Philanthropy

Michael Gerson argues that there is a purpose to large aid programs in this wonderful piece on PEPFAR in Zambia.

The American Enterprise Institute, a conservative think tank, published an interesting article on African development today. The author is Deborah Brautigam, a professor of international development at American University. She makes two basic points.

The first is that a developing a more robust system of public taxation would have broad benefits for African societies. Besides the amusement of a conservative think tank recommending that somebody pay more taxes, the point is very good. Not only would increased government revenue allow for better services and stronger state capacity, but Professor Brautigam believes it would also lead to more democratization on the continent. “Democracies are built not only on periodic elections but also on a social contract based on bargaining over the collection and spending of public revenue”. 

Her second point is that foreign aid isn’t all upsides. Aid can have negative effects on the recipient country by lowering local capacities for governance, weakening institutions, reducing democratic accountability, inspiring riskier behavior on the part of governments, and even lowering tax revenues. Some of her points are stronger than others - the tax revenue point seems a little weak to me - but overall she makes a strong case, and the article is well worth a read.

Also, I noticed that she has a book out on the same subject.

I like this PSA for Charitywater, an NGO that builds water pumps in the developing world.

After posting about the upcoming NBC drama about a renegade, philanthropist billionaire I realized that I had some more to say. To be sure, the show does sound like an aid worker wish fulfillment fantasy. This guy gets to travel the world and really see his beneficiaries, and NEVER has to write a funding proposal, program report, or success story. He never has to manage a budget or decipher the Fly America policy. Who wouldn’t love that?

But obviously NBC doesn’t make TV hoping to appeal to the aid worker demographic. They make shows that they think will appeal to a broad US audience. I’m assuming that  superhero stories are about wish fulfillment, and that the nature of the wish stems from what the audience feels it is lacking. If that common wisdom is correct, then I think NBC’s plan suggests that Americans are feeling trapped in a world full of war, poverty, and death. That there is so much suffering in the world that we can’t possibly change it, and the institutions set up for us are either ineffective or corrupt. In response, here is a man who has the power to skip past that system and really DO something. At least, that is what NBC is banking on.

I may be reading too much into this.

NBC has a new superhero drama coming out next season, and the hero’s primary power seems to be money. Like Bruce Wayne without the cool car. Our new hero is The Philanthropist, a “renegade billionaire” who helps those in need. I love this hollywood phrasing “Instead of spending $25,000 a plate at a fudnraiser, he’s dodging bullets in third-world countries to hand-deliver vaccine.”

From that description I doubt that it will have a single thing to do with actual philanthropy or foreign assistance. Not any more than Batman has with actual crime fighting, anyway. Still, I’m willing to watch it. It sounds like wish fulfillment for aid workers, and wish fulfillment is what super heroes are all about.

The Organization for Economic Cooperation and Development recently issued a report summarizing the foreign aid activities of its 22 member countries - which includes all of the major foreign aid donors. A group of British PhD candidates who blog on International Political Economy give a very good rundown of the main points.

They focus on the fact that the major donors are not on track to meet the aid targets they set a the G8 summit in 2005. At that time, donors agreed to increase aid to $130 billion (for all donors) by 2010. As of now they are about $38 billion short of that goal.

The report also provides this chart, which tells us how much each OECD member is gave in 2007 as a percentage of their own gross national income.

I’ve got mixed feelings about this methodology. I recognize that it is useful to measure giving by economy size - otherwise a large country like the US will always look like it has no more room to give (the US is the largest donor in dollar terms, but the US economy is so much larger than any individual European country that the % is low).

What I don’t like is the UN target of 0.7% of GNI. That number is just so arbitrary. It is based on the assumption that 1% of GNI is the right amount for a wealthy country to give, and that most of that giving “should” be from the government (the remainder should be private aid). But why 1%? How can world need always be equal to 1% of the GNI of wealthy countries? Why are governments necessarily responsible for the lion’s share of that? As far as I know, there aren’t answers to those questions.

Don’t get me wrong. I’m pro-foreign aid, and pro-large government aid budgets. But I don’t like arbitrary figures. Giving should be based on some combination of needs and capabilities to use the money - not a number dreamed up at a UN conference 35 years ago. The “right” amount of aid may be more than 1% of GNI, in which case the US (and all but 4 other donor countries) has a lot of work to do.

Alanna Shaikh (my wife) recently wrote a very useful post on how to research NGOs. To paraphrase her advice, there are ways that you can tell what an NGO really is - not just what its press releases say. To do this you have to put in some time on the NGOs website and Charity Navigator, but it is a small price to pay to learn what is happening with your money.