Friday, July 31, 2015

Buying TOMS shoes is a terrible way to help poor people - Vox

Buying TOMS shoes is a terrible way to help poor people - Vox

TOMS, of course, is an accessory company that markets itself like a charity: When you buy TOMS products, the company makes an in-kind donation to a person in need. When someone buys a pair of TOMS shoes in the US, for instance, the company donates a pair of shoes to a child in a poor country like Haiti.


But the truth is that while that kind of messaging is evidently a great way to sell trendy shoes, or to otherwise raise money, it’s not a very good way to do charity. At best, it’s inefficient: It focuses on programs that waste your hard-earned cash by failing to do the most good per dollar. At worst, it promotes a view of the world's poor as helpless, ineffective people passively waiting for trinkets from shoe-buying Americans. While the shoes themselves probably won't lead to any kind of disaster, that worldview can lead to bad policies and real, serious harm.


On the surface, this idea makes sense. Shoes seem important! They protect your feet and are a basic requirement for participation in a lot of public life. Not having them sure sounds like a big problem. Getting free shoes sure sounds like a great solution.


It might be easy to miss, but there are two really big logical leaps in the story that products like TOMS tell you: that the hardships the poor kids were facing were due to their lack of shoes, and that giving them shoes was therefore the best way to address those problems. Neither of these, unfortunately, is correct.

When TOMS worked with an outside research team to evaluate the impact of its shoe donations, the researchers were unable to find a way in which the shoes had much of a substantive impact on poor kids' lives. The kids liked the shoes, and used them to play outside a little more often. But there was no significant improvement in their school attendance or self-esteem.

In fact, the data suggested that receiving the shoes caused the children to spend a bit less time on homework. (Perhaps because they were too busy playing outside?) It also made the children slightly more likely to feel dependent on outside aid — a learned dependency that can be damaging.


There’s a different approach. Instead of giving shoes, why not give poor people cash? If shoes are really what the recipients need, then they can go ahead and buy them. But if not, their options are wide open: They can put the money toward medicine or a crop loan or school fees. Or they can use it to invest in some kind of income-generating venture, such as livestock or a small business.

If you’re like most people, you’re probably feeling some discomfort with that idea. If you give shoes to a kid, then at least you know the kid has shoes. But if you give money, what’s to stop it from being wasted?

The message of TOMS-style giving is that it’s fine for you to make the decision about what the recipient needs, because you (and by extension, TOMS) are smart and know what’s best. That’s an appealing message, because it carries all kinds of really flattering implications about how clever and responsible you are, and it puts you in control. But research very strongly suggests that in addition to being condescending, it’s a bad way to run an aid program.

Take, for instance, a recent study by Columbia political science professor Chris Blattman. He and his team ran an experiment that gave poor women in northern Uganda cash to start small businesses. One group got cash plus expert advice on starting a business, but a comparison group got cash alone. After a year, both groups were doing better.

Part of the point of the experiment was to see if the benefits of the expert advice outweighed the costs of bringing them on. It did not: Over the period that the study measured, the program would have achieved a greater impact if it had skipped the experts and handed out the extra cash to recipients. Likewise, the charity GiveDirectly has seen very positive — and efficient — results from its programs of directly sending cash.

TOMS hasn’t run a similar study comparing its own programs with cash. But there’s at least some evidence that recipients of TOMS shoes really want money instead: the many anecdotal reports of TOMS turning up in markets in the countries where they’re donated. Those TOMS recipients are turning the shoe-donation program into a cash-donation program on their own — just a really inefficient one, in which the costs of developing and delivering the shoes are essentially wasted.

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