Three fantastic TED talks

MIT economist Esther Duflo talks about the use of social experiments to determine what social policy is effective. This talk is from 2010, but it’s more than worth listening to. I also recommend this New Yorker piece.

Oxford philosopher Will MacAskill on effective altruism and how to judge the world’s most pressing problems. Some similar themes to Professor Duflo’s talk.

Activist Juno Mac, author of Revolting Prostitutes: The Fight for Sex Workers’ Rights—a book I intend to read very soon—goes through five legal approaches for dealing with sex work (full criminalization, partial criminalization, the Swedish model, the Dutch model of legalization, and the New Zealand model of decriminalization) and explains why the latter model is likely superior at protecting the rights and freedoms of sex workers. She also explains the importance of including sex workers in the discussion of which legal approach governments should take.

An unfiltered thought on giving directly

[Content warning: Scrupulosity, discussion of poverty and poverty alleviation, one reference to sexual assault.]

[Epistemic status: I’m really just thinking out loud here, haven’t thought this through at all. Note, also, that this applies only for developing countries. There are entirely different considerations when thinking about developed countries.]

[Updates after main text of the post; my views on this have become much more uncertain, and I was already pretty uncertain.]

Here’s an unfiltered concept/idea (haven’t given it too much thinking).

GiveDirectly is a nonprofit organization—a charity, to be more specific—whose main focus is giving low-income people in Rwanda, Uganda, and Kenya unconditional cash transfers. No strings attached. And they give ~80–90 percent of all money donated to them to low-income people; only about 10–20 percent is spent internally on things like administrative costs. They’re a pretty cool charity for a few reasons. They don’t really have much to prove. Reducing poverty is plausibly a good thing in and of itself. Both in utilitarian terms and in non-utilitarian ones. Furthermore, there’s a lot of evidence backing unconditional cash transfers. Here’s GiveDirectly’s website summarizing the evidence. (You might think there’s a conflict of interest, but actually, there’s a lot of external evidence and GiveDirectly is surprisingly honest about things.) GiveDirectly is well-known in the effective altruist community.

If you live in a developing country—like I do—and you want to donate to an effective charity, it might be a better idea to just give money to someone you know who lives in poverty (so perhaps someone who lives on less than $4 a day). It functionally does the same thing as GiveDirectly—neither places any conditions on giving the money. But there’s a few reasons why giving money to a low-income person in a developing country whom you know could be more effective than donating the equivalent amount of money to GiveDirectly.

First, if you live in a country that’s different than Kenya, Rwanda, or Uganda, then there’s a chance that you have greater obligations to people from your country than people from other countries. Most people are deeply uncertain about which moral values are correct. It’s possible that effective altruism’s utilitarian approach is the correct ethical theory—I happen to be a utilitarian myself. But there’s a good chance I’m wrong. It’s possible that contractualism is correct, it’s possible that virtue ethics are correct, and it’s possible that Kantian deontology is correct. So if there are two actions that seem roughly morally equivalent from the most likely moral theory, but are morally very different from a moral theory that’s less likely but still plausible, we should default to doing the action that’s better according to the less likely moral theory. This is an argument advanced by philosophers who have researched moral uncertainty, such as Will MacAskill and Nick Bostrom (they have slightly different approaches, but both of these apply here). How does this apply in this context? According to utilitarianism, there is no moral difference between helping someone in Uganda, Kenya, or Rwanda and helping someone in your country. According to other ethical theories, you have a greater moral obligation to people who are proximate to you, whether in space or in time. And I haven’t heard of a ethical theory that says you have a greater obligation to people who are far away from you or ethically distant—it seems like a less likely ethical theory, in any case. Therefore, you should default to helping equally poor people who you know.

Second, it often makes you more likely to want to give more money to poverty alleviation in the future. There’s something disconnected about the typical effective altruist approach. The things they’re saying might be technically morally correct, but many people have a moral intuition that it is justified for them to help out in the specific areas that they have a personal connection to—whether it’s an ordinary person helping out someone they know in need or a survivor of sexual assault (like myself) wanting to donate to a charity that specializes in helping other sexual assault survivors. Thus, there’s some non-zero chance that the disconnected effective altruist approach actually discourages charitable donation because you don’t feel as good about giving to charity as you would otherwise. At the same time, completely disregarding the effective altruist approach is unfair to the people who need your money the most. However, giving money to a very poor person who you know has a dual benefit—it meets both the effective altruist standard and the personal connection standard. It makes you feel better about what you’re doing. You can often see the impact happen in front of you. And that makes you more likely, consciously or subconsciously, to do it in the future.

