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Discover Your Inner Economist India
I've been to India twice and both times I have been received with the utmost hospitality and enthusiasm. I loved the food, the music, the diversity, and the more-than-occasional chaos. Most of all I loved how the people engaged me so directly, and how every moment was so full of human drama and stories.
Since India has given me so much, I wish to make a merit-based gift to India in return.
My new book Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist offers a chapter on how to help other people. In the book I suggest several principles:
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.
I would like to live by these principles, and I am asking you to help me.
If you want to try a new form of charity, keep reading here, because I am about to send money to people in India, to people who are not expecting it and who will not be asked to do much of anything to get it.
You are about to tell me the names of people I should send money to. I will then send money.
Simple.
Here is the plan in more detail:
1. The recipient must live in India and receive the money in India. I just need enough information to send the money via Western Union.
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. I am keen to send much of the money to poor people, either directly or indirectly, but of course India is not just about poor people. 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.
6. Recipients of the money will execute their plans for helping India.
7. 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. (If the sale of foreign rights is a multi-country deal, I'll apportion it by relative sizes of book markets for this kind of title.)
I've thought long and hard about how to keep the funds away from scammers, and here is the best I can do: All responders are eligible, but the selection algorithm will favor early entrants. In other words, MR readers (and their friends) with connections to India have the best chance to read this post early, respond, and thus receive a transfer.
So I would like to ask you a favor, especially if you are Indian or have connections with India. Please make your nomination as promptly as you possibly can. (It is also OK to forward this link to people you trust for their nominations; please do.) This will ensure worthy entries toward the beginning of the email directory. I believe that MR readers and their friends will put the money to good use and I am asking you to help me in this manner.
One final request. I am asking my readers -- yes that's you -- to also make merit-based donations to India.
You may have noticed that Alex and I have stopped asking for MR donations; we are happy to be prospering. Would you instead consider sending some money to India? I already have had several people pledge money off-line. Remember our MR motto?: "Small steps toward a much better world."
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.
No, you do not get a tax deduction but your money goes right to the source, with zero overhead and waste. Have you ever believed that remittances do more good than bureaucratic foreign aid? I know I have. I believe we should be experimenting more with zero-overhead giving (see pp.192-6 in my book), and I am asking you to be in on the ground floor of that experiment.
I know that MR has some very wealthy and very generous readers who even make seven-figure donations. If you are one of these people, would you consider a larger gift of $10,000 or more? You can distribute the money to as many or as few names as you like. Just let me know your plan, and how many email addresses I should forward, and the rest is up to you. I will keep your identity anonymous unless otherwise instructed. (If you are a potential recipient of money, but want money only from me and don't want your email forwarded to others, just let me know in the email itself.)
Addendum: In the comments section, please offer your ideas to others for how to use or give away the money. You can do this whether or not you have a connection to India.
Posted by Tyler Cowen on August 12, 2007 at 06:31 PM in Philosophy | Permalink
Comments
Why India and not, say, Nigeria? :-)
Posted by: Seun Osewa at Aug 12, 2007 6:38:09 PM
I'm married to an Indian citizen, and will be sending this link out to him and his family in the hopes that they know someone who could use the money - there are certainly plenty of plenty of people in India who this could help. Thank you Dr. Cowen!
For readers interested in other ways to help those in need, I highly reccommend CRY America (https://america.cry.org/donation/donor1parallel.asp) for easy donations that go right towards Indian children's education and health care. Although I don't think it operates in India, kiva.org has a great model of microfinance.
Posted by: Jaclyn at Aug 12, 2007 7:05:16 PM
Perhaps the marginal good the money would do a random Indian is more than a Nigerian? I think this blog has covered the ineffectiveness of aid in Africa before for certain reasons particular to it (corrupt governments, demographic increases matching money/food injections), but I can't say for sure. Perhaps Tyler just really enjoyed his time in India but hasn't gone to Nigeria yet?
Posted by: TGGP at Aug 12, 2007 7:11:48 PM
I'd be keen to hear ideas for an incentive-compatible plan to send money to Nigeria and get it into the right hands. Please email me or leave your ideas in the comments here.
Posted by: Tyler Cowen at Aug 12, 2007 7:22:36 PM
Why Western Union? Those fees will eat a decent portion of your donation and feed the corporate monster. Even snail-mailing cash or cheques would be better.
Posted by: ST at Aug 12, 2007 8:32:48 PM
It's probably cheap enough to start up a tiny non profit so donors can deduct.
