respect. In Tanzania, for example, governments and safari capitalists have reduced the traditional grazing lands of the Maasai herdsmen to a fraction of what they were. And in Ethiopia, the government’s “villagization” policy, Pearce writes, resettles peasant farmers “in the manner of Stalin, Mao, and Pol Pot,” clearing the way for deals with foreign capital.

Where agriculture is concerned, the effort goes forth under an ideology that claims that only industrial-scale farming, modeled on subsidized American agribusiness, can feed the world. The ideologues in question include John Beddington, chief UK government scientist; Paul Collier, former research head at the World Bank; and Richard Ferguson of the investment company Renaissance Capital, who hopes to see “industrial-sized farms of a million hectares.” To realize that vision, smallholders, hunters, gatherers, and pastoralists must get out of the way and submit themselves to wage-labor, wherever they find it. The ideology goes hand in hand with the form of globalization that relies on the power of the United States and some associated countries to dictate the contours of world trade. While the U.S. has toppled states seen as hostile to American business interests (as in Guatemala in 1954), today’s methods are often more subtle. They include USAID programs, American domination of World Bank policies, and a web of treaty obligations, especially international investment agreements.

Pearce is an environmentalist, but his book is not especially ideological. He’s more interested in presenting data. Wherever possible he has figures for acreage (or hectares) and tells us who did what to whom and where. He also faults wealthy environmental idealists and NGOs, noting that their parks and preserves can displace local people and their property, just like commercial hunting preserves, sugar plantations, logging operations, and the rest can.

June 17, 2012

The only justifications for armed intervention

Filed under: Government, History, Military, Politics — Tags: , , , , , — Nicholas @ 00:12

George Jonas on the arguments being trotted out for military intervention in Syria and other hotspots:

Repeating for the record what I’ve written many times before, I think only three things justify resorting to arms: (A) self-defence, (B) treaty obligations, and (C) defending vital national interests, defined as interests that properly mandated governments on reasonable grounds honestly believe cannot be safeguarded or secured in other ways.

As far as I can see, nothing compels or even excuses belligerency except national defence obligations. Humanitarian components are icing on the cake. “Responsibility to protect” strikes me a slogan of liberal imperialism; the battle cry of post-modern civilization’s missionaries, the casus belli of self-appointed knights errant with an unquenchable thirst for running the world. Disguised as academics, adventurers, mercenaries, bureaucrats, bien-pensants and do-gooders, these 21st-century Don Quixotes consider themselves the new global aristocracy. They’re the enlightened ones, expecting to become the anointed ones before long, and rule as functionaries of various supranational bodies — governmental, non-governmental, or merely mental — in what no doubt many believe is humanity’s best interest.

[. . .]

Anyway, my main point was that the West’s moment of going off the rails in foreign policy didn’t come in the turbulent and error-prone 1960s, but in the seemingly level-headed 1950s, under the presidency of the popular wartime commander “Ike” Eisenhower. Instead of letting America’s allies, Britain, France and Israel, finish the job Egypt’s military dictator, Colonel Nasser, started when he arbitrarily nationalized the Suez Canal in 1956, Eisenhower’s America, aided by Lester B. Pearson’s Canada, rescued the aggressive nationalist. As Westerners, Eisenhower and Pearson may have expected credit; what they got was contempt.

“Weren’t they allies? Westerners are people whose enmity is preferable to their friendship,” was how a Libyan I interviewed commented some years later. I don’t think we learned much since.

May 6, 2012

Technology is not the panacea

Filed under: Education, Health, India, Technology — Tags: , , , , — Nicholas @ 10:06

I’m generally very pro-technology, but the One Laptop Per Child (OLPC) effort always struck me as putting the technology cart in front of the educational (and cultural) horse. A report at The Economist has examples of technological fixes that haven’t actually “fixed” the problems they were intended to solve:

The American charity has an ambitious mission — transform the quality of education in the developing world by giving every poor student a laptop. Targeting a $100 laptop, OLPC succeeded in creating a usable computer at a very low price point (the actual number was closer to $200). Unfortunately most of the attention in the project was focused on the technology and not enough on its efficacy. In the first rigorous evaluation of the programme, the Inter-American Development Bank (IDB) found little evidence that the laptops influenced educational outcomes. The study, conducted in Peru four years after the programme was launched, found no improvement in math or language. While the computers did lead to some gains in cognitive skills, the authors concluded that access to a laptop didn’t improve attendance. Neither did it motivate students to spend more time on their homework.

