Re: Gauging Generosity

From: Technotranscendence (neptune@superlink.net)
Date: Mon Aug 11 2003 - 18:32:03 MDT

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    On Monday, August 11, 2003 9:22 AM Ron h. Dehede011@aol.com wrote:
    >> For instance, the aid from the US to Iraq
    >> is being gobbled up by US contractors.
    >> This is not unique to the Iraq War. The
    >> same thing happened in the Balkans. I
    >> bet it happens elsewhere too and with
    >> other donor nations.)
    >
    > Dan,
    > I hadn't thought about that. What you
    > are saying is that if the US spends money
    > to build a road in Iraq and uses a US
    > contractor to get it built then we didn't give
    > the Iraqis the road. And if we let Bethel (?)
    > or someone put out oil well fires because
    > they are American the fires aren't out they
    > are still burning. Furthermore if an American
    > company is paid to restore power in
    > Baghdad when they get more power in
    > Baghdad than when Sadaam was in power
    > then because it is an American company
    > they haven't done anything.

    Not at all. What I am saying is not that nothing gets done but that a
    lot of foreign aid is internal wealth redistribution. I should NOT have
    used the Iraq War as an example, since it's too politically charged, so
    let me just used a schematic example. Country X allegedly gives aid to
    country Y. The aid is for a specific project P. Well connected
    interests C inside X lobbied for this specific project and the aid
    really amounts to the taxpayers of X pay C to do P. Yes, Y gets P, but
    the real pressure to do P did not come the citizens of X per se but from
    special interests in X that saw a way to get the aid money transferred
    to them.

    This kind of thing goes on, I bet, a good percentage of the time when it
    comes to foreign aid -- and I'm not focusing on the current Bush
    Administration or the US or wartime. There seems to be a good public
    choice argument for why this stuff would go on -- the incentive for C (a
    tiny minority) to lobby for P is much higher than the incentive for the
    rest of X (the ones who, in the end, pay for P) to monitor it or fight
    against it. After all, P might amount to thousands or more in profit
    for each C while it costs each taxpayer only pennies.

    There's also a knowledge problem here too. Since P is going on in a
    foreign land, its even more difficult for those taxpayers to monitor.
    The same difficulty applies to politicians who sign on to P in the
    motherland. (For all we know, P might not really benefit people in Y or
    its benefits could be uneven, destabilizing, or even counterproductive.
    An example might be food donations that bankrupt many marginal farmers
    in Y.)

    Later!

    Dan
    http://uweb.superlink.net/neptune/



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