Posted by: michael vassar at Aug 12, 2007 9:27:27 PM
Mailing checks or cash to India is not a good idea. Mail in India is not as secure as it is in the US.
Posted by: samson at Aug 12, 2007 9:40:39 PM
Funny how I read your bit on google reader. I clicked over to leave a comment and the first comment was exactly what I wanted to say. Could you do this for Nigeria? You also ought to visit Nigeria a few time you would surely get inspiration to write a few more books.Our country is one giant demonstration of economic fallacies.
Thanks
Loyal reader.
Posted by: omodudu at Aug 12, 2007 10:14:14 PM
Duly forwarded to a friend who is currently working in India.
Posted by: eriks at Aug 12, 2007 10:15:37 PM
this is brilliant. after reading one of tyler's interviews, I gave only a 15% tip to a waiter when I typically give 20%.
I should continue to take his advice and give the money I save to people who actually need the money.
Posted by: thehova at Aug 12, 2007 10:32:25 PM
Well I have had similar experiences in Nicaragua (great music, good food, generally happy people with life-affirming attitudes). Actually Nicaragua is one of the "happier" (according to qualitative surveys) countries versus per capita income (Haiti I believe is only lower in our hemisphere on per capita income). Nicaragua seems like a young,energetic country with a relatively small population (around 5-6 million) with great potential (tourism, coffee, rum, tobacco, geothermal energy, possible petroleum) if they could just get past some current "inefficiencies".
So I am willing to send some money to India if you will send some to Nicaragua. Reciprocity. That's a type of incentive isn't it? It would be neat to start a good, fun, somewhat viral, world-wide giving program. Is there a way to apply this money so it has a multiplier effect?
Posted by: Pitt at Aug 12, 2007 10:56:17 PM
Pitt: if you send some to India, and Tyler some to Nicaragua... Is it not more simple to just you send some to Nicaragua? Unless Tyler will send MORE to Nicaragua than you to India.
Posted by: Linkt at Aug 12, 2007 11:49:29 PM
Re Tyler Cowen's Addendum, I support (i.e., make monthly contributions to) two charities - Medicine Sans Frontiere, and Opportunity International. MSF is a specialist in emergency aid (i.e., in fighting fires), while Opportunity International is a specialist in microfinancing (i.e., here's a fishing net and here's how you use it). MSF volunteers include many medical staff, and so I'm leveraging off human capital.
I'm generally comfortable that MSF is an accountable, efficient and effective charity. I imagine it would not retain smart doctors and nurses as volunteers if it were not effective and efficient. Particularly impressive was MSF's willingnes to announce that it would cease collecting funds in relation to the 2005 Tsunami tragedy when it felt it had more funds that it could handle. MSF has also started podcasting, which is another form of accountability.
I'm not as comfortable with Opportunity International. I can't see its financial statements or annual reports, and I did not get a response to an email I sent recently, inquiring if it had audited financial statements. However, Opportunity International (but not MSF) is on my firm's Workplace Giving program, which means that my firm matches donations to this charity, dollar for dollar. I'm relying on my firm's Workplace Giving program to vouch for the effectiveness of this charity.
I'd be grateful for any comments/suggestions on whether I can do better (than as outlined above) for the ongoing monthly financial contributions I currently make. I assume we need to both fight fires (where the short term need is greatest) and invest in human capital (to make a long term contribution).
I'm also interested in people's thoughts on what a charity could and should do in relation to accountability to its financial donors. I assume it is not enough to just provide audited financial statements. Unlike "for profit" organisations, it may not be clear what performance measures apply to charities and what their mission is. Perhaps a mission statement plus a set of performance measures (together with annual reporting against those performance measures) is required.
I also wonder if charities need a regulatory framework (analogous to that applying to publicly listed companies) to help discharge accountability to financial contributors. What scope is there for charities to develop such a regulatory framework themselves, or is it appropriate for the government of each country to establish a regulator (e.g. the UK Charity Commission) to foster its citizens's confidence in the charity sector? I feel that there is currently some kind of "market failure" in the charity sector.
Posted by: KY Choong at Aug 13, 2007 12:06:20 AM
I congratulate you on your generous idea, although it has a ring of patronization about it! I feel, however, that the grave threat that India is facing today is the proliferation of neo-liberals in policy circles (often trained in the US). You can show your appreciation for India by merely turning down applications to your department by students from India; this would be a good first step to save them from being contaminated by the dangers of neo-liberal ideology. Only kidding!
