Red

From Marginal Revolution:

Advertising Age calculates that around $100 million has been spent blanketing billboards and magazines with images of Bono and other “celebrities”, while the total sum raised for Africa is $18 million.

Just to be clear… Total spent on making Bono more famous = $100 million.

Total spent on drugs for Africans = $18 million.

Some would say $18m is better than nothing. Others, like us, would say let’s not be afraid to learn from our mistakes and Red has been a bust. Doesn’t mean that it was a bad idea to try or that we should come down hard on the participants. But we should also be open about what works and what doesn’t. It appears that this branded-consumption-for-aid appears to be an exceptionally inefficient method of raising charitable contributions.

Also, while on the subject, what does the #1 econoblogger think of Africa’s prospects?

My long-term prediction is that Africa will stay quite poor. Rich countries should offer Africa complete free trade, but the benefits of this move are overrated. Low productivity, and transport costs and corruption within Africa remain the central problems, not foreign tariffs.

Libertarians are too quick to say that foreign aid is counterproductive. Most African governments would be corrupt anyway, and there is usually some positive trickle-down from the aid. The wastage is massive, and I can understand the desire to stop sending government-to-government aid, but there is a real moral dilemma.

I also think most of Africa is in a Malthusian trap. That is perhaps the better critique of aid, but alas also of trade as well. But even within this trap, wealthy foreigners can help make the transition from one steady state to another less painful. And the trap need not hold in every local corridor. Plus we are offering a lottery ticket (with what p?) out of the trap. Malthus doesn’t mean we should turn our backs on suffering.

He goes on to say that “You can do some good if you are willing to directly administer medical treatments to Africans, in Africa,” which is basically what Bill Gates is doing. Anything beyond that is doubtful to have much of an impact Red iPods and Bono billboards notwithstanding.

tags: red africa

This entry was posted on Wednesday, March 7th, 2007 at 8:57 am by Insider and is filed under I knew I'd use my Econ major. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.