The author has a good point about traditional donation-based altruism not always being the most effective in achieving the end goal of ending poverty. For example, dumping hundreds of tons of second-hand clothes in African countries has a huge negative impact on local textile industries [1]. So while you're helping clothe people short-term, you're depressing wage opportunities long-term. I believe (could be wrong) that something similar happens with donated bulk food products.
I'm a fan of one of the author's later suggestions to implement a UBI-style setup and give people money directly rather than playing whack-a-mole with specific needs. The challenge there, of course, becomes political and safety concerns in less-stable areas. That's a problem that might not have a private sector solution short of paying mercenary forces or supranational compounds. I'd love to hear other peoples' thoughts.
The author is not talking about traditional donation-based altruism, but about the 'effective altruism' (EA) movement, which is definitely interested in evaluating the effectiveness of different interventions. The comments you make probably place you squarely in agreement with the EA Camp. Give Directly (a UBI style setup) is in fact one of the charities recommended by Give Well (an EA organization).
It seems like if an NGO provided a UBI in a region that was controlled by a dictatorship, the dictatorship could simply take all the money. When taxes are not set democratically, giving money to individuals seems roughly equivalent to giving money straight to a dictator.
GiveDirectly has a lot of experience with cash transfers through M-Pesa and similar systems. I don't know exactly how much corruption they have to confront, but they might be better at cutting through it than you'd think.
The problem isn't even "corruption" per se. A dictator can do this entirely legally by simply raising taxes in an area (or cutting investment in public services) whenever NGO-provided cash or services lets the people there afford it. The problem is inherent to governments that are unresponsive to their people.
We should also stop requiring poor nations to follow intellectual property laws. If we didn’t make them pay high license fees for medications etc they wouldn’t be so destitute. Broadly speaking if local economies could develop producing and selling clones of important goods, they could grow their own economy more easily. Intellectual property restrictions are a completely human made notion that keeps the powerful wealthy but it harms the poor. And unfortunately the WTO and IMF have long required harmonization of IP restrictions as a condition for aid money. We forced them to abide by our rules in order to “help” them and it’s doing great harm.
Which particular medications are keeping these people destitute? Which producers of important goods in poor countries are enforcing IP restrictions? In practice, I don't think IP laws are keeping developing countries poor or harming their economic growth, causes of such issues are much more macro
"By lending as little as $25 on Kiva, you can be part of the solution and make a real difference in someone’s life.
100% of every dollar you lend on Kiva goes to funding loans."
"Kiva borrowers have a 96% repayment rate historically."
I routinely give on Kiva but I feel bad knowing that the APRs actually offered are like 30%+ to the guys receiving the loans. Can the cost of administration be that severe?
It's some nonsense method of calculating. It's somewhere on the site.
Kiva provides zero-interest loans to µfinance partners, they charge interest to the actual guy who wants to buy a cow, then return the principal to Kiva who gives you back the money. So yeah, Kiva provides zero-interest loans, but the cow guy getting the money is paying like 20%-80% APR.
I think it was their partner Credituyo that was patently ridiculous, like 80% APR loans and shit. But don't quote me on that. Probably have a bunch of other similar partners.
There are two reasons why the loans are 80% APR, either because lots of them fail to repay (which goes against the 96% repayment rate) or because the recipients of the loan generate enough value to justify paying 80% APR. (unlikely because that would have attracted a colossal amount of investors and reduced yields back to the single digits that are available to other markets).
Honestly, looking at it, it would be better if they just obtained the funding themselves by borrowing it at low interest rates and you just pay a subscription fee to cover the interest and administrative costs.
The main reason is that administering small loans is expensive: costs of administering/chasing the debt don't really scale down just because the loan itself is only $50, and most of these entities seek to turn a profit too. Additionally there's a suspicion the middlemen sometimes use other loans' interest payments to cover defaults since nonrepayment makes them look bad to Kiva lenders.
Zidisha (YC14, nonprofit) cut out the middleman to do pure P2P lending in the developing world at much lower rates but at least when I was on the platform had significant issues with defaults even with local volunteers helping with chasing (and some defaults definitely weren't planned).
I agree, imo the biggest change would need to come from governments themselves. This is why I think I get more altruistic "bang-for-my-buck" by donating to Bernie Sanders, Andrew Yang, the Squad, and other progressive candidates b/c we really need to move beyond capitalism.
I'm a fan of one of the author's later suggestions to implement a UBI-style setup and give people money directly rather than playing whack-a-mole with specific needs. The challenge there, of course, becomes political and safety concerns in less-stable areas. That's a problem that might not have a private sector solution short of paying mercenary forces or supranational compounds. I'd love to hear other peoples' thoughts.
[1] https://www.bbc.com/news/world-africa-44951670