Over at Marginal Revolution Tyler is putting his money where his mouth is. He has just published a book where he makes an argument for how to best help people. Now he wants to follow through and give money to people in India. They don’t have to be engaged in charitable work at all, they just have to do something with it that helps India, and they get the money no strings attached:
2. Send your email to DiscoverYourInnerEconomist@gmail.com. Only emails to this address will be considered. The email must contain the legal name (as documented on ID papers) of a person who will receive the money, his or her state in India, and the city of his or her local Western Union branch. You can be the person yourself, or you can send the information on behalf of someone you know.
3. With your email, send a one sentence proposal of how the money will help India… Proposals of all kinds are eligible, including using the funds to help expand your steel factory, and yes using the money to open a new call center. But you must not give the money to beggars.
4. Only one email per person is allowed.
5. By the end of the week I will send $1000 to India, via Western Union. One person will receive $500, the other recipients will get $100 a piece; I will email the wire numbers to each approved person… If/when Discover Your Inner Economist is published in India, further names will receive transfers. I will send at least the net, post-tax value of my Indian advance. [Link]
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p> Why is he doing this? Well Tyler believes that the following three maxims apply:
1. Cash is often the best form of aid.
2. Give to those who are not expecting it, and,
3. Don’t require the recipients to do anything costly to get the money. [Link]
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p>He’s also very much against waste, and wants to engage in zero overhead giving. Lastly, he’s encouraging others to do something similar using the names that he has collected, and tell him about it:
One final request. I am asking my readers — yes that’s you — to also make merit-based donations to India.
Making your gift is simple. Just email me at IndiaMerit@gmail.com and ask for names and emails of recipients. You also can specify whether you want your money to go to the poor or to an Indian business. You then send the money yourself and email the recipient the Western Union number of your transfer. You can even send the money on-line. [Link]
I’m not sure that I agree with Tyler’s arguments; I haven’t read his book, but the evidence I have seen argues that monitoring is always a good thing. However, as an empiricist I am always happy to help somebody publicize a worthy experiment. Sometimes the best way to ascertain the cost:benefit tradeoffs involved in a situation is simply to try things out and see what works. Theory is a pretty weak guide to the world.
As a brown guy, the best thing about this post is that I get to read another brown guy write “I’m an empiricist”. These days, it sometimes seems being authentically brown is tied to being some religion or another (muslim, sihk). I’d like to see more media imagery of folks that look like us proclaiming themselves empiricists, skeptics, etc. It’s not just for white guys.
Always glad to please, but hopefully you found Tyler’s scheme enlightening or at the very least, entertaining.
ennis,
you must realize that a part of many a brown worker bees’ day is involved with at least scanning MR.
I do like the concept of cash directed to the needy party, sans benign handlers/facilitators with good intentions.
After the Tsunami, all donations from our family went by way of SL Tam-Fam Union (Not even Western Union!), so as to avoid the clutches of the LTTE or whatever corrupt functionary in the humanitarian aid chain. I’m still waiting to see whether our money was more efficiently translated into material gains for the affected parties in the north, but I am at least sure that it is not purchasing war material for those who have forsaken the non-war material market.
Awesome–simply awesome!!! I have asked my parents for some names, and I’m in for $1,000 too!
I’d actually like to learn more. I checked out his web site, but didn’t get a strong sense of the program. How are recipients identified? What are the metrics for “successful” donations? I’m just curious 🙂
The recipients are identified purely via the one line description. And without any post-hoc monitoring, I don’t know if there are any metrics for success. Going to zero-overhead means you don’t know whether it succeeds or fails, but it also means that people don’t waste their time on reportage. Given that Tyler was one of Schelling’s students, I’m pretty surprised that he has removed both monitoring and sanctions … his argument is that “type” is sufficient. You can ask him yourself though, he’s pretty responsive.
Worth a try, I guess; it’s way better than writing a tax-deductible check to a museum which buys over-inflated artwork that does nothing but spoil the glass of wine you are drinking while staring at paint!
Great post Ennis. How do you come across this stuff?
I’ve been a professional grant reporter for the last five years. I helped report on grants from Oxfam and other major donors to a grassroots group called SWATI in rural Gujarat after the earthquake there. I’ve reported on grants to the International Association for Feminist Economics and to Rice University. I think it’s misguided that to think of all overhead as wasted money. Without effective administration, you can’t be sure aid is effective, you can’t learn from success and mistakes, and you can’t check fraud and corruption. There’s a time for direct aid and I admire Tyler putting his mouth where his money is. But I’ve been on the ground and in the field, and I can tell you that change happens because of good institutions and that requires administrative cost.
Thanks! I read MR (although only intermittently), and Tyler is a blog-friend, i.e. we’ve emailed on topics, and we know people in common, but we have not met yet.
No offense, but I find the folks who are getting all excited about this theoretical experiment a bit misguided.
No doubt just giving everyone poor a few bucks helps, but does it get the daughter in school? Does it get invested in the second cow vs. gambled away? Will it help the village mount a protest against the smashed up road and broken down water supply at the zilla headquarters?
There are very many excellent NGOs, run by local people, almost in every neighborhood in India. A small effort to reach out to the individuals who have spent years getting at the big problems would pay off in a much more long-term way.
Here are just a few links:
http://www.outlookindia.com/mad.asp?fodname=20070730&fname=Making&sid=1
http://giveindia.rediff.com/
Theoretical experiment? By putting down the cash, he is taking a hypothesis to the field. Nothing wrong with that.
As to whether it gets the daughter to school, that might well be a project that gets picked. Protests don’t fix problems. Well directed incentives just might. Why the cynicism?
Totally agreed. I’m not arguing that sometimes nonprofits/NGOs suck up more than they dole back out in services, but I’m really wary of the idea of zero overhead, zero analysis, zero follow up.
Except he’s not following it up with any empirical analysis. Maybe I am too much of a wonk, but I personally think project evaluation is 100% necessary in this kind of action.
Yes, I share your concern that there is no oversight/feedback/course-correction. But I don’t share al beruni’s absolute dismissiveness either.
My guess is that Tyler believes that a combination of factors will make this work – picking the right projects at the outset, making small one-time grant, and generating lots of publicity will all combine to ensure its success. I don’t think its a sustainable model, however. This will just create a host of professional receivers who can game the system. If I had $500 to spare, wanted it to make a difference quickly and efficiently, this might work. If I had $500 every year, I wouldn’t use this system.
To allay all your collective your concerns, send me $1000 each, and I will tell you how I spend it, and how it has bettered my life.
And I totally swear not to fritter it away on something frivolous like sending cash to deserving poor people in developing nations, which would clearly screw up any post hoc evaluation we’d care to attempt.
You can paypal me or just send me checks, I don’t mind 🙂
I am not sure the model is scalable, but I have received many serious proposals and I will be very happy to fund them. Including one which puts a daughter through school. Some of the money will be given to NGOs as well. In that case I believe that MR readers have a better sense of the good NGOs than I do. The model doesn’t have to be scalable for it to be worth my doing it. It has gone so well I’ll even be giving more than I had promised at first. I appreciate all of your comments and interest, as well as the initial link. Most of all, the experiment might be a good way to cultivate one’s own generosity.