“Can’t Say No” Spending

The re­mark­able ob­ser­va­tion that med­i­cal spend­ing has zero net marginal effect is shock­ing, but not com­pletely un­prece­dented.

Ac­cord­ing to Spiegel in “Too Much of a Good Thing: Chok­ing on Aid Money in Africa”, the Wash­ing­ton Cen­ter for Global Devel­op­ment calcu­lated that it would re­quire $3,521 of marginal de­vel­op­ment aid in­vested, per per­son, in or­der to in­crease per cap­ita yearly in­come by $3.65 (one penny per day).

The Kenyan economist James Shik­wati is even more pes­simistic in “For God’s Sake, Please Stop the Aid!”: The net effect of Western aid to Africa is ac­tively de­struc­tive (even when it isn’t stolen to prop up cor­rupt regimes), a chaotic flux of money and goods that de­stroys lo­cal in­dus­try.

What does aid to Africa have in com­mon with health­care spend­ing? Be­sides, of course, that it’s heart­break­ing to just say no -