Vito Prosciutto: Teaching community college math on the road to a PhD.

Wednesday, July 06, 2005

Logical fallacy of the day 

This post from Marginal Revolution bugs me a bit.
If Zambia had converted all the aid it received since 1960 to investment and all of that investment to growth, it would have had a per capita GDP of about $20,000 by the early 1990s.
Yes, and if I had taken all the money that I spent on food for the last 20 years and invested it at just 4% above the inflation rate, that money would be earning me $19,000 per year now.

In short, the statement which Tyler finds so charming ignores the fact that even without mismanagement, the aid money could not just be invested: There were immediate needs to be addressed. Yes, aid money can be better directed, but it's not some pot of money that can just be invested without consideration for anything else. I'm sure a lot of the aid that Zambia received went towards lining the pockets of corrupt government officials, but I have a hard time believing that all of it did. Or that the donors of the aid would have continued to donate if it were invested as proposed rather than at least nominally being put towards relieving immediate human needs.

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