Tuesday, July 10, 2007

Business Vs Philanthropy

Which is better for the society? Business or Philanthropy? Prof. Robert Barro takes the example of Bill Gates in his study here.

Mr. Gates has pointed out that it's difficult to give away such a large sum of money in a productive way. This isn't exactly true. He could cut a $300 check to everyone in the U.S., or donate the money to the U.S. Treasury with the aim of reducing the national debt. The last method is easier but has different effects on income distribution.

But Mr. Gates's plan is, instead, to use the Bill and Melinda Gates Foundation to reduce world poverty, with an emphasis on advances in health. This is a noble goal. But it will likely just supplement the much larger existing programs of aid and debt relief that have been carried out
for many years by international organizations and governments. These programs have, at best, a checkered record. Although Mr. Gates is probably smarter and more motivated than the typical World Bank bureaucrat, he likely won't do much better.

No comments: