As Far as Happiness is Concerned, It is Better to Give than to Receive Foreign Aid

This is by William Easterly and Laura Freschi at Aid Watch:

Happier countries give more aid: “the happiness coefficient is positive and statistically significant at the 5% level” and “a one-unit increase in happiness leads to an increase in the donor’s aid to GDP ratio…by 0.132 of a percent.” At the same time, “aid is a significantly positive determinant of a donor’s happiness.” There seems to be a virtuous circle between a 1.31217 standard deviation increase in the joy of giving and the parameterized, rigorously assessed impact on the act of giving.

[However,] donors are remarkably insensitive to the plight of the unhappy: “happiness has no statistically significant impact on the receipt of aid” [and] “aid has no statistically significant influence on happiness.”

Comments (5)

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  1. Devon Herrick says:

    The authors summarize their findings thusly, “… as far as happiness is concerned, it is better to give than to receive…”

    I suspect that being wealthy enough to afford donating aid is a proxy for happiness. At the very least, the altruistic act of giving should increase positive feelings (or reduce the guilt of being blessed). Whereas, being so poor as to be warrant receiving aid is probably a real downer!

  2. Neil H. says:

    This is really funny. Maybe you didn’t mean to cause us all to laugh.

  3. Bruce says:

    I agree with Neil. Apparently, wealthy countries make themselves happy by giving away money, regardless of its effects on the recipients of aid.

  4. Larry C. says:

    The real purpose of foreign aid is not to help anyone other than the giver.

  5. Ken says:

    Easterly has documented extensively that foreign aid does more harm than good. Yet the donor counties keep right on giving. So the logical conclusion must be: Donor countries aren’t giving because they want to help someone; they are giving to satisfy some need of their own.