Those who worked making and selling bednets lost their jobs
… perhaps net donations do more harm than good, and holding back economic development more than cancels out the benefit of fewer cases of malaria.
This doesn’t seem likely to me. Sketching the simple logic …
AMF gives out X free or nearly-free nets
The people making and selling nets lose net income X(p-c), where p is the price and c is the materials cost (p-c is their markup). But they can use their recovered time T to produce and earn at least something else, worth w*T (w is their productivity or ‘wage’ in the next-best job).[1]
The people who previously bought the nets get back X*p they can use to spend on something else, stimulating other ‘multipliers’.
The economy as a whole is augmented by Xc (as AMF pays the cost of nets) + wT (the recovered value of time of the net-makers)
I also don’t think that being ‘frozen out of the job market’ is as big a thing in low-income countries, as they tend to have much less regulated and less rigid labor markets… more casual and informal labor
Agree with your outline of first-order impacts. My concern is with wider consequences not included in that view. The world is a complicated place and unintended side effects can be significant and negative. This is even possible under the assumption that such distributions are viewed as a good thing by locals. For example:
For citizens, the lesson may be “Random acts from people far away determine my circumstances, so there’s little I can do to improve my lot”. That would hold back all economic development in a way that outstripped the benefit of anti-malarial bednets.
For workers, the lesson may be “You can lose your job and your whole industry overnight, so don’t specialise”. That’s a bad outcome because specialisation is a huge driver of economic progress.
For business owners, the lesson may be “The risks of starting a new venture are higher than before”. Destroying incentives to start useful businesses is certainly a backwards step.
For governments, the lesson may be “It’s better to be appealing to foreign donors than to sort out our own problems”. Another backward step, because no nation in history became rich waiting for others to help them out.
I don’t think these the the most likely outcomes, just that they are possible. If somebody thought these things were not a risk, they would need to have an extremely high level of confidence in their model of international development and be able to explain why.
This doesn’t seem likely to me. Sketching the simple logic …
AMF gives out X free or nearly-free nets
The people making and selling nets lose net income X(p-c), where p is the price and c is the materials cost (p-c is their markup). But they can use their recovered time T to produce and earn at least something else, worth w*T (w is their productivity or ‘wage’ in the next-best job).[1]
The people who previously bought the nets get back X*p they can use to spend on something else, stimulating other ‘multipliers’.
The economy as a whole is augmented by Xc (as AMF pays the cost of nets) + wT (the recovered value of time of the net-makers)
I also don’t think that being ‘frozen out of the job market’ is as big a thing in low-income countries, as they tend to have much less regulated and less rigid labor markets… more casual and informal labor
Agree with your outline of first-order impacts. My concern is with wider consequences not included in that view. The world is a complicated place and unintended side effects can be significant and negative. This is even possible under the assumption that such distributions are viewed as a good thing by locals. For example:
For citizens, the lesson may be “Random acts from people far away determine my circumstances, so there’s little I can do to improve my lot”. That would hold back all economic development in a way that outstripped the benefit of anti-malarial bednets.
For workers, the lesson may be “You can lose your job and your whole industry overnight, so don’t specialise”. That’s a bad outcome because specialisation is a huge driver of economic progress.
For business owners, the lesson may be “The risks of starting a new venture are higher than before”. Destroying incentives to start useful businesses is certainly a backwards step.
For governments, the lesson may be “It’s better to be appealing to foreign donors than to sort out our own problems”. Another backward step, because no nation in history became rich waiting for others to help them out.
I don’t think these the the most likely outcomes, just that they are possible. If somebody thought these things were not a risk, they would need to have an extremely high level of confidence in their model of international development and be able to explain why.
Those are some reasonable negatives. I’m working to brainstorm some positive knock on effects to counter this. :)