The Marginal Utility of Income Transfers to the Third World
If the poor will be with us always, how poor must they be? Should we abandon hope of any significant improvement in living conditions for the hundreds of millions of terribly poor people in this world, and, instead, by some desperate notion of “triage,” concentrate our limited resources on trying to help those who, while still poor, nevertheless start from something a little better than the bare subsistence level of India, Bangladesh, or poorest Africa? Such questions raise innumerable further questions about morality, about the sources of global poverty, and about the organizational capacity of poor countries ever to cope with their problems. But they also raise some serious empirical questions about what improvement in living standards we can hope for when a minority of people, however rich, give up part of their income or wealth to try to help very much larger numbers of poor people. Recall such old antisocialist arguments in the United States that even if the richest 5 percent of the people were to give up half their income to the poor, that would only be enough to bring the poorest half of the population just one-third of the way toward the average income level for the country. In short, why should so few give up so much to help so many so little?
KeywordsLife Expectancy Infant Mortality Poor Country Marginal Utility Rich Country
Unable to display preview. Download preview PDF.
- 1.See, e.g., Harold Lasswell and Abraham Kaplan, Power and Society: A Framework for Inquiry (New Haven, CT: Yale University Press, 1950)Google Scholar
- Abraham Maslow, Toward a Psychology of Being (Princeton, NJ: Van Nostrand, 1968, 2nd edition).Google Scholar
- 12.John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), 114.Google Scholar
- 14.Jan Tinbergen, Coordinator, Reshaping the International Order: A Report to the Club of Rome (New York: E. P. Dutton, 1976), 130.Google Scholar
- 19.Arthur Okun, Equality and Efficiency: The Big Tradeoff (Washington, DC: Brookings Institution, 1975).Google Scholar