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Logo of Phnom Penh Post newspaper Phnom Penh Post - Comment: Streetwise guide to charity that boosts GNP

Comment: Streetwise guide to charity that boosts GNP

Chourson Tiun adds his two cents worth to the debate on helping

Cambodia

Each day I catch a moto from my house to my place of work,

approximately three kilometers... outside his house all competing for the

excessive payment he would bestow on the lucky driver he would choose to ride

with. He explained to me that each day they wait outside his house for 20

minutes or so before he leaves, and he alternates his drivers each day. Thus the

three moto drivers each on average earn 1500 riel per day - the same amount as

the one moto driver I employ. However the incentives created by my friend's

excessive payments actually harm the economy. The behavior of the two moto

drivers who each day drive to his house, queue for 20 minutes, and do not get

chosen, is pure waste. They do not produce any valuable service for our

economy.

Let us suppose that in alternative employment, in the same time,

these drivers could earn 1400 riel. If my friend only paid 1500 riel for his

ride, these two excess drivers would no longer queue to take him to work - their

expected salary would only be 1/03 x 1500=500 riel. They would instead take the

alternative useful jobs, producing 1400 riel worth of goods each. Thus the net

effect of my friend's behavior is that it actually reduces the GDP of our

economy by 2800 riel and replaces it with 3000 riel in charity.

We should

be especially wary of making excessive payments in the guise of helping people -

often such payments create incentives which motivate people to change their

behavior in a way which does more harm than good to the society. Let me give

some examples.

 

You are walking through a market and are confronted by a very skinny mother

nursing a small malnourished child. Excessive payments to her will have two

effects - stimulate very poor women to have babies so that they can earn more

money begging, or women may take friends' babies, perhaps underfeed them, and

thus use them to become an effective begging combination.

You are having a meal, and a beggar without legs hobbles to your table. The

beggar is covered in dirt and very skinny - feeling sorry for him you give him

$3. The average daily wage in our society is about $2. If beggars without legs

know that on average they can earn $3 a day from charity, then healthy

Cambodians in extreme situations may resort to a practice that is now very

common in India - having limbs removed so that they can earn larger salaries as

beggars.

Tips for giving charity. There is nothing wrong with being philanthropic,

however you must follow certain counterintuitive rules if you wish to give in a

way that it does not provoke the economy to reduce production and chase

charity.

Always behave inconsistently and erratically when giving charity. If my

foreign friend who each day caught the moto, had simply thrown the excessive

payment of 3000 riel onto the street when going to work, for some lucky person

to find, then the charity would not have been wasted. But he must be careful not

to do this each day in the same spot, otherwise people will gather waiting for

him to throw his riel onto the street.

Give to people if they are objectively poor, whether they are begging or not.

Do not favor people simply because they are engaging in begging behavior, but

rather give to the people who look like they need it most. However, in our

society being given charity is considered an humiliating experience for the

recipient. Therefore I advise the strategic "accidental dropping" of money. This

will appear to the finder as merely good fortune and thus will not encourage

people to look poor or to beg. I regularly shop at Dang Kor Market next to the

Municipal Theater. Often, the poverty makes me want to cry. Obviously there are

no beggars there, but somehow I frequently "lose" quite a lot of money when I go

there.

Try to give in very small amounts too as many people as possible. Thus if

there are five beggars outside Lucky Market, rather than giving the thinnest

beggar $1, it is far better to give all five of them 500 riel - the $1 payment

merely encourages the beggars to starve themselves. Do not hesitate to get

change from them, so that you can give to all of them. Also, endeavor to donate

money in as many different locations as possible. It is important to not help

cultivate, or reinforce, an environment where beggars can earn more money

through harassing and annoying conduct.

Much joy is obtained from giving charity. To make sure the people do really

enjoy it, and are not motivated to engage in socially wasteful behavior which

dissipates the benefits of giving, keep your behavior as unpredictable as

possible, give in varied ways, and give in small amounts to as many people as

you think need the money.

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