Beyond the Data: Why aid to poor doesn’t work
Epistemic status: I am aggregating talking points and research I have read on my own time over last few years. Likely many errors with memory and thinking. I AM NOT AN EXPERT. Take this as you will.
For anyone who has donated to charity, I imagine the naysayer must be an unwelcome sight, unseemly as they are discouraging. I imagine most of us would choose to ignore them, and for good reason. The talk of “this won’t change anything, it’s just a drop in the bucket, you’ve failed to account for this issue” ultimately doesn’t help people. Something, the rationalist might reason, is better than nothing, and nothing is what we will get if we decide to listen to the naysayer instead of doing productive work.
So, why am I deciding to be a naysayer? The answer, which I hope this community would understand, is because I am a rationalist. I have seen a claim (or at least an implied claim) that I believe is false, and I further believe that sticking with this belief will have a myriad of negative effects. The claim in question is, of course, that foreign/charity aid to 3rd world countries ‘works’ in the sense that it would function as a ‘solution’ for global extreme poverty.
Before we begin, some
Definitions and caveats:
Foreign/charity aid (in this post, I will be using aid in short, as a general term to refer to both) describes any initiative or transfer of cash, undertaken by individuals, organizations, or governments to help impoverished people.
Extreme poverty will be defined by the world bank’s standard of living on less than roughly 2 dollars a day, with the caveat that this is correlated with purchasing power and living conditions. A war refugee with money they can’t spend is no less impoverished than the farmer who makes no money but lives off subsistence.
Finally, (and probably most contentiously), I will describe a ‘solution’ to this problem as a world where those in poverty can reasonably live in prosperous conditions self sufficiently. If we simply hook up every individual in need to an aid system, the problem is not ‘solved’. The reason for this, I hope, is obvious. For any solution to be considered a true solution it must be sustainable. A patient who takes ever increasing amounts of painkillers has not ‘solved’ their heart condition as much as delayed his inevitable doctor visit. In much the same way, a solution to poverty must entail a solution to the root causes of poverty.
If anyone takes issue with these definitions, please feel free to say so. But in the meantime let’s move forward.
Chase for the Holy Grail
Few discoveries have been greeted with so much enthusiasm as plans to end poverty, and yet, most such breakthroughs often disappoint our hopes. To date, over half a billion people still remain in poverty, despite the multiple NGOs, countless governmental projects, and billions of dollars invested in a solution. Thus far, the holy grail has eluded us. And yet, the pressing need to eliminate poverty has not diminished in the slightest.
The negative effects of poverty are well known. Hunger, malnutrition, high infant mortality rate, crime, child labor, disease and death. More than 3 centuries after Hobbes published Leviathan, millions still live lives that are “nasty, poore, brutish and short”, trapped by a never ending cycle of destitution and neglect. In the modern age, the presence of such misery is as confounding as it is appalling. How is it that most of us enjoy such great material wealth when so many people are in lack of basic needs? How is it that while affluent nations produce more food than we could ever eat, thousands still die from hunger each day? In an age of unparalleled growth and affluence, poverty remains, a ghost from the past we should have banished long ago.
All this begs the question: why? Thousands of committed, intelligent people have worked in aid. World leaders have pledged support to humanitarian causes. Certainly they are not idiots! Yet, independently, the data would suggest that they are. If we are going by the world bank’s definition, giving every impoverished person a measly 2 dollars would be enough to double their daily income. Giving them 500 would give them a massive infusion equivalent to a year’s wages. If only we could repeat this for the many million in poverty. While they would have to wait their turn, eventually we would get to them. Surely that would be enough to break the poverty trap, get on their feet, and allow them to become self-sufficient… right?
Not quite
In the rest of this post, I’d like to synthesize summaries and excerpts from some sources I’ve read on poverty, and why it refutes the notion that aid alone is enough to ‘solve’ the problem.
To understand how to help the poor, we must first understand why they are poor, and maybe more importantly, why they stay poor. I found Poor Economics by MIT professors Banerjee and Duflo an invaluable source of insights in this regard. Much of this post will be fragments of their work, and paraphrasing from my recollection. (a very good read, I recommend it to everyone interested about poverty and I will be rereading it myself)
To begin, Banerjee explores the concept of a ‘poverty trap’, a principle I’m sure many of us are already familiar with. Poverty, as it turns out, begets poverty. Lack of funds to obtain an education would lead to inability to find work. Constant preoccupation with basic subsistence drains away energy that might otherwise be invested in devising solutions. Inability to pay for preventive healthcare leads to worsening healthcare outcomes demanding increasingly outrageous payments… and so on.
For the purpose of keeping this post at reasonable lengths, I will not explore all of the scenarios the authors present. But I will cite a few details I believe are important and illustrate the point.
Poverty traps
Poverty traps *keep people poor*:
In a village in Indonesia we met Ibu Emptat, the wife of a basket weaver. A few years before our first meeting (in summer 2008), her husband was having trouble with his vision and could no longer work. She had no choice but to borrow money from the local moneylender—100, 000 rupiah ($18.75 USD PPP) to pay for medicine so that her husband could work again, and 300,000 rupiah ($56 USD PPP) for food for the period when her husband was recovering and could not work (three of her seven children were still living with them). They had to pay 10 percent per month in interest on the loan. However, they fell behind on their interest payments and by the time we met, her debt had ballooned to 1 million rupiah ($187 USD PPP); the moneylender was threatening to take everything they had. To make matters worse, one of her younger sons had recently been diagnosed with severe asthma. Because the family was already mired in debt, she couldn’t afford the medicine needed to treat his condition. He sat with us throughout our visit, coughing every few minutes; he was no longer able to attend school regularly. The family seemed to be caught in a classic poverty trap—the father’s illness made them poor, which is why the child stayed sick, and because he was too sick to get a proper education, poverty loomed in his future.
Poverty impairs rational, planned thinking
Orwell captured this phenomenon as well in The Road to Wigan Pier when he described how poor families managed to survive the depression. Instead of raging against their destiny, they have made things tolerable by reducing their standards. But they don’t necessarily reduce their standards by cutting out luxuries and concentrating on necessities; more often it is the other way around—the more natural way, if you come to think of it—hence the fact that in a decade of unparalleled depression, the consumption of all cheap luxuries has increased
Poverty severely hampers the ability to invest in even the most ‘logical’ solutions
A friend of ours from the world of high finance always says that the poor are like hedge-fund managers—they live with huge amounts of risk. The only difference is in their levels of income. In fact, he grossly understates the case: No hedge-fund manager is liable for 100 percent of his losses, unlike almost every small business owner and small farmer. Moreover, the poor often have to raise all of the capital for their businesses, either out of the accumulated “wealth” of their families or by borrowing from somewhere, a circumstance most hedge-fund managers never have to face. A high fraction of the poor run small businesses or farms. In our eighteen-country data set, an average of 50 percent of the urban poor have a non-agricultural business, whereas the fraction of the rural poor who report running a farm business ranges between 25 percent and 98 percent (the one exception is South Africa, where the black population was historically excluded from farming). In addition, a substantial fraction of these households also operate a non-agricultural business. Moreover, most of the land farmed by the poor is not irrigated. This makes farm earnings highly dependent on the weather: A drought, or even a delay in the rains, can cause a crop failure on non-irrigated land, and half the year’s income might vanish.
