Discover Your Inner Economist India

by on August 12, 2007 at 6:31 pm in Philosophy | Permalink

I’ve been to India twice and both times I have been received with the utmost hospitality and enthusiasm.  I loved the food, the music, the diversity, and the more-than-occasional chaos.  Most of all I loved how the people engaged me so directly, and how every moment was so full of human drama and stories. 

Since India has given me so much, I wish to make a merit-based gift to India in return. 

My new book Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist offers a chapter on how to help other people.  In the book I suggest several principles:

1. Cash is often the best form of aid.

2. Give to those who are not expecting it, and,

3. Don’t require the recipients to do anything costly to get the money.

I would like to live by these principles, and I am asking you to help me.

If you want to try a new form of charity, keep reading here, because I am about to send money to people in India, to people who are not expecting it and who will not be asked to do much of anything to get it.

You are about to tell me the names of people I should send money to.  I will then send money.

Simple. 

Here is the plan in more detail:

1. The recipient must live in India and receive the money in India.  I just need enough information to send the money via Western Union.

2. Send your email to DiscoverYourInnerEconomist@gmail.com.
Only emails to this address will be considered.  The email must contain
the legal name (as documented on ID papers) of a person who will
receive the money, his or her state in India, and the city of his or
her local Western Union branch.  You can be the person yourself, or you
can send the information on behalf of someone you know.

3. With your email, send a one sentence proposal of how the money will help India.  I am keen to send much of the money to poor people, either directly or indirectly, but of course India is not just about poor people.  Proposals of all kinds are eligible, including using the funds to help expand your steel factory, and yes using the money to open a new call center.  But you must not give the money to beggars

4. Only one email per person is allowed.

5. By the end of the week I will send $1000 to India, via Western Union.  One person will receive $500, the other recipients will get $100 a piece; I will email the wire numbers to each approved person.

6. Recipients of the money will execute their plans for helping India.

7. If/when Discover Your Inner Economist is published in India, further names will receive transfers.  I will send at least the net, post-tax value of my Indian advance.  (If the sale of foreign rights is a multi-country deal, I’ll apportion it by relative sizes of book markets for this kind of title.)

I’ve thought long and hard about how to keep the funds away from scammers, and here is the best I can do: All responders are eligible, but the selection algorithm will favor early entrants.  In other words, MR readers (and their friends) with connections to India have the best chance to read this post early, respond, and thus receive a transfer. 

So I would like to ask you a favor, especially if you are Indian or have connections with India.  Please make your nomination as promptly as you possibly can.  (It is also OK to forward this link to people you trust for their nominations; please do.)  This will ensure worthy entries toward the beginning of the email directory.  I believe that MR readers and their friends will put the money to good use and I am asking you to help me in this manner.

One final request.  I am asking my readers — yes that’s you — to also make merit-based donations to India.

You may have noticed that Alex and I have stopped asking for MR donations; we are happy to be prospering.  Would you instead consider sending some money to India?  I already have had several people pledge money off-line.  Remember our MR motto?: "Small steps toward a much better world."

Making your gift is simple.  Just email me at IndiaMerit@gmail.com and ask for names and emails of recipients.  You also can specify whether you want your money to go to the poor or to an Indian business.  You then send the money yourself and email the recipient the Western Union number of your transfer.  You can even send the money on-line.

No, you do not get a tax deduction but your money goes right to the source, with zero overhead and waste.  Have you ever believed that remittances do more good than bureaucratic foreign aid?  I know I have.  I believe we should be experimenting more with zero-overhead giving (see pp.192-6 in my book), and I am asking you to be in on the ground floor of that experiment.

I know that MR has some very wealthy and very generous readers who even make seven-figure donations.  If you are one of these people, would you consider a larger gift of $10,000 or more?  You can distribute the money to as many or as few names as you like.  Just let me know your plan, and how many email addresses I should forward, and the rest is up to you.  I will keep your identity anonymous unless otherwise instructed.  (If you are a potential recipient of money, but want money only from me and don’t want your email forwarded to others, just let me know in the email itself.)

Addendum: In the comments section, please offer your ideas to others for how to use or give away the money.  You can do this whether or not you have a connection to India.

Seun Osewa August 12, 2007 at 6:38 pm

Why India and not, say, Nigeria? :-)

TGGP August 12, 2007 at 7:11 pm

Perhaps the marginal good the money would do a random Indian is more than a Nigerian? I think this blog has covered the ineffectiveness of aid in Africa before for certain reasons particular to it (corrupt governments, demographic increases matching money/food injections), but I can’t say for sure. Perhaps Tyler just really enjoyed his time in India but hasn’t gone to Nigeria yet?

