Category: Effective Compassion

The Goldwater Institute has released a new study showing that states with a larger share of entrepreneurs do a better job at reducing poverty than states with fewer entrepreneurs.

There is a strong connection between a state’s rate of entrepreneurship and declines in poverty. Statistical analysis of all 50 states indicates that states with a larger share of entrepreneurs had bigger declines in poverty. In fact, comparing states during the last economic boom—from 2001 to 2007—data show that for every 1 percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent decline in the poverty rate.

To help reduce poverty, policymakers should focus on increasing the number of entrepreneurs in their state. Research shows that one of the most effective ways to increase entrepreneurship is by lowering tax burdens. In particular, this study shows that high tax burdens, measured as a percentage of personal income, drags down the growth rate of entrepreneurship in a state: for every 1 percentage point increase in the tax burden, there’s a corresponding 1 percentage point drop in the entrepreneurship rate. States without income taxes also have higher average rates of entrepreneurship than those with income taxes. The average number of sole proprietors as a percentage of employment in states without an income tax is 21.7. The rate for states with an income tax is 19.6.

You can access a PDF of the report here.

Blog author: dpahman
posted by on Monday, October 22, 2012

Recently at Big Questions Online, Barbara Dafoe Whitehead answers the question, “Does a culture of thrift cultivate generosity?” with a solid yes, documenting the history of thrift and generosity in the United States and their subsequent and unfortunate decline in recent years:

By the 1960s, however, the coalition of national organizations promoting thrift ceased their activities. Schools gave up their savings programs. And American households increasingly turned to consumer debt rather than savings to finance their wants and needs. The savings rate, which stood in double digits as late as the early 1980s, fell to near zero in 2005 and has since rebounded to a still anemic 4.4 percent.

As a consequence, thrift has lost much of its cultural force. Few schoolchildren today have even heard the word, much less are able to say what it means. A teacher of my acquaintance reports that her students, rich, poor and in-between, customarily throw their loose change into the trash along with their lunch leftovers. Apparently, they are clueless as to the value of their nickels and dimes when their customary medium of exchange is the “swipe” card.

Read more . . .

Blog author: dpahman
posted by on Friday, September 14, 2012

Working Paper: “Top Ten Myths of Medicare”
Richard L. Kaplan (University of Illinois College of Law), Illinois Program in Law, Behavior and Social Science Paper No. LBSS13-02; Illinois Public Law Research Paper No. 11-28; SSRN, Working Paper Series (PDF)

In the context of changing demographics, the increasing cost of health care services, and continuing federal budgetary pressures, Medicare has become one of the most controversial federal programs. To facilitate an informed debate about the future of this important public initiative, this article examines and debunks the following ten myths surrounding Medicare: (1) there is one Medicare program, (2) Medicare is going bankrupt, (3) Medicare is government health care, (4) Medicare covers all medical cost for its beneficiaries, (5) Medicare pays for long-term care expenses, (6) the program is immune to budgetary reduction, (7) it wastes much of its money on futile care, (8) Medicare is less efficient than private health insurance, (9) Medicare is not means-tested, and (10) increased longevity will sink Medicare.

Conference: “How to Feed Nine Billion People from the Ground Up”
Quivira Coalition, November 14-16th, Albuquerque, New Mexico

Global human population is projected to reach nine billion by 2050, which means food production will need to expand by 70% to keep up. Fulfilling this demand will place unprecedented pressure on ecosystems, including the planet’s grasslands, especially as competition grows for scarce natural resources. How to meet this daunting challenge while ensuring the health of land, water, wildlife and people will be one of the great tasks of the 21st century. In this conference, we will explore a variety of innovative practices that are already successfully intensifying food production while preserving, maintaining, and restoring the natural world. Speakers will share their hands-on experience and ideas for feeding all life – from the ground up.

Working Paper: “The Economics of Religious Altruism: The Role of Religious Experience”
Timothy T. Brown (University of California, Berkeley), ARDA/ASREC Working Papers Series (PDF)

Altruism has many motivations, including religious motivations. Perceived religious experience plays a strong role in the life of many religious individuals in the U.S. and can be a strong motivator of altruistic behavior. Religious altruistic behavior can be described by an economic theory of religious/spiritual health. Empirical tests using a theoretically and statistically valid set of instrumental variables show a strong causal link between perceived religious experience and the frequency of altruistic acts. An additional weekly event during which an individual perceives feelings of love that they believe come directly from God results in individuals increasing their altruistic acts by an average of 4.7% over a one-year period.