We are often inclined to see the world of the poor as a land of missed opportunities and to wonder why they don’t put these purchases on hold and invest in what would really make their lives better. The poor, on the other hand, may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible, celebrating when occasion demands it.
The insights from their work are far too numerous for me to cover fully, needless to say I am not doing them justice. But I believe the above is enough to illustrate my main point, that the impact of aid is often deceptive, and in many cases fail to break the poverty trap, which takes different unique forms across a wide population of different unique people.
To truly ‘break out’ of a poverty trap, the effort and resources demanded are far greater than they might originally appear. In addition to offering the aid necessary to meet reasonable standards of living (and I must emphasize, almost none of these people in poverty live in circumstances even the most impoverished of 1st world citizens would consider ‘reasonable’), aid must ‘pay the debt’ of previous neglect, as a manner of speaking. Countless diseases that could’ve been prevented. Forgone education that must now be returned. Festering crime pits that have never been policed. The costs of yesteryear’s problems have not faded. Rather, like the debt collectors which hound the most vulnerable, they come back, always demanding more from those least able to pay.
And then after this even more challenges await. The unique circumstances surrounding each impoverished community would have to be addressed. Inadequate infrastructure needs to be fixed, corrupt governments reformed, and investments allocated for the necessary ventures that would bring the poor out of poverty. Necessarily risky investments which may never see a return.
This is not to say that aid is futile. Quite the contrary, a timely transfer of cash during a famine may very well save a starving child’s life. However, the point remains that the root problem has not been solved. Corruption, war, limited resources or any myriad of evils will deliver more famished children to our door.
If you’ve read this far, you’ve probably realized something. Hey Lyron, you can’t be the only person to have realized this! Why haven’t people acted based off this information? The answer, of course, is that they have. Sadly, we rarely see any successes. To illustrate the point, allow me to link a video by Polymatter.
Why Aid Fails: The Real World Example
(1) Why Foreign Aid Doesn’t Work—YouTube
At first glance, the Millenium Villages project seems like a dream come true. It was everything we could imagine ‘good’ foreign aid to be. Led by experts who based their approach off scientific research, devoid of middlemen who might make off with the funds, and driven with a determination to end all the root causes of poverty at once. Malaria, inadequate infrastructure, efficient crop production, lack of access to drinking water… everything would be addressed at the same time.
The best part? It wasn’t even expensive. The project, despite it’s grand scale and vision, costed only 120 USD per villager. If it succeeded, it would provide a tried and tested template for eradicating poverty, an effective method that could be emulated across the developing world.
Except… it failed.
The project’s finely planned strategy met of many harsh realities when they ran into an ironic problem. The southern Ugandan villagers were producing too much corn. When selecting for the crop of choice to introduce efficient farming methods with, the project managers had dutifully accounted for crop hardiness, weather, and yield projections. But they neglected to account for the fact that the villagers didn’t actually like the corn! In Southern Uganda, corn was thought of as ‘prison food’, and there was no buyers.
Facing disaster, the project scrambled to find a viable alternative. Commercial farming was suggested, except they soon ran into another problem. Namely, that the nearest water source was 3 miles away, and required the villagers to go retrieve more water… on foot. Pipes were too expensive to ship, so the villagers relied on donkeys, which unfortunately, also failed. Most of the donkeys died after a few months.
The problems with the project didn’t end there. I highly encourage watching the full video, it’s quite informative. However, for the purpose of this post I think the point has been sufficiently made. The project, despite the very best of intentions, expertise, and planning, could not possibly account for all the contingencies and unique demands of the community. The ‘tried and tested’ handbook the project aimed to create did not materialize. Observing the evidence, we are encouraged to believe it ever existed.
When all was said in done, it was estimated that 12,000 USD was spent per household lifted out of poverty. A monumental achievement for sure, but at a cost which far exceeds the amounts we are typically accustomed to giving. Certainly far more than the 350 USD annual income of these households, and far greater than what many could stomach. Many of us are used to the ads that boast of every 2-3 dollars saving a life. These comparatively mammoth costs dwarf the paltry sums sought by other charity organizations.
Having now reviewed a myriad of reasons why poverty persists, I’d like to focus on what I personally believe is the most important factor: institutions.
The Institutional Problem
Ultimately, we can observe that the most effective forms of aid tend to not work in isolation. Rather, they’re amplified by the capacity of the state to absorb the funds and transform it into better outcomes. Turkey was able to recover from devastating earthquakes. Botswana’s economic miracle allowed it to reduce poverty by 10%. For a more familiar example, I might bring up the Marshall plan aid, which for a comparatively modest 13 billion rebuilt western europe after the most devastating war in history.
Meanwhile, in states where institutions fail, all the basic necessities of life tend to fail with it. Consider, for instance, South Africa.
(1) South Africa’s Slow, Inevitable March Towards Collapse—YouTube
Once a shining beacon of hope, South Africa is now in crisis, gradually regressing to ever escalating issues with energy and most functions of state. Decades after the end of apartheid, we still see the legacy of defunct institutions at work.
South Africa has an issue with power generation. Not because of some unforeseen disaster, or lack of resources to fix the issue, but rather, political dysfunction. The ruling party’s corrupt and ineffectual government has led to years of neglect on South Africa’s energy grid, turning what used to be a power exporter running a healthy surplus to a nation constantly in deficit. To day, South Africa faces rolling blackouts on a daily basis, with ruinous costs skyrocketing into the billions.
Can aid solve the problem? The answer, most would agree, is not really. The problem of bad planning, ineffectual governance and corruption are not issues related to a lack of resources. Rather, they stem from a lack of ability to use resources properly.
Political ineptitude is in no way a situation unique to South Africa. Defunct institutions are everywhere. Look at American healthcare, Mexican crime, Hungarian corruption or Chinese properties, and you will see the same issues. Resources allocated poorly are the root of the problem. More resources, when used wastefully, will not produce the desired results. Just think of Mao and Stalin, who seized grain for their ambitions of production while their people starved. Was it lack of food that was the issue, or policymaking?
The strength of institutions, which aid to the poor mostly or completely circumvents, is often the strongest determinant of their welfare. A well functioning state can provide security, public services, peaceful transfer of power, unified responses, all the manner of basic prerequisites for the development of prosperity. In the absence of such conditions poverty traps are often inevitable. Why build wealth, when nobody can stop the rampant banditry who would plunder your earnings? Why produce more, when there are no markets to sell to? Why make money when the region has no goods to purchase at any price? Why listen to the good hearted but foolish ‘aid’ organizations, who don’t seem to understand even the most rudimentary aspects of their lives?
This is only the beginning. In the absence of strong institutions the government becomes mired in corruption, neglect, incompetence, or worse of all– war. Picture the child soldier, picking up a gun after his father has been murdered, and a perfect illustration emerges of why money alone cannot solve the problem.
Societies, much like the people living in them, are not children. We cannot expect them to be constantly dependent on outside support. While it’s of course our duty to alleviate suffering as best as we can, a people must ultimately be responsible for their own destiny.
Conclusion
So… what can we do, you might ask? You may have read this far hoping I would present a solution.
I’m sorry to disappoint. The answer is, unfortunately, that I don’t know. Having read what I did about poverty I have came across scant solutions and ever greater and compounding problems. I cannot claim to know what works. Only what does not.
All of this said, you may be surprised to learn I’m still very much in support of donations, and aid in general.
