Wednesday, March 4, 2015

A Path Appears by Kristof and WuDunn ****

Poverty and charity might be two of the most complex issues in the world today. A Path Appears by Kristoff and WuDunn attempts to make sense of the "1.4 million [aid groups] already operating in America."

As with all people who want to be careful about the groups they support, the authors are torn between to emotional satisfaction of a good story and their intellectual need for careful data and analysis. Much of the philosophical angst centers around the asymmetry between donor and beneficiaries. People worry about the message implicit in charity. Does it come with a declaration of dependence, impotence, futility? Do the benefits of charity last beyond the initial contribution? Are the benefits sustainable?

An interesting story is of a group of school children in Uganda who decide to raise money for a mentoring program in Portland, Oregon. Ironically, the group is Oregon replies,  "I don't know if we can take money from you guys," thus driving home the asymmetry and implications of accepting charity...something we in the United States rarely consider when we write checks for African children.

The authors, advocates of philanthropy, attempt to answer all these quandaries and more. They seek to encourage more people to be come involved. Anyone who has a new interest in making the world a better place through better education, medical assistance, nutrition, and parenting will enjoy from the broad discussions of philanthropy around the globe (with an emphasis in the United States).

However, if these are topics that the reader has had a continuing interest, much of the book will be repetitive. It appears there are only a small number of success stories and analytical insights. I found that more than half the book reiterated specifics I had seen and heard previously.

While the use of anecdotes and success/horror stories can lead people to support ineffective aid groups, data also has some pitfalls.

Consider how mutual funds are marketed. A mutual fund group creates dozens of mutual funds and says little about them for five or ten years. After this respectable wait, the very best are selected and advertised with their impressive five- and ten-year returns. In the same way, out of those 1.4 million aid groups, some have to accrue impressive results. But as they say with mutual funds, "Past performance is not necessarily indicative of future results."

A second issue is the confusion between correlation and causation. Consider the currently popular "thirty-million word gap." The observation is that lower socioeconomic status (SES) families spoke less to their children than higher SES families. By the age of four, the children have experienced the "thirty-million word gap." This observation is a correlation.

The interesting conclusion, now supported by many government programs, is that talking to children will remove the gap in life-long success they experience as a result of their lower SES life. Not surprisingly, other researchers ascribe the cause to be nutrition, early education, stress, missing parents, toxic parents, etc.

This demonstrates how difficult it is to apply analysis to aid groups. In the end, the data is just another type of anecdote and story.

Poverty and charity might be two of the most complex issues in the world today.  Kristog and WuDunn deserve much credit for not getting discouraged and for doing one of the best jobs in attempting to point a way forward: A Path Appears.

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