Feed a Man a Blowfish

I alluded in my last post to another disagreement Tarun and I had about foreign aid. I don't know exactly what Tarun thinks should be done, but I know he doesn't like my idea of favoring democracies or my idea of concentrating additional aid on one country or region.

Tarun's problem with the "big push" idea, I imagine, is that it screws over the people who aren't selected as the recipients. Now, strictly speaking that's not true: I don't propose cutting aid to anyone. Tarun would respond, though, that whoever doesn't get the "big push" money will get a reduced fraction of all aid money. Another way of putting it is that if I call for an increase in aid money of x dollars, those x dollars need not be concentrated on a few recipients. If they are spread out evenly, it will be somehow better than concentrating them, and to concentrate them is to rob them from everyone else.

Now, maybe I'm implicitly taking sides in the big push/balanced growth debate, a debate that I don't really know anything about (I might be mis-using the term, in fact). My intuition, though, is that certain kinds of aid are complementary. So for instance, education is great, and nutrition is great, but they are especially helpful together. In fact, early malnutrition might permantly damage children's ability to learn, and hungry students are not typically good students. So if we had a choice of giving education to one country and nutrition to another, or both to one country, I would probably favor the latter approach.

Now in real life that's not exactly the choice we face. Still, I can't help feeling that in most developing countries there are strong complementarities among development projects. Good roads, which are valuable in themselves, also reduce the cost of getting aid to its destination. Good education, valuable in itself, is especially valuable if graduates are able to get good jobs.

Tarun would argue, I imagine, that development projects are not strongly complementary, if at all. If he acknowledged that complementarities exist, he would then argue that it doesn't matter, because the marginal utility of development is strongly concave. In other words, the first unit of development is worth much more than the tenth, so we should prefer lots of countries getting a little funding to a few countries getting a lot of funding, even if those few countries would be lifted permanently from poverty.

I actually suspect that Tarun is motivated by a kind of Rawlsian maxi-min concept: the overriding concern is the well-being of the worst off. I think Rawls is wrong, because I would gladly trade away a few pennies for the worst-off person in exchange for lifting billions of other people out of poverty. To be fair, Tarun is probably not as extreme as Rawls, and in fact I would agree that the concavity of the utility function is an important consideration. Still, I think that fundamentally some countries are on a path to greater prosperity, freedom, and dignity. Other countries are not. We can ameliorate suffering with diffuse aid, but to shift countries onto the right path might take more of a push. If this "big push" succeeds, a poor country or region will never again require foreign aid in the ordinary course. It may even become a donor. It is in this way that I think large-scale poverty can be most quickly eliminated from the earth.

[update: fixed typo]