Despite the danger of underestimating the problem, I find the dangers of overestimating it to be just as insidious. Despair is no solution to great challenges. If anyone is thinking about donating, I would strongly encourage them to do it. At the end of the day, every contribution is a contribution, no matter how small, and aid doesn’t need to be life changing to make a difference.
Think of all the things you have done for other people. A hug here, a smile there. A word of encouragement, a laugh of joy— so many things can be meaningful, even if we don’t realize it. The impact of aid would be far bigger, not just physically but psychologically as well. Small as our individual actions may be, together they work towards something greater. We must not forget that civil rights was won by the collective actions of many individual people, and the Nazis won power from lack thereof. In choosing to do, or not to do, individuals can change the actions of the group. Though not always, this can often change the world.
There is a peculiar power to giving. It is, in many ways, an affirmation of the self. Despite the naysayers, despite the doubts, despite the constant nagging feeling that nothing you do will matter. Despite the lack of action by society, which seems to have gotten too tired to care. You can make a difference… here, now, by showing them that they are wrong. That you refuse, regardless of how hopeless it seems, to merely accept the situation. That you are willing to help.
I know there will be some people reading this who have donated already, or contributed to similar causes. I’d like to stop for a moment and offer them some thanks. They are the reason I can keep on hoping.
I will be giving 50 dollars to givedirectly, the charity organization that inspired me to write this post. I found their fundraising here. I understand this isn’t much, but then, I am a student with no allowance. This is essentially all I am able to give. I hope this little gift could inspire some others to give more.
If not, I will know that this money went to someone who needed it more than me. Maybe for food, which they hungered to buy. Maybe for entertainment, for which they’ve been equally starved. Maybe a gift for a dear family member, or treatment for a disease. Or maybe just for another day of rest, well earned after long days of strenuous work.
Whatever happens, I hope that they will be happy.
Endnote: Woah! This ended up being way longer than I expected. Whoever you are, thanks for reading this all the way to the end! This is my first real post, and I wrote this over a few hours while sick, so I imagine I’ll have made a whole bunch of mistakes. Any feedback is welcome, I appreciate it. If you have any critiques/thoughts in general, feel free to drop by in the comments.
(Forewarning: I will probably be busy, so excuse slow/nonexistent responses)
Links:
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty: Banerjee, Abhijit V., Duflo, Esther: 9781610390934: Amazon.com: Books
I appreciated your post, (indeed, I found it very moving) and found some of the other comments frustrating as I believe you did. I think, though, that I can see a part of where they are coming from. I’ll preface by saying I don’t have strong beliefs on this myself, but I’ll try to translate (my guess at) their world model.
I think the typical EA/LWer thinks that most charities are ineffective to the point of uselessness, and this is due to them not being smart/rational about a lot of things (and are very familiar with examples like the millennium village). They probably believe it costs roughly 5000 USD to save a life, which makes your line “Many of us are used to the ads that boast of every 2-3 dollars saving a life...” read like you haven’t engaged much with their world. They agree that institutions matter a huge amount and that many forms of aid fail because of bad institutions.
They probably also believe the exact shape of the dose-response curve to treating poverty with direct aid is unknown, but have a prior of it being positively sloped but flatter than we wish. There is a popular rationalist technique of “if x seems like it is helping the problem, just not as much as you wish, try way way more x.” (Eg, light for SAD)
I would guess your post reads to them like someone finding out that the dose-response curve is very flat and and that many charities are ineffective and then writing “maybe the dose-response curve isn’t even positively sloped!” It reads to them like the claim “no (feasible) amount of direct aid will help with poverty” followed by evidence that the slope is not as steep as we all wish. I don’t think any of your evidence suggests aid cannot have a positive effect, just that the amount necessary for that effect to be permanent is quite high.
Add this to your ending by donating money to give directly, and it seems like you either are behaving irrationally, or you agree that it has some marginal positive impact and were preaching to the choir.
As I said, I appreciated it, and the work that goes into making your world model and preparing it for posting, and engaging with commenters. Thank you.
Thanks so much for your comment!
Hm… yes, upon further reflection your summarization seems accurate, or at least highly plausible. I am not too sure what the mindset of the average LWer or EA looks like myself. (although I’ve frequented the site for some time, I’m mainly reading random frontpage posts that pique my interest, I don’t attend meetups, participate in group activities, or much other things of that nature) It’s not merely reading like I haven’t engaged much in their world. The truth is I simply haven’t, I have no intention of hiding it. I tagged the post EA because my points on aid address charities in general quite broadly, and so I thought it would be of interest to EA adjacent individuals. I also hoped that they might be able to enlighten me a bit on the many parts of EA I still don’t fully understand. The post was never meant to critique or even focus on EA.
This may have gotten lost in everything else I was attempting to do in the post, but one of the central motivations was to disprove a point I saw in a RA fundraiser that unconditional cash transfers could ‘eradicate’ global poverty. I found the initiative commendable, but unrealistic for a variety of reasons, many of which I detailed in the post. I never meant to say the aid wouldn’t help, but rather, it was likely insufficient to meet their goal of ending long term poverty.
That said, yes, you are right. My evidence does not support the claim that aid is completely ineffective in ending long term poverty. But rather, that aid requires much higher volumes to solve the long term issues, in conjunction with many other things. In my mind this was still meant aid was an inadequate solution since I didn’t believe the volumes required to solve the issue would be a reasonable demand upon charity or foreign aid (just look at the enormous price tag of millennium villages). Thinking back, I probably exaggerated a bit in the title and in some of my claims. While the logical points may have been sound, I may have mispresented them in the title and elsewhere. (I realize I sound a bit silly in hindsight, it’s easy to see how people might interpret the phrase ‘doesn’t work’ as useless versus inefficient to the point of implausibility)
I think part of my issue with this post is that I’m really just uncertain what my audience believes and how they might react or interpret different things I say. While I have some idea and a few vague guesses, there’s no real way to know for certain. I’m also unsure if I would have any way of knowing without simply accruing direct experience, but your thoughts definitely helped me in this regard. I will keep in mind your model of LW when making posts in the future. Thanks once again!
That said, do you have any critiques/questions regarding the post personally? I’d be happy to continue chatting about any potential weak spots or logical errors.
I don’t buy that. To me, this article doesn’t engage enough with the EA ideas or the actual changes in poverty.
Most of the people who are rationalists and who would want to donate, would donate for EA charities and examples of how non-EA charities failed don’t help very much with that.
The Millennium Development Goal of halving the amount of people living in extreme poverty was achieved. How does that square with your claim that the aid didn’t work at reducing poverty?
Right, maybe I should’ve clarified. For me, this post was about charity and aid in general, not EA in specific. Apologies for any confusion involved. I tagged the post EA because the post that inspired mine was EA adjacent and because I felt that much of what I said about charity in general also applies to EA. I’m new, so I don’t fully understand the tagging system. If my reasoning for the tag is flawed feel free to explain how, and I will remove it.
That said, let me break down my thoughts on EA charity once again, for the sake of clarity. I believe that everything I said in this post (ignoring institutional problems, not addressing poverty traps, being blind to nuances of specific situations) also applies to EA charities. This is not to say that other charities don’t have the same problems, but rather, that EA has them also. Now, I won’t claim to be aware of a wide scale of EA charities, in fact, I’m still new and I’ve encountered only a very few, with the one I referenced in the post being one example. I understand there might be many more, but when I made this post I had the unconditional cash transfers in mind.