Call for Papers: “Ethics, Society, and Cultural Analysis”
Southwest Commission on Religious Studies, AAR session

Proposals for papers and panels are invited on the following topics in Ethics, Society, and Cultural Analysis: Pedagogy and Ethics, History and Ethics, Christian Social Ethics, and Moral Theology. Also of interest are reflections about comparative theological and ethical discourse featuring reflections on Jewish Ethics, Islamic Ethical Perspectives, Indigenous Religious Moral Perspectives, Buddhist ethics and Christian ethics. Constructive treatments of ethical issues including immigration, transnationalism, bioethics, global economics and poverty, health care, food and hunger, environmental ethics, ecofeminism, ecowomanism, medical ethics, theological ethics, sexual ethics, and the use of Scripture or tradition in ethics are also invited. Proposals may also discuss Womanist ethics, Mujerista theological ethics, Latina/o ethics, Native and Indigenous religious ethical perspectives, LGBTIQ ethics, and Feminist ethics.

July 31st marks the 100th birthday of the economist Milton Friedman. Celebrations planned by proponents of free-markets will take place across the country to recognize and pay tribute to his legacy and the power of his ideas. I am speaking at an Americans for Prosperity event in town on the topic of school choice on his birthday.

My commentary this week is on school choice. Nobody has influenced and shaped the school choice movement more than Friedman. In my piece, I stressed the moral power of pivoting away from bureaucratic centralized schooling and encourage greater parental involvement in education. Simply put, school choice allows for parents to better shape the spiritual formation of their children. Nobody can make better decisions about the education of their children than the parents.

Finally, schools that have to compete for students and tax dollars will be forced to improve and be innovative for today’s complex and global marketplace.

Last week, PowerBlogger Andrew Knot and I wrote posts about American sugar policy and farm subsidies, respectively. Now, the United States Conference of Catholic Bishops, as well as the Catholic Relief Services and National Catholic Rural Life Conference, have come out with a joint letter on the 2012 farm bill that just passed the Senate. Among other things, they urge Congress to reduce agricultural subsidies, and limiting crop insurance to small and medium sized farms.

In 2010, the government gave out $96 billion in farm subsidies. As I pointed out last week, the median farmer’s income is already 25 percent higher than the median American’s. Furthermore, most of the farm money is going to a small number of the farmers. Big farms tend to get a much larger share of the handout than small and medium sized farms do. American agricultural policies represent welfare and protectionism for the already well off.

The USCCB’s letter can be read here.

At the most recent Acton University, American Enterprise Institute president Arthur Brooks gave a brilliant and paradigm-shifting speech on why advocates of free enterprise need to explain why it is the most moral, most fair, and most helpful system for alleviating poverty. You can download it here. (It’ll be the best 49 cents you spend this week.)

I was thrilled to discover today that AEI has created an animated video that covers much the same material as in his lecture. Watch the whole thing. (It’ll be the best 8 minutes you spend this week.)

One of the real challenges in arguing for various social policies is getting reliable data about the effectiveness of government programs. This is particularly the case with regard to welfare spending. It’s often very difficult to measure a particular program’s effectiveness, however. But this is an essential task, as Jennifer Marshall writes:

The measure of our compassion for the poor should not be how much we spend on federal antipoverty programs. Compassion must be effective.

We ought to define success by how many escape dependence on welfare to pursue their full potential as human beings. To measure our commitment to the poor by the number of dollars spent on antipoverty programs is to diminish human dignity.

Researchers in the UK have written a report arguing for an approach to public policy that integrates “randomized controlled trials” (RCTs) into attempts to measure the impacts, intended and otherwise, of government programs. In “Test, Learn, Adapt: Developing Public Policy with Randomised Controlled Trials,” (HT: Hacker News) the authors argue that RCTs are used widely in the private sector, but at least in the UK they “are not routinely used to test the effectiveness of public policy interventions.”

They go on to explain why RCTs are particularly helpful in determining the effectiveness of a particular program:

What makes RCTs different from other types of evaluation is the introduction of a randomly assigned control group, which enables you to compare the effectiveness of a new intervention against what would have happened if you had changed nothing.

The introduction of a control group eliminates a whole host of biases that normally complicate the evaluation process – for example, if you introduce a new “back to work” scheme, how will you know whether those receiving the extra support might not have found a job anyway?

Check out the whole report which provides details on the nine suggested steps for implementation (PDF).

The Office of Management and Budget’s (OMB) 2012 draft report to Congress on costs and benefits of federal regulations states that “agencies should carefully consider how best to obtain good data about the likely effects of regulation; experimentation, including randomized controlled trials, can complement and inform prospective analysis, and perhaps reduce the need for retrospective analysis.”

This last point is somewhat dubious, for as the title of the UK report indicates, the process of evaluating the effectiveness of public policy interventions is ongoing: Test, learn, adapt, repeat! The ninth step is actually to “return to Step 1 to continually improve your understanding of what works.” But in any case it might well be that RCBs are going to be one tool increasingly relied upon to provide some helpful insight into what works and what doesn’t.