Posted by: Joe at Aug 13, 2007 12:46:00 AM
Here is a suggestion in case you would like to invest in education/health. This is a small effort run by a great lady in Indian capital. Please take a look at the website http://www.projectwhy.org/ and her blog at http://projectwhy.blogspot.com/
Thanks!
Posted by: Vivek at Aug 13, 2007 1:13:59 AM
TC great idea in form. Of course lots of opportunties for scams. Of cousse I see the tie in w book and India in the arrangement you cite--but why not just make it global? Couple of ideas, make a publicly available proposal such as is the case on the personal lending web site "Prosper". Better yet, a website where proposals for the grant from rich generous americans. heck open it up to poor folk in Baltimore as well...Really, a "Prosper" type medium on the web where people put up their proposal and then we can choose to fund the one or several that appeal to our inner economist.
Posted by: Robert C at Aug 13, 2007 1:23:04 AM
Why not make your donation conditional on others doing the same? Don't merely urge loyal MR readers to donate money; give them an incentive to do more good than they would otherwise.
Posted by: Pablo Stafforini at Aug 13, 2007 1:58:08 AM
I sponsor a kid at an orphanage in Bangalore (through my mom, who goes to India a lot; will get info to you soon). The orphanage takes quite good care of the kids, and manages to give them enough education/training to make them self sufficient. I suggest giving to small, local organizations of this type, that make big differences in individual lives. I'd imagine that your dollar goes further with them, and the psychic rewards are greater.
Posted by: Omkar at Aug 13, 2007 4:06:18 AM
hi tyler,
nice job.
I would like to thank you doing this, I'm sure this idea of your will surely lead to introspection among a billion Indians who are spread across the globe.
Like they say "God helps those who help themselves"
One again I hope you act triggers a domino effect around the world and bring smiles all over.
cheers
satish
bombay,india
Posted by: satish at Aug 13, 2007 6:06:24 AM
Kiva: peer to peer microfinance.
Posted by: Katie at Aug 13, 2007 6:39:26 AM
I know that MR has some very wealthy and very generous readers who even make seven-figure donations.
Well, no wonder you aren't asking for contributions any more -- that would just be greedy.
Posted by: Noumenon at Aug 13, 2007 7:30:34 AM
Wouldn't contact with recipients be another way of keeping track of a charity? Admittedly, this can go wrong, but so can any method of remote monitoring, and the recipiants should have something useful to say about whether they're actually being helped.
Posted by: Nancy Lebovitz at Aug 13, 2007 9:02:24 AM
Prof.Cowen,
There are many very poor but bright students pursuing their studies in economics in Govt.Colleges (where they get fee concession)in India who can't dream of buying a good book in economics because it is beyond their meagre budgets(for example,the graduate students' studylist include costly books such as "Modern Macroeconomics"by Brian Snowdown and Howard Vane published by Edward Elgar priced at too costly a level in terms of Indian Rupees).Instead of money, you can send classic books in economics (if you have extra copies).That will greatly benefit the graduate students who come from poor families.
Posted by: GVV at Aug 13, 2007 10:26:56 AM
I haven't actually made it to pp. 192-196 of your book yet, but this post definitely caught my eye. We left the World Bank and founded GlobalGiving because lower-overhead giving (we are at 10%, haven't hit zero yet) to bottom-up initiatives from many many sources deserved to be tested, but some overhead is required for tax-deductibility is required. I'm fascinated, would love to hear as much as possible about what you find out, and perhaps we can help you out in some way in this or further iterations on logistical matters? Would love to be able to incorporate your results in what we do.
Posted by: Mari Kuraishi at Aug 13, 2007 11:02:21 AM
Kiva.org was mentioned above. This is a microfinance scheme where you can invest money (not donate but also not receive intrest) in local businesses around the world. I personally have invested in a bus service and beauty parlor in Hondurous, a video rental store in Azerbajani, and a taro farm in Samoa. You get the money back over time as the loans are repaid and you can then reinvest or donate it to kiva.org to help them.
This is very low overhead and I believe the money goes directly to people who can and will use it to improve their lives and the local economy.
It seems that sending money through Western Union to semi-random individuals is a kinda expensive but interesting econo-performance art piece with an iffy positive outcome potential.
Posted by: Steve at Aug 13, 2007 12:03:58 PM