The unconditional cash transfers, while circumventing many issues (middlemen, corruption, etc) fail in my view to address the myriad roots of poverty. Presupposing that there are markets capable of supplying needs for the recipients at scale, we would likely be safe in assuming that the recipients have a temporary boost in quality of life. We would not, however, be safe to assume that crime would go down, schools would be built, healthcare would be provided for… etc etc. Fundamentally, the unconditional cash transfers are just that: cash transfers that are unconditional. There is no impetus for providing any long term solution to the root issues at play. Do you take issue with this reasoning? If so, feel free to respond as such.
The reason I chose the millennium villages project was because it was an answer to my own framework. Unlike unconditional cash transfers, it made a serious (and under certain viewpoints, successful) attempt at addressing root issues. I could’ve used my framework of analysis to critique unconditional cash transfers, but I don’t think that would have been worthwhile. Clearly if you accept my framework that institutions and unique circumstances make poverty hard to solve there is little doubt that cash transfers will not be an adequate solution. Use of the project, was, in short, my attempt at steel manning the position that aid works or could work.
That said, if you have any examples of aid that has ‘worked’, I would be happy to look over them. For the purposes of this post I was merely laying out general principles I had gathered from a variety of sources. I do not have the same depth of research or knowledge as an actual subject matter expert, hence the disclaimer.
Onto the point about the goal of reducing poverty by half, I don’t dispute that. The problem is, however, that I don’t believe it has any great connection to aid. For instance, here is an article from the world bank on how China has contributed the vast majority of people lifted from extreme poverty. While it’s fair to claim the west has benefitted from economic growth, the causes of China’s rise have little to do with charity aid and more with improved governance, western investment, and sheer force of population. China’s poverty was not reduced by an influx of aid programs, but rather, a rapid industrialization that resulted in massive quality of life increases. This increase was in large part due to the growth of trade networks, infrastructure, and other fruits of strong (if corrupt) institutions. I don’t have any evidence directly on hand for this claim, but I think most would agree with it from common sense and their understanding of history. If you would like more rigorous proof feel free to request it. I don’t believe its necessary.
People exit poverty for a variety of reasons. It could be immigration, hard work, freak luck, or even aid, in some circumstances. But by and large I believe that history proves institutions to be the strongest factor behind poverty eradication. Attributing the poverty reduction of recent decades to aid alone is grossly misleading. As such I don’t find reductions in poverty to contradict my claim that aid fails. If anything i find it to prove my point, as the poverty decrease correlates with institutional growth (particularly of markets under a strong central government) rather than aid.
I hope this answers any questions you may have had. If not, feel free to ask for clarification. I’m new and still learning, so please feel free to correct me.
Basically, you have some belief about the importance of addressing root causes, for which you don’t lie out evidence.
Basically, your way of reasoning is that you dislike reasoning by empiric evidence and rather want to trust your intuition.
That’s not what rationalism is about. It’s rather about looking at empiric evidence and part of the reason that GiveDirectly gets recommended is that they manage to gather evidence about the effect of their interventions.
For all GiveWell-recommended charities, GiveWell has a document that describes the evidence that they work.
If we take Nigeria as the largest African country by population it had 52% of its population living on under $2.15 2017 PPP dollars in 2000 and only 32% in 2015. While that’s not completely halving it’s still a strong success at reducing poverty.
I’m… not too sure how to respond to this. For the first half of my post I focused almost exclusively on the causes of poverty, poverty traps, and the basic concept that poverty doesn’t simply disappear until the root causes are addressed. In the Millenium villages project I summarize the findings of many root causes, including lack of infrastructure (and subsequent lack of access to world markets), the settlement being distant from water sources, and a general lack of relevant infrastructure (schools, hospitals, etc) that caused the region to be so impoverished to begin with. Then in the institutional problem section I bring up the example of South Africa, which faces dire economic meltdown largely due to corruption and failure of energy infrastructure. In response to your post I also brough up the example of China, which developed through the presence of institutional growth and sound policymaking, and regressed to famines when none of these were present. (see the great leap forward under Mao)
In all of the examples I mentioned, we will find:
That there are a multitude of causes for the poverty, not just a direct lack of food or money, but rather, a root cause that will continue to create more poverty if left unaddressed.
A failure of institutions directly causing or being related to causes of poverty or hunger. (infrastructure failure and policymaking failures are of course part of what a state’s institutions are meant to deliver, which failed to in South Africa and CCP China under Mao)
No significant correlation between aid and improved outcomes. And, to the contrary, significant correlation between institutional growth and outcomes.
I am, to the best of my knowledge, using deductive reasoning. I begin from the general principles of what causes poverty. These principles, however, are not intuitive, nor did they originate from me. I cite multiple sources, historical precedents, and an entire book by award winning MIT researchers. Does this not count as rationalism? I believe I have used a variety of empirical evidence, although not all of them had fancy graphs to accompany them. I am also ready to defend the validity of my sources and the conclusions they draw. Do you take issue with any of them? If so, feel free to state your opinion.
As for Givedirectly specifically, I can mention a few issues I see with it’s claims of ‘effectiveness’. In the fundraiser video I linked previously, they mention a 2016 study finding an increase in incomes and spending (as expected), as well as positive economic effects 4 years later. HOWEVER… a follow up 9 years later found no continued effects. Insofar as meeting my metric of solving long term issues of poverty, GiveDirectly fails. Insofar as truly breaking the poverty cycle (which would mean a sustained rise in incomes), it also fails. Nevermind their lofty goal of ‘eradicating global extreme poverty’ claimed by the fundraising video. Is this sufficient empirical evidence in your view?
I understand that GiveDirectly may or may not be more effective or empirical than other charities. I do not, however, understand how it would meet the goal of ‘eradicating global extreme poverty’, which seems to be their stated goal. I can continue to find more examples with ease, but I don’t think I need to. Instead, I’d like to ask that you bring forward an example of aid being effective in reducing long term poverty at reasonable cost. If such an example does exist, and is fairly common, I imagine you would have no trouble finding it. If this is not the case, I don’t find sifting through hundreds of failures to be a worthwhile use of our time.
Now, onto Nigeria. I am once again unsure what your argument is. Yes, Nigeria has seen poverty reductions. So has China, and many areas in the world. I do not dispute that poverty can be reduced, only that aid alone fails to reduce poverty. Is there a proven connection between aid and poverty reduction in Nigeria?
The world bank seems to believe otherwise.
Note that the big struggles the world bank references are in the realm of infrastructure, reform, and governmental action to both utilize resources and improve healthcare outcomes, as well as address corruption. The problem is ‘structural reforms’, the solution is ‘structural reforms’. Altogether Nigeria only strengthens my point about institutions being key to economic improvement. In fact, one of the world bank’s key observations is that:
In other words, a myriad of root issues is causing poverty, not just direct lack of funds. In fact, even data about people breaking out of the poverty line can be misleading, because monetary gains may not increase access to social services or improve outcomes in other areas. Aid, charitable or otherwise, has not been mentioned by the world bank as a decisive factor in curbing poverty. Thus in every way Nigeria supports my thesis about poverty having root causes aid fails to address.
I have yet to come across a strong argument indicating that aid alone is sufficient to end poverty. You seem to believe otherwise. Can you find an example of this being the case? Thus far, I don’t believe you have made a sufficiently strong case for the negation of my claim. You have also neglected to state your competing viewpoint.
