Charity vs. Development

On virtually every page of the Bible or Catechism is the injunction to care for the poor. There isn’t much, however, on the best way to do that. Theologians likely would chalk up such policy discussions to the realm of prudential judgment. Given that, then, it seems natural to ask what policies or programs have done the best job of lifting the poor out of poverty.

Many well-meaning Christians appear to confuse the concepts of charity and economic development, presuming that enough of the former will lead to the latter. It’s a classic fallacy of composition which omits the importance of institutions such as private property rights, sound money, reasonably low taxation, rule of law, and relatively free markets. We have plenty of examples of poor countries both with and without such institutions who have charted widely different paths, the former to prosperity and the latter to stagnation. Ironically, the countries with good institutions have tended to rely very little on foreign or charitable aid and have still grown impressively, while the countries with bad institutions have been black holes of tons of foreign aid and charitable dollars without much to show for it.

Nina Munk was interviewed on the always-interesting EconTalk podcast about her recent book on Jeffrey Sachs and his Millenium Villages Project. The Project appears to be a classic example of charity-minded aid, where dollars are collected and initially distributed with much fanfare, without much thought as to future sustainability (the discussion of the high-yield corn is very instructive). The podcast is well-worth the hour’s listening for anyone concerned about the best ways to serve the poor (and not just the poor in other parts of the world; the policy implications could just as easily be applied to most cities’ programs in the U.S.). Here’s a snippet from the closing:

I think you raise the question of the real arrogance and potential dangers of intervention by well-intentioned but often ignorant or at least naive outsiders. And one of the things that sometimes made my heart stop was realizing that Jeffrey Sachs, for all of his enthusiasm and sometimes rah-rah-ism, would come powering, motoring into a village in his convoy of UN [United Nations] vehicles with bulletproof windows and air conditioning and give these enormously uplifting speeches and make all kinds of promises and set in motion an enormous machinery, so to speak, that then, when the Project began to fail or parts of it began to fail or the staff was no longer there or they stopped showing up–the devastation left behind was incredibly cruel.

My mantra on these pages (and certainly Pope Francis’) is that Catholics need to care for the poor, and should discover those methods that best do that. The answers aren’t hard; economists have known about them for centuries. But it will take breaking out of the charity-equals-development and the capitalism-is-inherently-evil mindsets, two paradigm shifts that Christians don’t seem to be especially inclined to undertake.

16 thoughts on “Charity vs. Development

  1. I have a background in rural economic development. I’m also a Catholic who believes in charity as a willing sharing of my blessings. This article is an excellent conversation starter about how the two concepts can co-exist to sustain effective improvement of the social needs of our time–foreign and domestic. Programs and organizations that receive charitable funding should be thoroughly vetted for their long term viability and commitment to teaching, empowering and growing the next generation’s ability to help themselves. Excellent!

    1. Tim Shaughnessy says:

      Bevin, I’d appreciate your input, given your experience: my hunch is that real economic development cannot be achieved using a “charity only” mindset. Just giving people money or building wells doesn’t fix the problems of poorly enforced property rights, political or legal corruption, cronyism, monetary mischief, or even more basic things like cultural attitudes. People certainly should be motivated by a love of the poor, but their solutions need to be based on institutional reforms. Your thoughts?

  2. Danny says:

    The writer voiced an issue that I have wondered about for a while. It reminds me of the teach-a-man-how-to-fish-and-you-will-feed-him-for-a-lifetime lesson. I think the author is right: what is the best method to lift the poor from poverty? Question for thought: does the conventional understanding of charity contain elements of a welfare mentality? I ask because my first thought is, has this person’s situation improved since he/she was given charity? If not, what is the true underlying problem, and how do we fix it? Do the poorest countries need a more free-market, capitalist system and infrastructure to not only raise their citizens out of poverty but also keep them out?

    Last – and here comes left field – if poverty were eradicated, theoretically, what would that mean for charity? Would we still need soup kitchens, homeless shelters, etc.? Just some thoughts that cross my mind…

    1. Tim Shaughnessy says:

      Danny, as to your first point/paragraph, if you haven’t listened to it already I think you’d enjoy the Nina Monk podcast. There are past EconTalk podcasts with Sachs himself and with some of his opponents that you might like as well, all on these issues.

  3. ML says:

    A free market economy where the rich and middle class are encouraged to share according to their means makes the most sense. a system where a powerful few simply distribute the goods more or less equally destroys incentive. Where’s the initiative to produce if what you could expect to gain is redistributed by the elite controllers, who don’t, incidentally, share the values you hold dear anyway?

    1. Aaron says:

      The comment about successful nations having more resources is not supported by the facts. Several examples come to mind the best is probably Israel which has almost no resources but is phenomenally successful. Korea is another great example because South and North have basically the same resources and people but one is very successful and the other is a concentration camp. There are several tiny countries in Europe have limited resources but are also doing great emphasizing things like banking, etc… Venezuela is a good example of a country with a lot of resources (oil is one) but can’t even supply their people with toilet paper. I don’t think its a coincidence that Venezuela has a very invasive government.