ST August 12, 2007 at 8:32 pm

Why Western Union? Those fees will eat a decent portion of your donation and feed the corporate monster. Even snail-mailing cash or cheques would be better.

samson August 12, 2007 at 9:40 pm

Mailing checks or cash to India is not a good idea. Mail in India is not as secure as it is in the US.

eriks August 12, 2007 at 10:15 pm

Duly forwarded to a friend who is currently working in India.

Pitt August 12, 2007 at 10:56 pm

Well I have had similar experiences in Nicaragua (great music, good food, generally happy people with life-affirming attitudes). Actually Nicaragua is one of the “happier” (according to qualitative surveys) countries versus per capita income (Haiti I believe is only lower in our hemisphere on per capita income). Nicaragua seems like a young,energetic country with a relatively small population (around 5-6 million) with great potential (tourism, coffee, rum, tobacco, geothermal energy, possible petroleum) if they could just get past some current “inefficiencies”.

So I am willing to send some money to India if you will send some to Nicaragua. Reciprocity. That’s a type of incentive isn’t it? It would be neat to start a good, fun, somewhat viral, world-wide giving program. Is there a way to apply this money so it has a multiplier effect?

KY Choong August 13, 2007 at 12:06 am

Re Tyler Cowen’s Addendum, I support (i.e., make monthly contributions to) two charities – Medicine Sans Frontiere, and Opportunity International. MSF is a specialist in emergency aid (i.e., in fighting fires), while Opportunity International is a specialist in microfinancing (i.e., here’s a fishing net and here’s how you use it). MSF volunteers include many medical staff, and so I’m leveraging off human capital.

I’m generally comfortable that MSF is an accountable, efficient and effective charity. I imagine it would not retain smart doctors and nurses as volunteers if it were not effective and efficient. Particularly impressive was MSF’s willingnes to announce that it would cease collecting funds in relation to the 2005 Tsunami tragedy when it felt it had more funds that it could handle. MSF has also started podcasting, which is another form of accountability.

I’m not as comfortable with Opportunity International. I can’t see its financial statements or annual reports, and I did not get a response to an email I sent recently, inquiring if it had audited financial statements. However, Opportunity International (but not MSF) is on my firm’s Workplace Giving program, which means that my firm matches donations to this charity, dollar for dollar. I’m relying on my firm’s Workplace Giving program to vouch for the effectiveness of this charity.

I’d be grateful for any comments/suggestions on whether I can do better (than as outlined above) for the ongoing monthly financial contributions I currently make. I assume we need to both fight fires (where the short term need is greatest) and invest in human capital (to make a long term contribution).

I’m also interested in people’s thoughts on what a charity could and should do in relation to accountability to its financial donors. I assume it is not enough to just provide audited financial statements. Unlike “for profit” organisations, it may not be clear what performance measures apply to charities and what their mission is. Perhaps a mission statement plus a set of performance measures (together with annual reporting against those performance measures) is required.

I also wonder if charities need a regulatory framework (analogous to that applying to publicly listed companies) to help discharge accountability to financial contributors. What scope is there for charities to develop such a regulatory framework themselves, or is it appropriate for the government of each country to establish a regulator (e.g. the UK Charity Commission) to foster its citizens’s confidence in the charity sector? I feel that there is currently some kind of “market failure” in the charity sector.

Vivek August 13, 2007 at 1:13 am

Here is a suggestion in case you would like to invest in education/health. This is a small effort run by a great lady in Indian capital. Please take a look at the website http://www.projectwhy.org/ and her blog at http://projectwhy.blogspot.com/
Thanks!

Pablo Stafforini August 13, 2007 at 1:58 am

Why not make your donation conditional on others doing the same? Don’t merely urge loyal MR readers to donate money; give them an incentive to do more good than they would otherwise.

satish August 13, 2007 at 6:06 am

hi tyler,
nice job.
I would like to thank you doing this, I’m sure this idea of your will surely lead to introspection among a billion Indians who are spread across the globe.
Like they say “God helps those who help themselves”

One again I hope you act triggers a domino effect around the world and bring smiles all over.

cheers
satish
bombay,india

Noumenon August 13, 2007 at 7:30 am

I know that MR has some very wealthy and very generous readers who even make seven-figure donations.