I have to ask what your view is. What do you think causes poverty? What do you think will solve it, long term? With such a wide gap in context it’s extremely difficult to understand where you are coming from. I am unsure if I see what the crux of this disagreement is, but if you would like to we could continue to find it.
You seem to be relatively unclear about what exact thesis you are arguing for. It’s quite possible for aid to be useful and work together with other factors.
Thinking in terms of reducing poverty makes it easier to measure progress then if you think in essentialist terms about “ending poverty”.
Absolute numbers aren’t as interesting as how the number changes over time.
That’s a bad question if you treat it as the central question. The better question is: “What interventions will reduce poverty?”
If I want to help someone who has a broken leg asking “What caused the broken leg?” only helps in a relatively minimal way with understanding the evidence-based treatments that actually help.
A core feature of the evidence-based revolution in medicine is about deemphazising the question about causes (or pathophysiological reasoning as the original paper that introduced the term calls it) when it comes to picking treatments and rather focus on measuring the effects of treatments in a systematic way.
Effective Altrusim is in part of a movement to do the same that Evidence-based Medicine did in the realm of philanthropy.
Ok, in that case, allow me to clarify.
I believe that while aid can be useful or effective in many instances (note that here I am using a much more limited definition of providing immediate quality of life boosts, as opposed to a long term solution), the effect does not extend to address long term issues that cause poverty. Thus poverty will continue to persist without being eradicated (what I would view as real effectiveness). Basically, while painkillers can help you with a broken leg, your leg is still broken. Painkillers alone, independent of other treatment, will fail to be effective in actually helping you walk again.
Note that I am not comparing the effects of different painkillers. I do not distinguish between scientifically researched painkillers and scientifically unsound homeopathy. That is besides the point of the post. The post is mainly about how painkillers cannot independently solve the problem. This is why I am not researching EA adjacent charities in greater detail. EA is a facet of the post, but not the focus. I have attempted to explain this in both my post and my response.
In plain language, I am saying that interventions may be successful in alleviating the negative effects of poverty (malnutrition, death, disease) over the short term. But they fail to address the long term causes of poverty and thus do not provide a feasible long term solution. Thus while it may ‘reduce poverty’ in a limited way I do not feel it meets the criteria for a meaningfully sustainable solution. I’ve already provided a long and exhaustive list of evidence for this, both in my post and my responses. I do not believe you have addressed my evidence properly.
I find that this has become a reoccurring pattern in our conversation. I have outlined many lists of evidence and why I believe it supports my thesis. Are you willing to take the time and examine them? If not, I don’t believe it will be productive to continue. In the interest of respecting your time I have done my best to summarize, analyze, and cut out relevant excerpts I believe support my argument. Can you do the same? If not, this will likely be my last response.
The key here is the question of what evidence implies what.
One sentence you wrote is: “To understand how to help the poor, we must first understand why they are poor, and maybe more importantly, why they stay poor.”
I basically answered by saying that the Millenium goals show that the poor don’t stay poor. You answered that this effect is strongly dominated by China. I responded by pointing on the largest African country and pointing to it’s success in poverty reduction and linked to statistics for all African countries showing that Nigeria is not untypical here.
You then said, well Nigeria is still “poor” by another metric. I grant that poverty in Nigeria isn’t completely eliminated. I then asked, okay, what about whether they made progress by the metric you care about?
If the answer is that they made some progress but there’s still a long way to go, you can argue that it’s not a full solution. That’s however a very different claim from it not being helpful.
Given that there’s no regression back to the levels of thirty years ago, the changes seem to be sustainable. They also seem big enough to be meaningful.
I like the way your text raise expectations for one conclusion and then present your actual thoughts (that none of these points overcome the danger of overestimating them).
However this is a sensitive topic on LW, so maybe a good precaution would be to clarify upfront that you’ll present a series of typical past failures rather than a logical case for why altruism can’t be efficient.
As an example, I was frustrated when the experts who based their approach off scientific research turned to not knowing to local market. How is that based on science? But ok, now I get this is illustration of a typical failure, not demonstration we can’t escape this failure mode.
Interesting points about the importance of free will and institutions. Maybe we could regroup that in one working hypothesis (institutions powered by citizens is the proper/efficient way to escape poverty trap)?
You’re right, that’s probably a good idea. I considered a more comprehensive disclaimer myself when writing, but then opted against it when I realize it was likely to weaken the main point of my post. Even though this post is constrained by being only able to consider past failures (I have no information about the future), the past is still a very strong predictor of how the future turns out. Based off analysis of the past I’m still inclined to believe that foreign/charity aid by itself is insufficient to solve the root causes of poverty. I don’t believe altruism is inefficient per se, or that the problem of poverty can’t be solved (of course it has been). I am merely seeking to rebut the claim that I have seen in the fundraiser video, which seems to imply that charity aid alone would be enough to eradicate poverty (a claim which I find wildly overblown). I find action worthwhile, but I also find that the predicted resulted don’t seem to meet the scale claimed by many people. I thought I was clear enough in this regard.
But then, after a few recent comments I’m inclined to believe I definitely misrepresented my case somewhere, or maybe my language was unclear. However, it’s a bit difficult for me to pinpoint where exactly the miscommunication occurred. Could you elaborate on that point? This is my article, so it’s quite difficult to see where I goofed up. This is all in my head, so it’s quite obvious to me. If you could provide a disclaimer text for me I would be immensely grateful.
Regarding another working hypothesis, I believe I could do that, but I’m unsure if I’ll have the time or will to amass the relevant evidence. Proving the negation of a claim is much easier than proving a claim. Institutional economics (a school of thought which believes institutions to be the greatest determinant of economic success) is already the position of many thinkers, and if I were to defend it I would also have to research competing economic theories and many more real world examples to do it justice. Not to mention that I’m not an economist myself. I feel like Poor Economics (which has in it’s thesis a focus on individuals) and Why Nations Fail (which studies how institutions affect growth) offer far better analysis than I could hope to, so I’m disinclined to create the thesis. I don’t believe it’s necessary when other people have already created better sources to study. Instead I’ll just point those interested to the relevant bodies of research.
Is your opinion different? I’d be happy to discuss the merits of a separate post or edits to this one.
I think you just got the wrong audience. People assume that you’re referring to effective altruism charities and aid. The average LessWrong reader already believes that traditional aid is ineffective, this post is mostly old info. Your criticisms of aid sound a bit ignorant because people pattern-match your post to criticism of charities like GiveDirectly, when people have done studies that show GiveDirectly has quite a good cost-benefit ratio.
Your post is accurate, but redundant to EAs.
Also, slightly unrelated, but what do you think about EA charities? Have you looked into them? Do you find them better than traditional charities?
Hm? I’m unsure if I presented my point correctly, but my intent was to show that aid in general tends to not resolve the problems causing poverty, irrespective of cost/benefit. I think I brought this up in another comment, comparing it to painkillers. If your leg is broken a painkiller will probably help, cost effective or not. But your leg is still broken, at the end of the day, and the painkiller doesn’t actually ‘solve’ the problem in the same way a surgery and a splint would.
Do you take issue with this?
On that note I do believe many EA charities (givedirectly especially) does seem more effective than many traditional interventions (notably, giving corrupt governments money and telling it to spend on the people rather than the army). My stance is still roughly the same regardless though on aid. Effective or not it fails to resolve the root issue.
I do believe your main point is correct, just that most people here already know that.
Understood.
