The Power of Incentives

Did I mention that 4 out of 6 of my professors this semester are economists? Well if you've ever been in an econ class for more than 20 minutes, you've probably heard an economist talking about the power of incentives. And he/she has probably used the example of seat belts in cars. Since the government mandated the installation and use of seat belts, the rates of accidents has gone up (though the number of fatalities from automobile accidents has gone down). The idea is that because drivers know they are less likely to die in an accident, they drive more recklessly. (Unfortunately this has consequences for the pedestrian who is not made safer by the seat belts, but is made less safe by the reckless driving). In any case, I was doing some readings for class last night and came across this. Enjoy.

"If you find it hard to believe that people drive less carefully when their cars are safer, consider the proposition that people drive more carefully when their cars are more dangerous ... If the seat belts were removed from your car, wouldn't you be more cautious in driving? Carrying this observation to the extreme, Armen Alchian of the University of California at Los Angeles has suggested a way to bring about a major reduction in the accident rate: Require every car to have a spear mounted on the steering wheel, pointing directly at the driver's heart."

Foreign Aid Rant

Hmm I'm starting to see a trend with the rants. I'm really not an angry person...generally.

Last week I took a Social Work class, Social Policy. It was class 9-4 for 5 days. It was pretty intense and I'm glad it's over now (well the class hours anyway). It covered a VERY broad range of social policy topics - both international and domestic. Anyway, let's skip to the exciting part. The last day of class (which was Saturday-yech) we had group presentations about a topic of choice. The first group presented on foreign aid, and used the example of Haiti. Blah blah blah skip to the end of their presentation. A girl in the class raises her hand and asks, after the group's research, what, in their opinion is the best thing to do when you want to help. A group member jumps in and says (almost word for word) "The best thing you can do is get on a plane and go there and help." At this point my head almost burst. I was so outraged by this idiotic belief that it still makes my blood boil to think about it. Thus the rant. Unless you have a very specific skill which is in high demand, STAY PUT and DONATE. Even if you are a physician, an engineer, or another highly-trained skilled worker, you should probably only go in an acute crisis type of situation. Unless you have (or plan to build) a relationship with a specific place, stay of of what the aid-community appropriately calls aid-tourism. They have doctors and engineers and translators in these poor countries. Going in for a few weeks and then leaving won't help much. The money you spent on your plane ticket could be much better utilized by groups/people that are already on the ground.

The worst part of what she said was in response to my "I completely disagree 100%" was "I had a friend who went down to Haiti after the earthquake and she brushed people's teeth. They just needed hands to help out." Say whaaaaaat? Do people not have hands there? When I went to Haiti (for pure tourism, which they frankly need more of to pump money into their economy) everyone I saw had hands. I mean, there were definitely some new amputees post-earthquake, but really? She brushed people's teeth? That is just insulting. Do you really think people there are so stupid and incapable that they need you to go and brush their teeth?

We read Poor Economics for our class. It was a really interesting book (it was published earlier this year) and I really enjoyed it. My one complaint about it was that it tried the whole book to describe and define poor people. As if they are a different species. This student's view of emergency aid was right up the same alley.

I could go on, but my anger management coach is telling me to cool it.