From Reason.com’s blog comes this story about the company Capital Bikeshare, a business which rents bikes to people throughout the D.C. metropolitan area. Sounds like a cool idea, but why is it getting taxpayer support?

Capital Bikeshare, which rents bikes at more than 165 outdoor stations in the Washington D.C. area, serves highly educated and affluent whites.There’s nothing wrong with that, of course, except that the program has received $16 million in government subsidies, including over $1 million specifically earmarked to “address the unique transportation challenges faced by welfare recipients and low-income persons seeking to obtain and maintain employment.”

Well, helping the poor sounds nice. I bet it’s really helped them out, let’s see if that’s the case.

Capital Bikeshare’s latest user survey finds that 95 percent of its regular patrons have college degrees, 53 percent have a Masters or Ph.D., and 80 percent are white. Fully 0 percent have only a high school diploma and just 7 percent make less than $25,000 a year. More than 90 percent were employed and 14 percent reported they were college students, suggesting that very few welfare recipients are using the service.

Well, at least legislators can feel good I guess, even if they haven’t really done any good. This episode points out that government efforts are often poorly targeted in their attempts to help the poor. There’s nothing wrong with running a bike service, but the rationale that such enterprises should receive tax payer support because they help the poor is wrong. This applies to many topics in attempted government aid, many government policies that are ostensibly meant to help the poor are actually very poorly targeted. As Ismael Hernandez said last week during a lecture given at Acton University, we must use not just our hearts and our muscles, but also our minds.

A lecture from Ismael Hernandez on “Subsidiarity and Helping the Poor” and other lectures from Acton University can be found here.

Blog author: jcarter
posted by on Tuesday, May 22, 2012

Nowhere in his article for The Atlantic does Joshua Foust use the “s” word.  But it’s obvious from the examples he mentions that the key to providing aid to Pakistan is applying the principle of subsidiarity:

. . . the most interesting project RSPN has done in rural Pakistan is a collaborative micro-healthcare insurance system. For very little money — $3.50 a year in some cases — poor people can get access to basic medical care (especially maternity care) and assistance if they face hospitalization.

A hyper-local focus on poor, isolated communities has created an unexpected way to provide previously unfathomable sorts of services to the poor at very low cost. The RSPN affiliates who provide microinsurance reach almost a million people, and at very little cost, by employing local community members for expertise, services, and administration.

This structure applies to much of what RSPN does: local projects, run by locals. It is a sharp contrast to even the ostensibly locally focused aid projects administered by U.S. and European NGOs and aid agencies, which focus on establishing a strong presence in capital cities and rely on expensive expatriate administrators. RSPN’s local focus carries significant spillover effects in its communities as well: providing opportunities and improving the quality of life makes those communities significantly better off as a consequence. The “brain drain” of young people leaving to find opportunity elsewhere is diminished, and with better health and finances they can develop themselves, without the distorting effect of foreign money.

Read more . . .

Blog author: jballor
posted by on Thursday, May 10, 2012

In a paper at the symposium I noted in yesterday’s post, Richard Helmholtz described the application of natural law in a particular case in which the judges observed that “charity begins at home,” since “it is a natural impulse to do good to one’s own family.”

Because of the wonders of digital publishing and public libraries, I was able to borrow an ebook version of Winter’s Bone from my local library. As I noted yesterday, there’s a scene in the film that powerfully evokes a recognition of natural moral obligations, in this case to one’s neighbor.

In the book version, however, this scene is even more prominent, as it concludes the very first chapter (in the book, Ree’s brother is named Harold):

She heard the door behind her squeak and Harold, age eight, dark and slight, stood in pale long johns, holding the knob, fidgeting from foot to foot. He raised his chin, gestured toward the meat trees across the creek.

“Maybe tonight Blond Milton’ll bring us by one to eat.”

“That could be.”

“Don’t kin ought to?”

“That’s what is always said.”

“Could be we should ask.”

She looked at Harold, with his easy smile, black hair riffling in the wind, then snatched his nearest ear and twisted until his jaw fell loose and he raised his hand to swat at hers. She twisted until he bore up under the pain and stopped swatting.

Never. Never ask for what ought to be offered.”

In this account from the book the relation between Ree’s family and her neighbors is more obviously that of “kin,” although even in the film this seems to be the kind of region where nearly everyone is related in one way or another.

Indeed, claims on the moral obligations of “kin” are a foundational theme on the development of the rest of the story’s plot. The audience takes the journey with Ree, discovering just what is expected of kin and what might be actually delivered in this concrete situation.

Whatever Ree gets, however, doesn’t come easy. In the book she’s sixteen years old with “a body made for loping after needs.”