I can speculate the negative tone you got has something to do with misunderstanding your intent (Do you want to prove EA is doom to fail? I don’t think so but that’s one way to read the title.) but in truth I can’t exclude gatekeeping, nor talk for the LW team.
Ok then, this was more of a clarification question (Is this your thesis in one sentence, or you feel that’s a different thesis? A different one.). Thanks for the thorough answer with pointers, I’ll have a look with pleasure.
Hm… right. That would make sense. I think I can see how people might misread that. No, I had no intention of doing anything like that. I was trying to address the shortcomings of charity, particularly in the realm of structural and institutional rot (and the other myriad causes of poverty). EA charity faces many of the same issues in this regard, but ‘doomed to fail’ is hardly the point I would like to make. (If anything I try my best to advocate the opposite by making a donation myself) I was merely trying to point out that foreign/charity aid in general cannot hope to solve ingrained root causes of poverty without substantial, unsustainably large investments.
Part of the issue may have to do with my writing style. I try to aim for emotionally evocative, powerful posts. I find that this is a good way to get people engaged and generate discussion. (It also tends to be more fulfilling to write) This seems to have gotten in the way of clarity. Given the weight and circumstances of the subject matter (millions of people living in misery) I thought it was more than appropriate to amp up my language. Of course, this is still no excuse for being unclear. I should probably re-examine my diction.
That said, do you think I could change the title or edit in a disclaimer? The title itself was largely a stylistic choice, while I certainly could’ve said ‘aid to the poor has certain practical limitations’ I feel like that’s hardly interesting nor conductive towards sparking a discussion. I am ultimately still presenting what I believe is a more controversial thesis, and I thought my title should reflect that.
In my head I rephrased that thesis as poor institutions and practices can impair efficiency totally, which I found as unsurprising as a charity add turns as not entirely accurate. So if you target readers who find this controversial I may just not be the right reader for the feedback you seek.
Still, I gave some time thinking at: What could you do to make me update?
One way is to beware more about unfairness. Instead of mere illustration of failures when your thesis was ignored, can you also present cases where following this very thesis did make a success? What are the alternative hypothesis that could explain the effect as well? What prediction would make you reject the thesis? The more I’ll see you ask yourself these questions, the more I’ll trust your opinion.
Another way is to go one step more precise. What’s the minimal institutions before charity get efficient? How much efficiency do we gain for what progress in institutions? Could you find if institutions explain more variance than, say, war and corruption? The more I’ll know about this kind of things, the more I’ll believe in the parent thesis.
Just some thoughts. Good luck with your next text, I expect I’ll like it. ;)
Right, that makes sense, and it was part of the angle I was taking. When I said controversial I was mainly referring to the more general claim that aid tends to be ineffective in reducing long term poverty, with few exceptions. (the implication being that aid fails to address institutional issues) The idea that monetary resources plays a small (or as I argue, largely negligible role) in addressing long term issues seems to me like it would be controversial to many EAs. But then, this mostly semantical and hardly the main point. Let’s get into the heart of the issue.
A very insightful question. I was initially a bit dubious myself. Where has my thesis been followed by aid organizations? Certainly I don’t recall any charities focusing on reforming government institutions! But then, on second thought, that was almost the entire point. It wasn’t aid programs reforming governments, but rather, people.
Consider all the wealthiest nations in the world. With few exceptions, the richest nations are the ones with strong institutions, particularly representative, democratic ones. Although there are exceptions, they tend to be few and far between (see Singapore with an authoritarian technocracy that’s ruthlessly efficient, or Qatar with their absurd amounts of oil wealth. Meanwhile, nations with defunct or nonexistent institutions (see North Korea, The Congo, Mexico, South Africa) invariably face poverty and destitution on a mass scale. Even in China, one of the great economic success stories, we still see defunct instructional inheritances like the hukou system result in situations like 25% of the Chinese workforce being trapped in subsistence agriculture (compared to around 2% in the US, mostly industrial farmers).
In that sense, I believe I can answer your question about precision.
I would liken institutions to a force multipliers in the military sense. One soldier with a gun >>> one hundred soldiers with spears. In the same way, powerful institutions enhance the ability of monetary and other resources to address poverty. Consider the following example, Mexico. Mexico has 44% of it’s population living in below subsistence conditions, with about 9% in extreme poverty. Part of the reason for this is stark inequality. In 2021, the wealthiest 10% of households held nearly 80% of household wealth. Meanwhile, the bottom 50% have less than 5% of the wealth, and the figure has only decreased over the years. Even among the top 10%, inequality is appalling, with top ranking businessmen like Carlos Slim making billions through corrupt business practices that plundered the country’s wealth and gutted it’s government.
What difference does more money even make, in a situation like this? Even if household wealth were to double tomorrow the poorest households would still be teetering on the precipice of starvation as kleptocrats like Slim make billions. The problem is not inherently lack of food, of resources, of technology or productivity. But rather, deeply rotten, unfair institutions which favor businessmen like Slim at the expense of the bottom millions.
I could probably continue for hours on the one example of Mexico, but I don’t think I need to. Kraut has already done a long, several hour long series on the development of Mexican corruption and institutions.
(1) The Mexican American Border | From War to Wall—YouTube
The bottom line is that institutions matter, not just as a sidenote enabling aid but the chief driver of prosperity in nations. Strong market and regulatory institutions in the US created the incentives necessary to create world renowned innovators and technologies. Gates with Microsoft computers, Jobbs with Apple phones, and now openAI with GPT. Even beforehand the countless explosions of patent technologies and industrial growth was one of the chief drivers of American wealth. This is not merely the case now, but throughout all of history. When our strongest companies and businesspeople succeed we can hope to enjoy (at least partially) increased tax money, social benefits, and increased income and jobs. Though these institutions aren’t perfect, Americans can share or at least coexist with the benefits of growth. The same is not true in Mexico, where a zero sum game sees people like Slim win at the expense of everyone else.
In that sense, I find this question rather misguided.
As I illustrate with Mexico, institutions do not explain more variance than war and corruption. Rather, they are the very causes of war and corruption. Lack of institutional safeguards and transparency create situations where the elite can plunder the wealth of the commons. You will notice that Slim did not successfully get away with his business practices in the US. Institutional safeguards like a (mostly) functioning legal and justice system forced him out with countless fines. Meanwhile, many others like Slim may steal from the Mexican people with impunity. They are the reason why the Mexican government colludes with cartels. They are the reason why crime stays at appalling highs. They are, in short, the reason Mexico is poor. To date there are more rich Mexican Americans than there are rich Mexicans. How comically tragic is that?
Then there is war. We have to remember that lack of checks on autocratic power is often what causes this problem in the first place. See Putin in Ukraine, the countless warlords in Africa, or, most famously, Hitler in Europe. Fundamentally we see how lack of constraints on warmongering dictators allows wars of conquest, genocide for national or ethnic grandeur. Actions that would be unthinkable in democracies are a fact of life in dictatorships, simply because the dictator has power and their personal interests do not align with the interests of the state.
The issue of institutions are not unique to Mexico. Rather, we see them all throughout the world. The best comparison I can think of is the difference between Poland and Hungary, both former Soviet bloc states from similar beginnings which eventually saw a massive shift in institutional development. From similar beginnings, they took dramatically different paths. Poland, following the devastation of Soviet rule, was able to reconstruct following lines of western institutional development, with free markets, fair elections, and checks on elite power. Hungary, meanwhile, followed a very different path, echoing the plunder of formerly state owned companies by Russian Oligarchs. To date, Hungary is the most corrupt country in the EU, a country ran by a select business elite with connections to dictator Victor Orban. And make no mistake, he is a dictator. Now, years later, the economy of Poland is projected to overtake the UK. Meanwhile, despite generous EU subsidies, 20% of Hungarians face risk of poverty or social exclusion.
