Ah, ok. That’s a fair point. There is a substitution effect. My main intuition here, though, is that extremely effective NGOs like BRAC basically provide a parallel public health / social safety net for people, yet often-times what would be great is if the government itself was able to provide these services. There is a substitution effect no matter what organization you donate to. For example, I would bet money that public health departments where Against Malaria is more active counterfactually spend less on malaria prevention than otherwise.
e.g. here’s an excerpt from Stefan Dercon’s recent book, Gambling on Development:
Success in delivering effective health services stands out, and although the government expanded services, the most dynamism at scale was offered by NGOs. The role of BRAC (originally the Bangladesh Rural Advancement Committee) was pivotal. In 1990, it developed a model of community health workers, some paid but many volunteers, who offered advice but were equipped with basic health and sanitary products they were allowed to sell. By 2005, BRAC workers were outnumbering government community health workers. With other NGOs following suit, more than three-quarters of health workers are now supplied by NGOs. BRAC alone reached up to 110 million people with health information and basic services, such as detecting the vast majority of malaria and tuberculosis cases in the country.
As far as your example on counterfactual funding—we could gauge what the government was spending on malaria prevention before AMF started up operations in the area, and what it was spending after. If pre-AMF spending on malaria prevention in an area were low, that sets the ceiling on how much AMF spending could be crowding out local government spending in that area. I think GiveWell tries to account for crowding out local funding.
You could give money to the subnational government earmarked for a specific purpose that you’re confident that the government wouldn’t have counterfactually funded. However, that burdens the developing country public health services with managing your and 100 other donor earmarks, and potentially destroys some of the advantages of working within the public system.
Perhaps you could try a fancier earmark, conditioning a grant for more health workers on the government funding as many workers as it had before. But that’s going to require even more monitoring, and you may also be locking the government into spending its own money in a way that’s suboptimal to meet your grant terms.
If you don’t earmark to something that wouldn’t have otherwise been funded, you risk an equivalent reduction in public spending and the net effect of your donation going to better roads or something (not trivial, but just a general donation to the government). That’s a 100 percent slippage.
So while I agree that there’s likely some substitution effect in all cases, the magnitude of that effect (as well as the administrative difficulty and cost of mitigating the risk) could vary by an order of magnitude.
That’s not to say you couldn’t find a way to do what you’re suggesting without incurring more-than-AMF levels of substitution effects . . . only that I think it would be rather challenging.
Ah, ok. That’s a fair point. There is a substitution effect. My main intuition here, though, is that extremely effective NGOs like BRAC basically provide a parallel public health / social safety net for people, yet often-times what would be great is if the government itself was able to provide these services. There is a substitution effect no matter what organization you donate to. For example, I would bet money that public health departments where Against Malaria is more active counterfactually spend less on malaria prevention than otherwise.
e.g. here’s an excerpt from Stefan Dercon’s recent book, Gambling on Development:
As far as your example on counterfactual funding—we could gauge what the government was spending on malaria prevention before AMF started up operations in the area, and what it was spending after. If pre-AMF spending on malaria prevention in an area were low, that sets the ceiling on how much AMF spending could be crowding out local government spending in that area. I think GiveWell tries to account for crowding out local funding.
You could give money to the subnational government earmarked for a specific purpose that you’re confident that the government wouldn’t have counterfactually funded. However, that burdens the developing country public health services with managing your and 100 other donor earmarks, and potentially destroys some of the advantages of working within the public system.
Perhaps you could try a fancier earmark, conditioning a grant for more health workers on the government funding as many workers as it had before. But that’s going to require even more monitoring, and you may also be locking the government into spending its own money in a way that’s suboptimal to meet your grant terms.
If you don’t earmark to something that wouldn’t have otherwise been funded, you risk an equivalent reduction in public spending and the net effect of your donation going to better roads or something (not trivial, but just a general donation to the government). That’s a 100 percent slippage.
So while I agree that there’s likely some substitution effect in all cases, the magnitude of that effect (as well as the administrative difficulty and cost of mitigating the risk) could vary by an order of magnitude.
That’s not to say you couldn’t find a way to do what you’re suggesting without incurring more-than-AMF levels of substitution effects . . . only that I think it would be rather challenging.