This is a question post.
The usual argument against foreign aid to Africa is that randomly giving tons of free goods (such as food) ruins local producers; and when at some later moment the charity goes out of fashion (or decides to target a different part of Africa), the local situation becomes even worse than before, because the local producers have gone out of business. In addition, it hurts the local people psychologically to know that any local business, no matter how successful it could otherwise have been, can at any moment be destroyed by a well-meaning foreign charity.
Recently [LW · GW]I heard the same argument made about anti-malaria nets recommended by GiveWell. If I understand it correctly, the donated nets put local net producers out of business (increasing local poverty and dependence on foreign aid), and the estimated number of lives saved is misleading (because in the alternative scenario, the same people could have been saved by locally produced nets).
I have one specific question, and one more general concern.
The specific question... well, I know nothing about the anti-malaria industry in Africa. It exists, I assume. But quantitatively -- how many nets it produces, how many nets it stops producing because it is pushed out of the market by GiveWell, whether the nets are of comparable quality, what is the best estimate of the scenario with no foreign aid compared to the scenario with foreign aid -- I have no idea. I supposed some of this was already discussed by some effective altruists, so I would love to hear the summary.
The meta concern is the following: I find the argument of foreign goods disrupting local market plausible. But seems to me that the problem is with high variance (one year a ton of goods, the very next year nothing), not with foreign goods per se. Because, anytime a country participates in foreign trade, the local producers of the stuff that is being imported, are pushed out of business. But we have the law of comparative advantages saying that in global, this is a good thing, for both countries. (Or to put it differently, trade sanctions are typically used as a punishment, not as a reward.) I worry that at some moment, the "stop destroying African economy by your disruptive aid" argument becomes effectively "stop trading with Africa", and I am not sure where exactly to draw that line.
answer by Lanrian · 2019-01-06T00:49:12.541Z · score: 26 (9 votes)
While not comprehensively covered, GiveWell mentions this in a few places. The second point here links to a report with this section discussing whether people are willing to pay for nets, as well as a link to this old blog post which briefly makes the argument that people won't buy their own nets, since previous hand-outs (from other charities) have resulted in a lack of local producers and an expectation of free nets. They also mention that nets have some positive externalities, and mostly benefits children, who aren't the ones paying, which gives some reason to subsidize them.
answer by paulfchristiano · 2019-01-05T20:44:26.531Z · score: 16 (5 votes)
I don't know anything about the particular case of net production. I think that the general argument against aid is similar to the typical argument for protectionism, which I think is something like:
- Local production creates local infrastructure, know-how, human capital, etc.
- Over the long run this benefits the region much more than it benefits the producers or consumers themselves.
- So the state has reason to subsidize local production / tax imports.
If you have usual econ 101 models (including rational expectations), then variability itself doesn't cause any trouble, the only problem is from these positive externalities. These externalities could be pretty big, it's plausible to me that they are much larger than the direct benefits to producers and consumers.
comment by Raemon
· score: 4 (2 votes) · LW
Subquestions I'd probably want to answer if I were trying to figure this out from scratch (not sure how much Givewell has covered already, haven't read much of Lanrian's links), include:
- A. What countries have significant malaria problems?
- B. What countries have had significant anti-malaria aid?
- In countries listed in A, what locally-founded organizations (for-profit, non-profit, or government-sponsored) have existed to address malaria?
- Can we get data on how those companies/orgs have grown or shrunk in spending as foreign aid has grown.
One reason this might not be a correct track is that general ecosystem of aid may have already distorted things by the time you got to malaria programs. So it might also be useful to look into local orgs treating similar health issues that also received foreign aid in the past century.
comment by Raemon
· score: 2 (1 votes) · LW
I assume (or, hope?) that GiveDirectly has investigated this a bit. Or at least that it should be possible to compare, say, death rates of people being given GiveDirectly cash transfers vs receiving malaria nets.
comment by cumbong420
· score: 1 (1 votes) · LW
I'm inclined to believe it's a rational reason. In one of the links, it's mentioned that the same effect found with the nets being sold at market price was seen when trying a similar technique with anti-worm medication. Worms are a much more tangible and wrenching threat than mosquitoes, so if people were neglecting to buy these nets out of an irrational understanding of their effectiveness, we might not see the same results with a product that's much easier to see work. Since we do, it looks plausible to me that people just can't afford these things at market price.