      Speaking about Europe, their “redistribution of wealth” has caused almost complete secularism as well as a massive decline of marriage. Another side effect of the “equality” malaise and secularism is that the birth rates in the EU are far below replacement. Europe as we know it will be gone in 2 generations.

  4. John Brubaker says:

    That’s an interesting topic. But speaking of fallacies, let’s talk about the _cum hoc ergo propter hoc_ one: “Ironically, the countries with good institutions have tended to rely very little on foreign or charitable aid and have still grown impressively, while the countries with bad institutions have been black holes of tons of foreign aid and charitable dollars without much to show for it.” There’s a number of reasons for this correlation, if there even is one, that differ from the theory of causation the author asserts. Successful nations simply have more resources, period. Whether it be oil, fertile farm land, other natural resources, etc., it is these nations that are simply more prosperous. Charity won’t sustain development where there’s nothing much to develop…unless it is human capital development, which is something that takes generations to achieve given the cultural inheritability of educational trends and the long-term outlook for this kind of development. True, it is unclear the means by which Jesus advocated we deal with poverty, but there’s no debate as to the desired ends: an egalitarian outcome not just from a rights standpoint, but from a financial standpoint as well. And there’s really no debate as to which kind of model best achieves these means: a market-based model with robust redistribution of wealth. The democratic socialist model. The countries that have adopted this model have the highest social mobility, the highest access to healthcare, the best educational outcomes, and the greatest access to the justice system. So while I agree that “breaking out of the charity-equals-development and the capitalism-is-inherently-evil mindsets” is important, we also have to break out of the “socialism is evil” mindset as well. Accumulation and stratification of capital is the natural result of an unfettered free market focused only on property rights. And capital is both economic and political power as well. So if we focus solely on “private property,” we are implicitly giving the already wealthy the upper hand, but we are also implying that democracy is not important, in that the poor have no political power. If the poor have no means by which to demand what they need from the market, no means to demand the resources they need to develop their human capital, nor the political influence that comes from accumulated wealth to make democracy work for them, than it is private property and free markets that will work against them–not for them.

    1. Christopher says:

      I don’t know what country you live in, but here in America. We pray “Give us our daily bread”. That is to say, Make me able to work & earn it.
      We also will help the downtrodden. We will not help a drunkard to keep drunk. I guess in Europe, they think differently. Please stay there.

    2. Tim Shaughnessy says:

      John, Hong Kong is a counterexample to the “no resources = poverty” belief, which is why I linked to it above. I’m not sure why accumulation of capital is bad; don’t we want people to have retirement accounts? Sure, capital leads to economic power; if I have more money I can buy more stuff. But if capital leads to political power, isn’t that more a political problem of lobbyists than a problem of capitalism per se? I’m completely against cronyism. If politicians couldn’t be bought, your point would be moot; the fact that they can be suggests a moral problem on their part, not an ethical problem on the part of the institution of capitalism. I challenge you to offer proof that socialism, or even democratic socialism, has done more to lift the poor, provide the material wealth to make education affordable, and raise living standards and life expectancies, than free markets.

  5. Mike says:

    The Church, long ago, was successful in equating redistribution of wealth, i.e., socialism, with charity. That notion of “social justice” propaganda needs changed quickly. Charity comes from the free will of the individual, not at the threat of force that governments impose via their prohibitive avenue of redistributive justice-TAXES.

  6. Kathleen Williams says:

    Can you expand on the last paragraph… I see capitalism as creating jobs and a stable sustainable economy. I’ve seen cases where money is loaned to an individual to form a company or program to help build the community/village. Is this good or bad. Please no sarcasm, I believe whole heartily in charity and truly believe development is important to sustainability. I feel there is more I should be doing but I don’t know what. I am not rich or else I’d love to donate big dollars to help. Since I am not I donate my time, talent and treasures to help locally. How do we feed everyone? My heart aches for these babies.

    1. says:

      I like Heifer International. they give livestock to people who are taught how to take care of them and then are required to pass along some of the offspring to others and teach them. Read about the founder and you will be encouraged. The church needs to be smart about helping not enableing. Love your heart!

    2. Tim Shaughnessy says:

      Kathleen, my comment above to Bevin might help clarify somewhat. I think if money was given to start a company or build a village, that would be good but it would be insufficient if other institutional reforms were not also pursued, like strengthening the rule of law, impartial administration of justice and contract enforcement, protecting property rights (like the right of an entrepreneur to a business he/she creates), keeping inflation and taxes in check, not playing favorites with lobbyists or crony capitalism. I believe in charity too; my point I guess is that that charitable dollars will go much farther and will help many more people if economic development first helps to get the institutional environment correct. If you want to do more to help the poor, you can point your friends to videos like this:

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