There is similarly disappointing news on cooking stoves. The World Health Organization estimates that indoor pollution from primitive cooking fires contributes to 2m deaths annually. One solution is to use clean cooking stoves. At a cost of $12.50, these stoves are an inexpensive way to reduce respiratory ailments and improve air quality. The Global Alliance for Clean Cookstoves (GACC), a public-private initiative, is making a big push for 100m homes in the developing world to switch to clean stoves by 2020. But a new NBER paper by Rema Hanna from Harvard University and Esther Duflo and Michael Greenstone from MIT, questions the long-term health or environmental benefits from this programme. The authors evaluated a clean-stove programme in eastern India, covering 15,000 households over five years. Their study found that after the initial year, enthusiasm for the stoves waned and households didn’t make the necessary investments to maintain them. As a result, the programme had very little effect on respiratory health or air pollution.

Both these projects highlight some common misconceptions in using technology for development. For one, solving intractable social problems requires fundamental changes in the target population. It also needs a supportive institutional framework to reinforce the right behaviour. Technology can complement this process, but it is no substitute for the human element. In Peru, simply adding laptops to the classroom, without investing in teachers who were proficient in computer-aided education, meant that the academic impact was limited. The IDB paper rightly points out that in poor countries where wages are low, development money may be better spent on labor-intensive education interventions than on expensive tools.

One of the worst moves African countries can make

Filed under: Africa, Economics — Tags: , , , — Nicholas @ 09:55

Tim Worstall at the Adam Smith Institute blog:

You don’t have to go far into NGO land to find people arguing that poor countries need to protect their baby industries from the big bad wolves of international capitalism. That trade barriers are a good idea, that infant industries need to be nurtured and, as is the way of these things, the Washington Consensus is the imposition of the poverty that the poor suffer from.

That this is entire nonsense does not stop those idiots wearing ideological blinkers from repeating it. Which is something of a pity as it really is trade, openness to it, which drives economic growth:

    In recent years, sub-Saharan African countries have grown remarkably. According to data from the Penn World Table 7.0 (Heston et al. 2011), average annual real GDP per capita growth from 2005-9 has been over 2.5% (3.5% when excluding 2008 and 2009). This recent growth performance is remarkable given that, for over four decades since 1960, real GDP per capita growth in sub-Saharan Africa was dismal, averaging less than 0.5% per annum.

We are, as we know, talking about the poorest of the poor and any uptick in their fortunes has been both extremely difficult to find and extremely welcome when it is.

One thing that might be remembered is that, post-colonialism, most sub-Saharan countries did in fact follow the policies of infant industry protection behind tariff and licencing barriers. It was the falling apart of this in the 80s and then the gradual adoption of good old neoliberalism in the mid to late 90s which has turned the numbers around.

March 18, 2012

Measuring the effectiveness of your charity organization by how they allocate their spending

Filed under: Bureaucracy, Economics — Tags: , — Nicholas @ 11:06

Tim Harford’s weekend magazine column:

You’re a generous person, I can tell. But how much do you think about the effectiveness of your charitable donations? One handy way to size up a charity is to pay attention to how much money it spends on overheads such as administration and fundraising, rather than frontline do-gooding. There’s only one small problem: this ready reckoner is enormously misleading.

For people who think about the effectiveness of charities, this insight is not news. Givewell, a charity that evaluates the effectiveness of other charities, complained five years ago about the “pervasive attitude that nonprofits need to get all their money right to the needy, and do all their administration on the cheap”. Dean Karlan, an economics professor and co-author of More Than Good Intentions, analysed Givewell’s recommendations and found that outstanding charities tended to spend more money, not less, on administration and fundraising.

Caroline Fiennes, author of a new book, It Ain’t What You Give, It’s The Way That You Give It, explains that fundraising costs tend to be determined by donors — who can generous or stingy, ignorant of the cause or conscious of it. Meanwhile, administration costs could include efficient logistics, accounting or purchasing systems — plus paying for rigorous evaluation.

