Tuesday, February 15, 2011

Second Thoughts on Giving Goods in Kind to Less Developed Countries

In a blog post fabulously titled "In Zambia, Pittsburgh won the Super Bowl", William Easterly documents the unhelpful practice of sending less developed countries stuff we don't want. He criticizes World Vision for sending them loads of NFL t-shirts that are unwanted in the U.S. because they were printed featuring the Super Bowl losing teams. The NFL does this so fans of the victors can get their team paraphernalia as soon as possible no matter who wins. World Vision has an agreement to take the loser shirts and give them to people in less developed countries. Why would an expert in foreign aid be critical of providing necessary clothing to the less fortunate? Three reasons:

  1. It’s not needed. Seriously, neither the developing world as a whole nor the specific recipient countries named by World Vision suffer an undersupply of T-shirts.
  2. It’s not cost effective. The cost of collecting, sorting, shipping and distributing bulky, low-value items like a bunch of T-shirts does not justify the (very questionable) benefit. And don’t forget to include the opportunity cost, the lost chance to allocate those same, considerable resources to provide something better, like clean water or medicine. (A World Vision PR rep told the New York times in 2007: “Where these items go, the people don’t have electricity or running water.)
  3. It can perpetuate local community’s dependence on free handouts and stifle home-grown economic initiatives, not to mention putting out of business local shirt sellers.


  1. Regarding point #1: Isn't there always an undersupply of free goods?

    Regarding point #3: How is this different from any other argument that cheap foreign goods destroy local jobs? Doesn't it just mean that local shirt-sellers will sell something else, so locals can have t-shirts plus that other thing? Also, this seems to assume, contrary to point #1, that locals do indeed prefer free t-shirts to not-free t-shirts.

  2. Regarding reason #2, the opportunity cost is largely irrelevant, since the resources have already been committed to the shirts. And since something has to be done with the shirts, the opportunity cost of shipping sunk costs isn't going to be much higher than disposal or recycling, if at all.