Tuesday, December 26, 2006

More bang for your aid buck 

Felix Salmon hits this beautifully and succinctly:
Is there any empirical evidence that giving bed nets away is more effective than selling them? Sachs knows full well that the reason for selling bed nets is not "a short-sighted ambition to promote markets" � there's no market in bed nets. Rather, there is quite a lot of evidence that Africa's poor value things they pay for, and don't value things they get for free. As a result, bed nets which have been paid for get used more, and more effectively, than bed nets which have been given away.

Similarly, there's little evidence that Africa's governments have the infrastructure and institutions in place to effectively and equitably distribute malaria medicines which have been given to them for nothing. I worry that if the world signed on to Sachs's plan tomorrow, the net result would be $2.5 billion per year being spent on bed nets and medicines which would end up stockpiled somewhere near an international airport. A system of payments for these things creates an incentive to get them to where they are needed. Neither USAID nor anybody else wants to make money from these programmes. But before we give up on the small payments which do exist, I'd want to see some concrete evidence that doing so results in positive outcomes in practice.

Cf., bang for your aid buck.