Why foreign aid cannot be regressive?


Now, when the European Union seems to be considering a significant increase in aid for Africa—led this time not by humanitarian concerns but by the well understood self-interest as reduction of migration is hard to imagine without a substantial convergence in incomes between Africa and Europe—it is worth pointing out that one argument against aid cannot hold. This is the argument made sometime in popular press (and at times, in academe too), that aid to the poor countries is just a transfer of resources from the poor people in rich countries to the rich people in poor countries. This is what is in economics called a “regressive transfer”. (“Progressive” transfer is what we desire to achieve: tax a richer person and transfer the money to a poorer.)

The complete article

Branko Milanovic — globalinequality

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American Health Care: Is It Worth It?

As Republicans debate plans to repeal or replace the Affordable Care Act (aka Obamacare), it’s useful to look at just what Americans get from their expensive health care system:

Although anecdotal evidence suggests that waiting times are lower in the U.S. than in other countries, true quality indicators are difficult to derive due to measurement errors. So it’s difficult to say definitively that U.S. consumers get better-quality care than people in other industrialized countries, but their care is definitely the most expensive.

San Antonio Review

Image: Healthcare.gov

The Trouble with Incentives


Human beings are complex. It is difficult to predict their response to incentives. Today’s needull is a review of the book – The Moral Economy: Why Good Incentives Are no Substitute for Good Citizensby Samuel Bowles.

According to legend, when the father of modern Greece, Ioannis Kapodistrias, attempted to address the malnourishment of his people by importing and freely distributing potatoes, the Greeks roundly rejected his offer. Heeding Laocoön’s ancient wisdom, the people of the Peloponnese knew better than to trust a Greek bearing gifts. As the story goes, Kapodistrias responded to the people’s refusal to accept the potatoes by unloading a shipment on the streets of Nafplion and instructing his soldiers to pretend to stand guard. The untrusting Greeks would not accept free potatoes—if they are free, something must be wrong with them—but were more than happy to steal provisions so important they needed to be guarded by the army. Kapodistrias’ ploy worked, and potatoes soon became a staple of the Greek diet. In Nafplion, the offer of free potatoes did not stimulate demand. Nor did the threat of punishment deter theft. Instead, the threat of punishment communicated the value of the potatoes. If something is worth guarding, it is worth stealing, and the Greeks responded to the new information by stealing more.

The complete article

Dimitrios Halikias – The New Rambler

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Is your country ready for a catastrophe?


How ready is your country to face a massive change? Today’s needull looks at this critical aspect.

Stiles compares the experience of Haiti in 2010 with Chile, which experienced an 8.8-magnitude earthquake soon after. More than 90% of Chile’s population lost power and thousands of homes were destroyed by a tsunami. But, within three months, the country’s stock market and consumer confidence was back to pre-disaster levels, and economic growth seemed unaffected, he says. Haiti, by contrast, had a loss of more than 5% of GDP in 2010. “Haiti struggled to rebound from the earthquake, hampered by weak government structures, poorly coordinated humanitarian response and loss of key personnel,” he says. Haiti now stands at 123rd in the index, compared to Chile’s 24th place ranking.
Though the top performers are all rich countries, several lower and middle-income nations punch above their weight. Rwanda, officially a “low income” country, is in 46th place ahead of high-income economies like Greece (54th) and plenty of upper middle- and lower-middle-income countries, including Turkey and Mexico.

It’s Time For The Right To Openly Embrace Classically Liberal Muslims

Undeniably, the politicization of Islam is harmful to its followers. What blame to the left and right share in this?

The Right and Left are both playing opposite sides of the same game, and happily so. The Left gets to use its identity politics wedge to create yet another special interest group, and the Right, masochistically, gets a new boogeyman to justify spending more money on police and the military.

The Federalist 

Image: Painting by Brianna Keeper

Waking From the Dream

How well do our brains perceive inequality? Are skewed perceptions to blame for American inequality?

Keith Payne, a professor of psychology and neuroscience at the University of North Carolina, is intent on showing how the problem of inequality operates within the human mind. He does not claim to have studied the historical causes of the American class system, nor does he aim to explore the political or cultural ideologies that have been used to rationalize differences between the haves and the have-nots. His singular focus is on how the brain is evolutionarily wired for ambition and justice alike. When societies such as ours deviate from the primitive sense of fair play, he asserts, everyone suffers.

American Scholar

Image: Painting by Brianna Keeper

All in the Family Debt

What do social conservatism and neoliberalism have in common? They both undermine community responsibility and force families to take on cross-generation debt.

Indeed, many of the policy reforms after the Reagan revolution can be understood as an attempt to reinvent the imperative of familial responsibility in the new idiom of household debt. As policymakers imposed cuts to health, education, and welfare budgets, they simultaneously identified the family as a wholesale alternative to the twentieth-century social state. And as the responsibility for deficit spending shifted from the state to the household, the private debt obligations of family were defined as foundational to socioeconomic order. The family, not the state, would bear primary responsibility for investing in the education, health and welfare of children.

Boston Review

Image: Painting by Brianna Keeper