Well, no wonder you aren’t asking for contributions any more — that would just be greedy.

GVV August 13, 2007 at 10:26 am

Prof.Cowen,

There are many very poor but bright students pursuing their studies in economics in Govt.Colleges (where they get fee concession)in India who can’t dream of buying a good book in economics because it is beyond their meagre budgets(for example,the graduate students’ studylist include costly books such as “Modern Macroeconomics”by Brian Snowdown and Howard Vane published by Edward Elgar priced at too costly a level in terms of Indian Rupees).Instead of money, you can send classic books in economics (if you have extra copies).That will greatly benefit the graduate students who come from poor families.

Steve August 13, 2007 at 12:03 pm

Kiva.org was mentioned above. This is a microfinance scheme where you can invest money (not donate but also not receive intrest) in local businesses around the world. I personally have invested in a bus service and beauty parlor in Hondurous, a video rental store in Azerbajani, and a taro farm in Samoa. You get the money back over time as the loans are repaid and you can then reinvest or donate it to kiva.org to help them.

This is very low overhead and I believe the money goes directly to people who can and will use it to improve their lives and the local economy.

It seems that sending money through Western Union to semi-random individuals is a kinda expensive but interesting econo-performance art piece with an iffy positive outcome potential.

Swami August 13, 2007 at 12:38 pm

I need to put in a good word for AID (Association for India’s development)

Dan August 13, 2007 at 1:10 pm

The Centre for Civil Society, a think tank in India, recently launched a school voucher campaign to improve educational opportunities for poor children. They raised private funds and awarded tuition scholarships to 400+ students to attend private school.

There are many problems with the government schools in India. And the private schools, even in very poor neighborhoods, often provide a better education at just a fraction of the cost.

In all, more than 100,000 kids applied for scholarship. The cost of the voucher is low (about $150 per year). Providing more funds for scholarships would help more poor children receive a quality education, while building support for promising education reforms.

For more information, see: http://schoolchoice.in/campaign/index.php.

Sonia August 13, 2007 at 1:43 pm

What a great idea. Let a 1000 flowers bloom. After returning from India I wanted to donate for village girls education. Couldn’t decide among the various organizations. So in the next 15 minutes I will just trust my judgement and pick one. A preceding post described the (positive to my eyes) effect of bringing TV to village women. It is not always obvious what will empower women. Will be great to see the winning ideas.

gaddeswarup August 13, 2007 at 6:36 pm

I usually try to find through friends in India about organizations which are functioning well (some function well for a time and then politics take over). One couple that I know, Aravinda and Ravi, are both Ph.D’s from USA and work for Aidindia. The last I heard, they were taking books in suitcases (travelling libraries) to village children in North Coastal Andhra. There are lists of aid organizations in http://www.gopio.net/india_development/best_pratices.htm and
http://www.whatisindia.com/issues/nongovto/index.html and then there is KIVA which seems good.

Rajesh August 13, 2007 at 9:04 pm

I’m completely floored by the reference to Kumarji. Just last month I saw a documentary (in Hindi) on him by Jabbar Patel – it should be coming out as a DVD with subtitles in a few months/years.

I’ll forward your aid effort to my folks back home.

jack sparrow August 14, 2007 at 12:47 am

Dr. Cowen,

I am unable to understand the logic of your merit-gift definition? You don’t explain the “incentive” behind such a gift. Any merit that is defined in terms of perceptions of only the gift-giver should be doubted as being meritful. Because such a definition preimposes a subjective belief of merit, so whomever the gift-giver gives a gift is meriftul in this sense. So Paris Hilton could be very meritful, if we just go by such a definition to explain gifts, since her gift-givers might subjectively think that she is very meritious. I think you forgot to apply the concept incentives to gift-giving in this occasion.

“The value of the gift may be correlated with how the giver perceives the merit of the recipient, but rarely is merit the pretext for the gift. Perhaps a general practice of explicit merit-based gift-giving would create too many perceived slights. In contrast, when a holiday is the pretext and the value of the gift is (possibly) linked to merit, we can self-deceive and believe that a small-valued gift simply represents a cheap gift-giver, or a friendship of uncertain strength, rather than our own lack of merit.”

Since you are trained economist, I am surprised by this post of yours.

“…send a one sentence proposal of how the money will help India.”

Can you tell us what you want to be maximized with your money. Do you want to maximize the return on the money for anyone who receives it or want it to go to someone whose utility will marginally increase by the highest amount with this money? (even though the return on the asset won’t be the highest in the second case, so India’s GDP won’t necessarily be optimally increased by the potentional earning power of this money.)

