Paul: I don’t think the argument about kids necessarily hinges on the view that their parents don’t care enough about them. I think you only need to believe that parents don’t care as much about their kids as their kids care about themselves, which seems more plausible to me.

I think you’re mostly right about the market availability issue, but that the “reasonable expectation of public provision” point remains and is fairly important.

Jenny: thanks for sharing your blog post. I think that well-documented cognitive biases are a big part of the right way to make the case for paternalism, but I have a couple additional worries:

• I think the Sunstein/Thaler case for “libertarian paternalism” partially depends on the democratic legitimacy of the state. Given that philanthropists can’t be voted out of office, I think we face structural difficulties with accountability in our attempts at well-meaning paternalism.
• If we knew everything that local individuals knew and all of their values, then perhaps we could decide for them without running into these biases, but of course that’s impossible. We face a tradeoff between our ignorance about local conditions and values and our more distant, “rational” approach to decision-making. The case for paternalism seems to rest on the idea that the information we lack about local values and conditions is more than made up for by our superior rationality. Although I believe this is probably the case sometimes, I think the assumption to the contrary is probably the better one, on average.

Phil and Colin: I think you’re saying similar things, and it gives some insight into why people are more skeptical of cash transfers than I am. I think Colin’s caveats explain part of the reason that I feel differently about this case than the domestic welfare case.

Peter W: economies of scale could be a factor on the other side of the ledger, but my guess is that they play a relatively small role. On the other side, private provision might enable more competition to drive down prices.

(Of course, there are multiple differences. For one, the US case is only for a portion of the population, not the median family. Secondly, the US case is more purely paternalistic, since e.g. anything you can buy with foodstamps you can buy with cash, but it might not be possible to buy to bednets. Etc., etc.)

Before we can say anything substantive on this issue, we need more data on the effectiveness of direct cash. However, if we assume that direct cash does turn out to be effective, then I feel we should err on the side of direct cash, unless there is a compelling reason not to, such as with malarial nets, which may not be purchased at all because they are used to free nets.

If I want to fund libraries rather than giving them cash that is fine with me. If I want to fund a park so kids and adults can play and get exercise I think that is fine.

I do like how you all evaluate the effectiveness of various giving strategies. If giving cash has substantially more measurable benefit than giving school nets or funding health care or education or entrepreneurship wonderful. That is a good piece of data to evaluate.

I accept from capitalism that letting people decide what to do with their cash instead of having a state 5 year plans is wise. That is far different from saying people are brilliant with deciding how to spend their cash. I believe overall people are less than than state 5 year plans, but I don’t think they effectively optimize their spending for their desires. And that isn’t about treating them like kids. It is that many people make lousy decisions with their money. Thinking giving people free rain by just giving them cash isn’t a sensible goal in my opinion.

On top of all that, many times individuals can’t buy a solution that can be put together realistically. You could fund a library. Giving out a bunch of cash and then while those people theoretically could fund a library practically it is likely unrealistic (the logistics and even vision are just not likely to come together even if it is what would give the greatest good from their collective individual interests).

I guess I shouldn’t have implied that those interested in GiveWell style charitable analysis and donation are necessarily sugar daddies to their relatives and relatives’ children.

But I do hope that by bringing the analogy of how to help someone in need closer to home, that those who are fans of the GiveDirectly approach can see why I, and probably others, are more skeptical about it.

Imagine a wealthy individual (the benefactor) who wishes to enhance the life of a young niece or nephew (the child). The recipient has a single parent, but that parent has various problems in their own life (perhaps drugs or alcohol or other issues) that have put them in a poor position economically to support their own child, and furthermore call into serious question their ability to make good choices for their child.

The child is perhaps 12 or perhaps 15 or perhaps 18 or 21. I’m not sure the age makes a huge difference. But the child is immature (not surprisingly) and lacks for good role models.

So, how should the benefactor extend support to the child?

1) Send the child a one time check for $50,000
2) Send the child ongoing payments of $500/mo for several years
3) Do either 1 or 2 by proxy, sending the money to the parent
4) Pay for something specific with durable value to the child – a suitable education at college or a trade school

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I think most of us, given a choice, instinctively would lean towards #4. Call it paternalistic. Call it a distrust of the wisdom and intentions of either the child or the parent.

GiveDirectly sounds a bit like option 1 or 2. Direct (or nearly so) financial support to questionably competent 3rd world governments sounds a bit like option 3. The more traditional charity/aid model of attempting to find a specific need (perhaps ITNs) in the target community and addressing it seems like option 4.

As Holden has discussed elsewhere the development field is crowded with “white knights” arguing that their approach produces good results for the poor. Sadly, few are asking the tough question: are the results good enough to justify taking money that could have been given to the poor and using it on someone else’s idea? At GiveDirectly we share your view that there should be a presumption in favor of letting the poor set priorities. This leaves space for other interventions if a convincing case can be made that they will do more good for the poor than the poor could do for themselves given the same funds.

On bednets versus cash, I personally find the externalities argument (#1) most compelling, though apparently better numbers here would help. The argument about children (#2) seems to hinge on the idea that parents care too little about their kids – I don’t know if this is true or not, but are there data that inform your view here? The argument about availability (#3) seems a bit too broad to me; after all, there are plenty of products that are not available in low-income areas for the very good reason that poor people don’t see them as a high priority and don’t want to spend precious pennies buying them.

Full disclosure: I have given to bednet charities in the past because I believed that the external benefits were large.