Third, in some cases, you are in a position to give other people financial advice—whether it’s how to save money or how to spend it effectively. If you can couple your giving money with advice—if the advice is solicited or you know the person well enough to give it, of course—making it even better at reducing poverty or improving the quality of life of people. Economist Chris Blattman notes:

I think of the time that I’ve spent helping people think through what their options are, and reevaluating those opportunities suddenly changes all of their returns to investment. So that kind of advising and mentoring and connection is unusually powerful.

There’s an important caveat here: GiveDirectly produces another good. That good is research. GiveDirectly conducts randomized controlled trials and checks whether its programs are effective. This is really useful because it informs other charities and other policymakers who are designing social policy. However, I suspect that there’s a good chance that it’s a better idea to give money to someone who is at risk who you know personally.

Update 1

A friend points out that this post doesn’t take into account the effects of scale. So, for example, a $100 cash transfer to a single family is more effective than $4 cash transfers to twenty-five different families. For people with limited money to give on a charitable donation, giving the money to GiveDirectly allows resources from different people—often on different ends of the earth—to be pooled together and donated with reasonable scale. However, a lot of this still applies if you donate a fairly large amount, e.g., the difference between  $100 donations to five different people and one $500 donation is smaller than the difference between $50 donations to ten different people and one $500 donation.

Update 2

My debate coach points out a bunch of smart things—that is, advantages that donating to GiveDirectly has that simply giving money to a low-income person you know wouldn’t have—that I didn’t think of:

  • In many contexts, giving money to someone you know could create a sense of obligation on their part, e.g., giving money to a poor employee or janitor could create, on their part, a sense of obligation that they should work a few extra hours overtime, or that they should try and repay you as soon as possible. This would mean the net effect of my proposal could be zero or even negative.
  • There’s another reason why scale is often important: because organizations like GiveDirectly often give money to many people in the same community. This could have an added positive effect—because it could mean the community could work together to do things like set up self-help groups that allow for the pooling together of resources to do things like borrow money from financial institutions, or to set up cooperative societies, or even the setting up of public goods. However, this must be balanced against potential negative externalities of sudden cash injections into communities, such as a possible higher cost of living.

New data on demonetization

[Epistemic status: I’m more uncertain about the costs and benefits of demonetization than I was in 2016, but I still think it did more harm than good and these data seem to vindicate that.]

In 2016, the Indian government “demonetized” eighty-six percent of its currency notes—₹500 and ₹1,000 banknotes. In other words, it declared them to no longer be legal tender. The logic was two-fold: (1) Reduce tax fraud and tax evasion by being able to more effectively track black money. (2) Move toward a society that was more cash-free and more based on digital transactions, which are easier to track, less vulnerable to theft, and increase the central bank’s control over the money supply.

I have written two articles criticizing this in the past. One, which I wrote for Feminism in India, was suggesting that it had a disproportionate negative short-term impact on women and the LGBTQ+ community. The other, written for my previous blog, was a more generic criticism. My epistemic status, as indicated above, is now more uncertain.

New data from the RBI suggest that the “demonetization gap”—that is, the difference between the amount of cash in circulation prior to demonetization and the amount of cash in circulation now—has shrunk substantially. Here’s JP Koning on Twitter.

This seems to suggest that demonetization has been largely ineffective in achieving outcome (2), at least.

H/T: This was in Marginal Revolution’s links for May 9, 2019.

Congress’s guaranteed minimum income

No, not the US Congress, the Indian National Congress.

The Indian National Congress has proposed a guaranteed minimum income scheme. It has sometimes inaccurately been described as a UBI, but this proposal would involve means-tested unconditional cash transfers (though, with an appropriate tax structure, a UBI and a GMI would effectively be the same thing).

Capital in the Twenty-First Century author and prominent French economist Thomas Piketty is joined by J-PAL co-founder and MIT economist Abhijit Banerjee in helping the Congress with formulating their proposal.

I’m not sure how I feel about this. Here’s some interesting reading on both sides of the issue:

  • Scott Alexander compares a basic income with jobs guarantee schemes.
  • Simon Sarris’s initial article on why jobs guarantees are better than basic incomes and his subsequent response to Scott Alexander.
  • Tyler Cowen on why he changed his mind on a universal basic income.
  • A debate on Debate.org on the subject of a guaranteed minimum income.
  • Put a Number on It defends Andrew Yang and the UBI.

There’s a lot of interesting discussion on this elsewhere on the Internet as well.