It will be very nice of you, if you can answer the above question for us.

Sreya August 14, 2007 at 1:17 pm

India has a huge number of new and struggling(financially)service provider non-profits in every state. Most of the well established non-profits with US connections and offices like CRY, Helpage get a huge amount of donations from around the world but it is the smaller and newer organizations that are working in a relatively new constituency for example, working with urban low-income families or teaching urban low-income women new skills that they can market and earn supplemental income or providing free tuition classes to urban low-income family children over and above their public school education (which is of very poor quality) that need some extra support.

I feel that there is a tendency to only aid chronically ill constituencies in rural India whereas the easier targets in cities who have the street-smart savvy to pick up skills more easily, go unaided. They need at times, very little support to succeed like, access to extra tution classes or access to a bank account and some budgeting knowledge, a forum where women with similar skills can get together and sell handicraft items or access to legal aid for civil cases.

There are many such organizations in Kolkata, West Bengal, of which I am aware of personally. There are similar non-profits in other Indian states as well. They don’t get funding easily as they have not become that popular with Indian or international press. One reason might just be the size of these non-profits. They are very small with only 20 members and a niche or boutique constituency. Though their advantage over other umbrella non-profits that cover a lot of geographical area and activities is that they are specialized in working with a certian kind of population. e.g, delinquent street children in Kolkata.

As these organizations are typically new and don’t have enough money to maintain websites getting in touch with them can be a challenge. I will let a few of these non-profits know about this opportunity.

It is important to give money/funding/aid/support to organizations that are going into unchartered fields and trying to solve unique social problems in urban areas as well as supporting similar activities in rural areas. It is because their objectives are particularly narrow and concentrated that they are being able to solve some social problems. Smaller non-profits don’t have big bureacratic/management baggages. That is the reason why they can work more effectively and swiftly.

vish August 14, 2007 at 8:19 pm

The Association for India’s Development (at http://aidindia.org) is a leftist organization. They inveigh against “neocolonial liberalization” in well-funded seminars both in India and the San Francisco Bay Area. Please peruse their website before funding them.

S.Mohanakumar August 16, 2007 at 1:48 am

I wanted to start a nursary school for the poor people in Kerala who have too little money to send their children to the school. I am a Government employ getting a small salary. This ambition is in my mind for so many years but couldn’t fulfil due to financial difficulty. Can you help?

Prajwal August 17, 2007 at 7:20 am

A few ideas:
1. Insure a working individual (farmer, etc)
2. Give extra work tools to skilled professionals (plumber/electrician/carpenter) to take on apprentices.
3. Gift a lockable bookshelf with reference books to rural school masters.

chandra August 20, 2007 at 1:36 am

I think money is not appropriate to india. India still believe in Gurubhyo Namah (solute teacher). I would suggest to send books on personal finance to indian primary school teachers to teach in their classes. It would help to the generations than any cash.

Radha Arun August 20, 2007 at 10:12 am

Radhika, a Dalit girl whose father works as a watchman in a private building in Hyderabad, has a flair for cooking; if given money she could do a cookery course and an English speaking course and go into the somewhat higher end of the catering business. She has an amazing natural sophistication as well as intelligence. She has a bank account,so ID would not be a problem.

Akshay Saxena September 2, 2007 at 10:23 pm

Dear Doctor,
Your idea to help people who have some innovative ideas and are coming forward for upgradation of society is certainly appreciable.

Ferry April 15, 2008 at 3:08 am

i need help, my father just pass away, and my mother is in lots of debts and now i can’t finish my study because i can’t pay,
i have a lot of debt myself just for a meal, and even my staying cost have pile up so that this is near the limit of my life pls donate to account number 304-10-08180-3 hope i can help you in any way.
and i’m sorry for doing this.

jayanta kumar pal April 22, 2008 at 12:26 pm

I live in india. I want a donation from any person for my poor and hungry people of my villagers.I want todo somthing of them with your support.

tushar patil September 6, 2008 at 8:58 am

help the comunity who can change ower upcoming generation which will not distroktive and which will very intelligent and peace making and they will make earth haven
i know that center which help this
thing
they tell use how to traine ower child so that he will become very intelligent and peace maker in this world and they will make earth as have -*—————you know one thing this thing can be teach pre birth only

Raj September 28, 2008 at 3:11 am

Indians, STOP begging!!!!!

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