An article by New York Times columnist Nick Kristof has fueled a debate on the poor’s “shortsighted private spending.”
In his article, Kristof writes: “There’s an ugly secret of global poverty, one rarely acknowledged by aid groups or U.N. reports. It’s a blunt truth that is politically incorrect, heartbreaking, frustrating and ubiquitous.”
He cites a study by two M.I.T. economists, Abhijit Banerjee and Esther Duflo, in his column.
“It’s that if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children’s prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households,” the article reads.
Amanda Taub disagrees. Referring to the same data Kristof provided, she notes that low education spending in poor communities is “at least partly a good sign, because it’s the result of free or heavily-subsidized primary education.”
Taub goes on to argue that cell phone credit may be a luxury in the developed world, where there is a myriad of other forms of communication.
“But without knowing why the people he interviewed spend that much on credit each month, I can’t begin to speculate about whether it should be considered a luxury, a necessity, or somewhere in between,” Taub wrote in the Wronging Rights blog. “[H]ow is it acceptable to insist that poor people sacrifice the few small pleasures within their reach in order to comply with a random American journalist’s view of what is Really Important? That kind of supercilious morality seems to me to be a particularly judgmental form of cruelty. Color me unimpressed.”
While labelling all impoverished African men as drunkard dads who squander their families’ resources, it is also equally important to consider that “poor people could behave in counterproductive and irrational ways…just like rich people do,” according to William Easterly and Laura Freschi.
Poor people spending on recreation, according to Easterly and Freschi, is not really the catch.
“The larger issue is explaining the seeming irrationality of, for example, Mr. Obamza’s [the father of the child Kristof mentioned in his article] decision to spend his evenings in a bar while his children sleep without a mosquito net. Could it be that outsiders make simplistic assumptions about the perceived value of bed nets to people like Mr. Obamza,” the authors wrote in an Aid Watch blog.
The efficiency of aid interventions is very much reliant on understanding the behavior of the poor, according to the authors.