February 14, 2012

The surreal world of international aid

Filed under: Britain, India, Politics — Tags: , , , , , — Nicholas @ 10:16

Brendan O’Neill on the ludicrous display of a donor literally begging the intended recipient to continue accepting the offering:

The debate about whether Britain should continue giving aid to India will surely rank as one of 2012’s most ‘Alice in Wonderland’ political moments. An outsider to the world of international aid probably imagines that it is cash-strapped countries in the South who do the pleading, sometimes having to humiliate themselves by asking Western nations for financial assistance. Yet in the surreal affray over aid to India, it was the well-off giver — Britain — which was on its knees, begging, beseeching the Indians to continue accepting our largesse because if they didn’t, it would cause the Lib-Con government ‘great embarrassment’.

This unseemly spat sums up the problem with modern aid: it’s all about Us, not Them. The reason British ministers were prostrating themselves before India, effectively begging the Indians to remain as beggars, is because aid is now more about generating a moral rush in the big heads of politicians and activists over here than it is about filling the tummies of under-privileged people over there. It is designed to flatter and satisfy the giver rather than address the needs of the receiver, which means ‘aid to India’ is way more important to Britain than it is to India. And for that reason, because aid has been so thoroughly corrupted by the narrow needs of its distributors, it would indeed be a good thing to stop foisting it upon India and other nations.

There was something almost Pythonesque (and I never use that word) in the sight of British politicians saying ‘We must continue giving aid to India’ while Indian politicians were saying ‘We do not require the aid. It is a peanut in our total development spending.’ Those were the words of India’s finance minister, Pranab Mukherjee, who told his parliament that the nation should ‘voluntarily’ give up the £280million it receives from Britain each year. Cue outraged — and panicked — ministers and do-gooders in London kickstarting a PR campaign to show that the Indians are wrong — they do need British aid, because otherwise, according to Britain’s minister for international development Alan Duncan, in an article illustrated with a photograph of him accepting flowers from grateful little Indians, ‘millions could die’.

[. . .]

British historian William Hutton once said, ‘The charity that hastens to proclaim its good deeds ceases to be charity, and is only pride and ostentation’. That is pretty much all that remains in the world of aid: pride and ostentation. Indeed, it is striking that, in 2010, when DFID announced cuts to spending on the publicity side of ‘fighting global poverty’, various NGOs went ballistic, slamming the focus on ‘output-based aid’ over important things such as ‘increas[ing] public understanding of the causes of global poverty’ — that is, who cares about providing on-the-ground stuff, when there’s so much awareness-raising about the wonderfulness of NGOs to be done? Britain’s aid budget should be slashed, not because it costs the taxpayer too much money, as Daily Mail moaners argue, but because it costs too much in terms of the self-respect of nations in the South. Britain should have an emergency aid budget, of course, so that, like all civilised nations, it can assist quickly and generously when people are immediately threatened by starvation or disease, such as after the Haiti earthquake or the Pakistani floods. But the rest of the time, even sometimes struggling peoples don’t need the massive side orders of moralism and fatalism that come with Britain’s ‘peanuts’.

August 19, 2011

Cage match: Jason Kenney against Amnesty International

Filed under: Cancon, Government, Law, Liberty — Tags: , , , , — Nicholas @ 09:16

Paul Wells on the ongoing war of words between Canada’s immigration minister and the earnest folks at Amnesty International:

Some stories are so odd nobody knows how to handle them. I don’t know how else to explain why Immigration Minister Jason Kenney’s extraordinary public feud with Amnesty International has attracted so little coverage.

Here’s a senior Conservative minister departing from the Conservatives’ normal bland talking points and unleashing a written broadside against a critic. And Kenney’s sparring partner wasn’t a predictable target. It was the Canadian branch of Amnesty, one of the most revered human rights organizations in the world. But that didn’t stop the minister from calling Amnesty’s concerns “poppycock,” “sloppy and irresponsible” and “self-congratulatory moral preening.”

Here’s what the fuss was about: last month, Kenney and Public Safety Minister Vic Toews released the names and photos of 30 fugitives who’d evaded immigration authorities since being found inadmissible because they’re believed to be complicit in genocide, crimes against humanity or war crimes. In short, the ministers were asking the public to help track down fleeing war crimes suspects. The public has stepped up: since the ministers’ announcements, six of the 30 men have been apprehended and three of those six deported.

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