Credible Charities

ML told me about a local charity helping a village in the Dominican Republic called Esperanza. I was impressed.

But the economist came out in me and I replied to ML with the question, "how do we decide?" I meant to question the whole nature of charity. There are millions of cases worthy of charity, but I (we) cannot help everyone.

More importantly, how do (I) we decide what to do with these charitable cases? Something is (usually) better than nothing, but some methods are better than others. These are the most traditional and intelligent economic questions that I have come up with in a year. It almost looks like I think there is an optimal answer that I can empirically determine.

But the questions irked ML. She called me jaded. I think the question "does a rich white kid in the Dominican Republic 'sacrificing' send the right message to Dominican children?" made her angry.

What I was trying to say is that I doubt if the white kid's self-made father spent time in developing countries. Some white kids think they are doing penance for the evils of capitalism, and I do not think this attitude is appropriate to truly help the poor. Of course there are others who are more confident in the philosophical foundations of capitalism. I am not saying either of these volunteers are bad people, but there will be some adverse selection. Development takes ideological change. Some people do not have the right ideologies to help make this change.

Someone must ask these questions. The lawyer handing out food in Africa is sacrificing income that he could give to charity. Myself going to college is sacrificing going to Africa. The opportunity costs of charity must be considered. (ML was offended at the term sacrificing. I should have used opportunity costs.)

(A sidenote to ML: The indifference bothers me the most.)