As someone who has studied history and modern politics as a hobby, I can point you to any number of examples. Success in Botswana. Failure in Haiti. Famine in Russia, in China, in India. Economic miracles in South Korea, in Japan, and in Taiwan. I could craft 3 separate posts worth of content and it would still not be enough. But I think this is sufficient to underscore my point.
I will concede that there are still exceptions. The Gulf Arab monarchies survive off natural resources soon to fade into irrelevancy. Singapore and China off efficient (or at least supposedly efficient) models of governance that we already see failing in China. But they are tiny, with unique circumstances, whereas the modern liberal democracies are almost without fail rich and well developed.
In that sense, I’m led to believe Fukuyama was right in some aspects. Though it may not be the end of history, Western liberal democracy certainly is a contender for one of the greatest innovations humanity has ever made, with it’s strong institutions, rule of law, free markets and respect for human dignity. It has, more widely and more consistently than any other method, driven out poverty and raised nations to prosperity.
Does this make you update? Regardless of whether you do or don’t, I’d appreciate your thoughts. Thank you for the question! It forced me to think deeper about my beliefs and justify them more coherently. I’m unsure if this is helpful in the realm of aid specifically, but I believe it does provide ample evidence for my thesis and raise it’s coherency.
I update for stronger internal coherency and ability to articulate clear and well written stories. That was fun to read!
Now I don’t have the same internal frame of reference when it comes to evaluate what counts as evidence. I can accept a good story as evidence, but only if I can evaluate its internal coherency against other good stories one might believe in. Let’s cook one to see what I mean: « In a distant planet far away from here, there was a rich country and a poor country. Then rich country elected religious cranks who decide to start a « war on drugs », whatever that means. What that means turned out to be: a large flow of money in criminal hands, then collapse of the poor country under corruption and political violence. Then rich country look at poor country and says: don’t you think you’ll be richer with better institutions? ». Back to what count as evidence: I can update on one’s perception that this or that good story looks like the real world, especially given you seem to know a lot on this topic. But as with your multiplicative model (insightful!), the amount of update will be proportional to demonstration of knowledge time how hard I feel you explored good contrarian-to-your-own-preferred-view candidate thesis.
Here again, we don’t have the same frame for causality. To me, your illustration is a concomitance, and a concomitance can be explained either by:
a causal link from institutions to war and corruption, which means if you could randomize acting on institutions, you could statistically impact war and corruption.
a causal link from a weighted average of war and corruption, which means *if you could randomize acting on war and corruption, you could statistically impact institutions *
an unknown unknown is acting on them all
the random generator is funny
So, if I wanted to conclude on option A specifically, I would need to explain why I can ignore the alternatives. Then I could say I have evidence for this or that causal link, not before.
Maybe that should be another post, but I prefer contender for one of the less shitty. Since Hitler we knew it was either fragile at birth or vulnerable to far right ideology. Since Putin, Trump, Erdogan, Netanyahu, etc I believe it’s fragile, period. Also, you might have noticed that the less shitty of all system is mostly incompetent in face of global warming, which means our present prosperity is paid by taking money from an usurer. Our society also just proved fragile to pandemics, with more and more who could learn how to start one. And many here believe our western society are also fragile to rogue AIs, again while we’re closer to be able to build some. Maybe none of this matter and better democracies will emerge from our old world, maybe with the help of technology, but I don’t see how we can claim victory yet. At best we won a few rounds, that’s it.
Thanks for your reply!
Yes, you’re right, I realize I was rather thin on evidence for the link between institutional weakness and corruption. I believe this was like mind fallacy on my end, I assumed the link was obvious. But since clearly it was not allow me to go back and contextualize it.
Disclaimer: It’s late and I’m tired, prose quality will be lower than usual, and I’ll be prone to some rather dry political jokes.
To understand the link between institutions and corruption, I think it’s helpful just to use simple mental models. Consider this simple question: what causes corruption? The answer seems fairly straightforward. People are corrupt, they want money, etc etc. But clearly, this isn’t everything. Humans in different countries coming from similar racial, social, and class backgrounds tend to be varying levels of ‘corrupt’, but even countries with similar backgrounds often have wildly varying corruption levels. Take North and South Korea, for one example. Both were unified states emerging from occupation post WWII, but they took wildly different paths in their development as countries.
South Korea eventually transitioned from a military dictatorship to a free market democracy who know today. North Korea, however, remained a military dictatorship. This resulted in stark differences in corruption handling on both sides. In the global corruptions perceptions index, South Korea ranks 31st, while North Korea ranks an appalling 171st. Why was this?
The answer, I think, is institutions. South Korea, having developed a free market system and accountable mode of governance, is able to check the power of it’s political and economic elites. If the president of North Korea decides he wants to abuse his power, the people have no recourse. If the president of South Korea decides to abuse their power, they end up in prison. (See the 7 korean heads of state that ended up in jail, quite impressive for a 40 year period. We had 4 years with Trump and only managed a mugshot.)
Memes aside, strong institutions typically have a variety of methods to align their leaders with the needs of the people and stave off corruption. Understanding that those in power tend to abuse said power unless restricted in some way, most democracies have institutions in place to ensure no one person dominates the system. Typically, the most straightforward answer is elections. In democracies, a leader can be corrupt to the extent the public tolerates it. Be too corrupt and you end up losing elections, or serving prison time (cough cough South Korea). There is also much greater public oversight and freedom of information, which creates a drive towards transparency. If the CCP is corrupt there’s no real way to hold them accountable. The secret police will arrive to have a word with you. Xi Jinping can do as he likes and nobody has a say about it. If the American president tried to do the same we would see the news awash with headlines of scandal. The other political party would cackle, and voters would scramble to find a more reliable candidate.
These mechanisms of alignment, as I’d call them, are far from perfect. Even in liberal democracies like the US it’s common knowledge most congressmen are multi millionaires, and for individuals with modest state salaries they sure have an uncanny knack for obtaining huge sums of wealth. (Perhaps Pelosi should give day trading a try, she sure seems to have talent) However, the fact remains that corruption tends to be discouraged as a general rule, and instances of corruption tend to be far less overt and damaging. We don’t see, for instance, the head of state winning a state run lottery. Or Congress passing themselves a 10 billion dollar pay raise. Backroom deals, cushy corporate jobs, insider trader and the like are acceptable. Outright raising land rents like a feudal lord to fund direct salary increases is not. Our leaders are, in the end, constrained by law. This allows regular citizens to do the work of making money… mostly. Corruption will hurt, but it isn’t crippling as there’s at least some accountability.
Case in point, many of the worst offenders are simply convicted of federal corruption charges. Our last president was impeached twice and is currently on trial for, among other things, fraud and corruption. Imperfect as they are, these are still methods to keep the guy in charge accountable. This does not exist in countries with weak institutions. Many times, in fact, the institutions end up bolstering corruption.
