[JamesBarney]

How does the charity prevent the person from buying a bed net?

So you're saying that when a charity provides bed nets, it causes individuals to make the irrational and sub-optimal choice of using a bed net without purchasing it. And this happens frequently enough to significantly reduce the utility that a charity provides?

This doesn't seem very intuitive to me. I am curious if you have any evidence that you could point me to show this effect happening. I'd be especially curious how the presence of the charity causes people to act irrationally.

[pdonis]

> you're saying that when a charity provides bed nets, it causes individuals to make the irrational and sub-optimal choice of using a bed net without purchasing it.

If your choice is between buying a bed net, or taking one that is available for free, the rational and optimal choice for you, if we only consider that choice itself, is to take the free one. Isn't that obvious?

But this is a first-order effect, and I'm talking about second-order effects. Most people who are given bed nets by charities probably can't afford to buy them. What I'm thinking about is this: people who get bed nets from charities are probably used to thinking of valuable things like bed nets as being provided by charity. They aren't used to thinking of them as something that can be worked for. More generally, they think of wealth--not just bed nets but things of value generally--as something that is pre-existing in the world, and it's just a matter of who happens to have it and is willing to give it to those who don't happen to have it. They view wealth as a zero-sum game.

But in reality, wealth is something that gets created. Those bed nets didn't grow on trees. Somebody made them. Somebody created the wealth they represent. But in order to create wealth, people first have to understand that wealth can be created, and people who are used to getting things through charity aren't likely to think that way. So they won't even think of, for example, figuring out how bed nets are made, and starting up an operation to make them themselves. Then they wouldn't need charity. They wouldn't even need to buy the bed nets. (And even if they did choose to buy them, it would be because they are doing something else that creates even more wealth, so they have enough surplus to trade for the bed nets and still come out ahead.)

Now you could say that, if all that is true, it is irrational to accept charity, instead of choosing to learn how to create the wealth yourself. I sympathize with that impulse; I have it myself. But now we're using a different definition of "rational", according to which people in sub-Saharan Africa, with no education, are supposed to understand wealth creation and economics well enough to see that accepting bed nets from charity, even if it benefits them in the short term, is not optimal for them in the long term. This definition of rationality, while it seems attractive in the abstract, has the huge downside of being totally unreasonable. It's much more reasonable to accept that people's perceptions of the choices available to them are affected by their environment, what they see other people around them doing, and what choices have been available in the past. That's why providing charity to people who are capable of creating their own wealth is, in the long run, a bad idea; it affects their own perception of the options available to them, so they don't even think of wealth creation as an option.

> I'd be especially curious how the presence of the charity causes people to act irrationally.

I'm not saying it does. Accepting charity if it is available is a rational choice, if a person is only considering that choice in isolation. The problem is with second-order effects. See above.

[JamesBarney]

The idea that people in sub-Saharan Africa don't know how how to create things through work because they were given so much seems crazy to me. I was given a roof over my head, free education, food, security, and medical care by my parents and I didn't have to do anything for that. I never saw our house being built, nor food being grown, or took a class in economics(by 18 I took several later). By 18 I still understood that work is needed to create things. Someone in sub-Saharan Africa has probably helped maintain their house, been knitting their own clothes, and maybe even planting and helping farm since they were 14. Then if someone gives them a bed net they suddenly discount all of their previous experience and believe that things are spontaneously created?

It seems to me you're argument is "if you give things to sub-Saharan Africans they start to think that work doesn't leads to things being made". This would be contrary to all the evidence around them. Specifically all of the things they are making on a daily basis. And this effect is so strong it overpowers the net positive of getting a bed net. If this were true then communities given a free net would do substantially worse than communities that pay a nominal fee for bed nets. All of the evidence I've seen shows that communities given free nets do better than ones that pay a nominal fee.

This is very counter intuitive theory. And I don't think mainstream psychology or economics agrees with it. So I was wondering if there was any evidence that bed nets harms the population they are meant to support.

[0]https://en.wikipedia.org/wiki/Mosquito_net

[pdonis]

> The idea that people in sub-Saharan Africa don't know how how to create things through work because they were given so much seems crazy to me.

You're quite correct that many people (including me, and apparently you as well) are able to understand wealth creation even though they were given a lot of wealth for free. So it's not always true that giving things to people makes them unable to understand how to create wealth through work.

But your example and mine are different from the sub-Saharan Africa example in an important way: we were children. The stuff we were given was stuff we could not reasonably have earned or traded for for ourselves. A child is not (yet) able to create enough wealth to pay for all the food, or shelter, or education he needs. That's why children are raised by parents, who can create the wealth needed to provide those things, until the children grow up and are able to do it for themselves. And if the parents are smart (mine were, and it sounds like yours were too), they will gradually introduce the children to the idea that all that wealth has to be earned somehow. My parents made me take summer jobs as soon as I was old enough to do so legally. (Even before that, they made me do household chores to earn my allowance.) So children, if they're being raised properly, aren't really taught that everything is spontaneously created.

The sub-Saharan Africans certainly do a lot of things for themselves, that's true. But it seems to me that, unlike (properly raised) children, there are things they do not do for themselves, that they reasonably could. Why? More on this below.

> All of the evidence I've seen shows that communities given free nets do better than ones that pay a nominal fee.

Bear in mind, again, that I'm talking about second order effects. I have already admitted that, to first order, if the choice is between paying for bed nets and getting them for free, it's obviously rational to get them for free. The evidence you describe supports that.

But the evidence you describe does not answer a deeper question: why do any of these communities need charity at all? If they do know how to create things through work, why can't they make their own bed nets? Or make something else that they can trade for them at a net profit? Why do they need to have these things given to them?

This is the second order effect I'm talking about. These people don't seem (to me) to have any idea how to generalize their ability to do some particular things that create wealth, in order to create more wealth that would obviously benefit them. They are, it seems, able to maintain their houses, knit their clothes, and grow food; but they can't figure out how to make bed nets (or something they can trade for them), even though the benefit to them in malaria prevention is obvious and huge? The only solution is to have bed nets given to them?

This disconnect is what makes me suspect that the provision of things like bed nets by charity has affected these people's mindset. They don't seem to view wealth creation as a general thing; they seem to think that they can only create some kinds of wealth, while other kinds of wealth (like bed nets) can only be provided to them by others.

[fiter]

I have heard that a reason for a lack of wealth building is because the countries often lack basic infrastructure: peace, rule of law, roads, capital, etc.

I could hypothesize that another problem could be a lack of density combined with bad travel infrastructure.

Of course, your theory could be the major contributor. Or it could be a minor or non-contributor. Because I don't know, I understand the previous poster's request for a reference.

[pdonis]

All of the factors you cite (I think bad travel infrastructure is just a special case of bad infrastructure in general) certainly contribute. International organizations measure all kinds of things like this; here, for example, are the World Bank's governance metrics:

http://info.worldbank.org/governance/wgi/index.aspx#home

However, I have not seen research into the reasons why certain countries do badly on these metrics that hypothesizes any real cause other than lack of charity--wealthy countries just aren't doing enough to help poor countries. The possibility that charity itself might be a contributing cause is never, as far as I can tell, considered. Which just puts us right back to the original question.