Let’s return to the example of Mexico. Recall how Carlos Slim was able to build a tele-networking monopoly to plunder the wealth of the people. You might wonder how in the world he managed this, surely the law wouldn’t stand for such overtly criminal business practices? The issue is, not too surprisingly, that the law is on Slim’s side. Recurso de Amparo, originally a law designed to protect the constitutional rights of citizens, has been exploited by Slim’s lawyers to shield his business practices. See how Slim was able to dodge a record fine. This was the very same law Slim attempted to fall back on when he attempted his monopolistic practices in the US, only it didn’t exist. American law, in it’s infinite magnanimity to the rich and powerful, still managed to slap Carlos Slim with a fines for his comparatively much more minor transgressions. The tactics which Slim used to succeed in Mexico failed utterly in the US. Mostly if not completely due to the nature of the US’ institutions. For all it’s faults, the modern US is no longer in the gilded age. Overt monopolies are no longer allowed.
It’s not just that weak institutions favor the businesses of oligarchs either. Weak institutions actively give businesses to oligarchs. Consider post Soviet Russia, which saw previously state owned companies auctioned off to political cronies at bargain prices. Or post Soviet Hungary, which likewise handed billions to unscrupulous businessmen willing to play political games of power. Slim himself was an example of such a politically created oligarch in Mexico, having acquired his telecommunications company with shady backroom deals. Lacking any oversight, corrupt government officials stole like there was no tomorrow, happily selling the public good for private benefit. These are the structures who create men like Carlos Slim, Sandor Csyani, and Sergei Shoigu. All of whom received their wealth, not through aptitude, service, or innovation, but rather, political machinations.
How is the normal businessman meant to succeed, in an environment like this? The question is rhetorical. Of course they don’t. You do not compete with Carlos Slim’s megacorporation in Mexico. You do not attempt to create rival banks against Sandor Csyani in Hungary. You don’t invest in quality as a Russian procurement company, you invest in another mansion for Sergei Shoigu. In all examples listed we see the same problem. People will be corrupt if there is no institutional safeguards, much like they would commit crimes if there was no police force. Being corrupt, they naturally move to stifle free market competition and forcibly seize the assets of anyone who is successful but lacks a powerful political patron. There is no point in trying. There is no point in innovating. There is no point in trying to create jobs or lift people out of poverty. Now, playing politics and kissing the Supreme leader’s arse? That’s where the money is.
Having said all this, we find ourselves full circle back where we started, once again at institutions. As I illustrate, much of the problem with corruption (and yes, this applies to war also) is essentially an alignment issue between the ruler and ruled. The ruler(s) doesn’t need to care about their subjects, because they’re the damn ruler, they can do whatever they like. Corruption can leave schools underfunded and famine relief nonexistent. Wars can devastate families and tear lives to pieces. But the almighty Shepard cares nothing for the suffering of his sheep. Why should he? There is, after all, nothing stopping him.
I hope this was a coherent narrative to your satisfaction. Feel free to ask for elaboration or provide critiques. I’ll apologize in advance for the poor quality, but it’s late on a school night so I’ll have to get going. Hope you enjoyed, and look forward to your response!
I waited Friday so that you won’t sleep at school because of me, but yes I enjoyed both style and freshness of ideas!
Look, I think you’re a young & promising opinion writer, but if you stay on LW I would expect you’ll get beaten by the cool kids (for lack of systematic engagement with both spirit and logical details of the answers you get). What about finding some place more about social visions and less about pure logic? Send me where and I’ll join for more about the strengths and some pitfalls maybe.
Many thanks for the kind words, I appreciate it.
You’re probably right. I mainly started on lesswrong because this is a community I’m familiar with, and a place I can expect to understand basic norms. (I’ve read the sequences and have some understanding of rationalist discourse). I’m unsure how I’d fare in other communities, but then, I haven’t looked either. Are you familiar with any? I don’t know myself.
Nope, but one of my son suggests discord.
Likely a good suggestion. I’m in a few communities myself. But then, I’m unsure if you’re familiar with how discord works. Discord is primarily a messaging app with public server features tacked on. Not the sort of community for posts like this. Are you aware of any particular communities within discord I could join? The general platform has many communities, much like reddit, but I’m not aware of any similar to lesswrong.
Nope, my social media presence is very very low. But I’m open to suggestion since I realized there’s a lot of toxic characters with high status here. Did you try EA forums? Is it better?
Hm… pretty similar here. I also don’t have much of a media presence. I haven’t tried EA forums yet, mainly because I consider myself intellectually more aligned with LW, but in any case I’m open to looking. This is looking to be a more personal conversation now. Would you like to continue in direct messages? Open to hearing your suggestions, I’m just as clueless right now.
Are the quotes pulled from the Poor Economics book?
Yes, they are. In the main post my only quote blocks are direct copy/pastes from the web version of the book.
Next time, please make the point of the article easier to find. After pressing PageDown button 7 time, I finally find a link to a YouTube video which basically talks about one specific project that failed (although many projects probably fail for similar reasons).
Uhm, is there a name for this fallacy? To me the argument schema sounds like:
The argument doesn’t get much better even if you find the second or the third stupid book.
It gets better if you choose a few books at random, and make it a statistical statement, such as “70% of randomly selected books are stupid”. But that already suggests a different conclusion: instead of giving up on books completely, we need a mechanism to filter the good ones from the bad one. Some kind of evaluation and recommendation system.
Which, by coincidence, already exists for charities. Not sure if you heard about it. (More info here.)
Sorry? What point are you referring to? In my thoughts at least, this article was about the root causes of poverty and why aid fails to address it adequately. If there was such a thing as a main point (and in writing this I had to summarize many) I would describe this as it. Thus, the opening paragraphs outline my general argument. I put forward the claim I am attempting to refute:
as well as the methods I am using for the refutation.
I’m a little confused. What was the main point of the article in your view? My intention was to make it clear, but maybe I was unsuccessful. The argument is as follows: aid to the poor through charitable (as well as many other means), fails in general because it does not sufficiently address the systemic causes of poverty. Thus the analogy of a patient using painkillers instead of going to the hospital for treatment.
The main reason I decided against including many examples of aid failing (aside from length) was because it did not serve the ‘main point’ of the argument. In my view, this article was primarily an exercise in deductive reasoning. I begin with the principles behind the causes of poverty, and then illustrate how people have attempted (and failed) to solve them through charitable. This was done through a few examples, not just Millenium villages, although the others are mentioned in far less length. My primary interest in this article was setting forward the principles themselves, rather than providing a volume of examples. I do not see why I should compare different examples of aid (all of which being unsuccessful under my framework) when my goal isn’t to compare their effects. That would be missing the forest for the trees.
Allow me to adopt your analogy to explain where I thought I was going with my argument. Many people in poorer areas are illiterate. Without first raising literacy no amount of books of high quality will improve them intellectually. I then proceed to find an example of people attempting to raise literacy, but failing, for various reasons (turns out the readers didn’t like a particular book). Notice I am not saying any particular book is stupid. I am saying that donating books to illiterate readers is unlikely to accomplish anything unless we also attempt to make them literate. (Note that I never said anything on giving up books! I made a donation myself and encouraged others to do the same!)
I am, of course, open to changing my mind. But I would require evidence of either A. aid/methods of aid proven to be effective in reducing long term poverty at scale with reasonable cost or B. basic logical flaws with my premise of what causes and sustains poverty. If you can cut an excerpt for me from a source, I would be happy to view it, but unfortunately I do not have time to read through a full book or sequence.
Do you still find my reasoning fallacious? If so, feel free to point out how.