Let Irish citizens choose where to send foreign aid?

A couple weeks ago the Nudge blog proposed letting Americans direct a tiny portion of their tax dollars to social programs of their choosing in an effort to strengthen their connection to government. Last Sunday, Gerard O’Neill proposed letting Irish citizens decide how to spend the country’s €914 million Irish Aid budget.

In the case of Irish Aid, I see it working like this: at the start of the year each registered voter is given a voucher worth their part of the total Irish Aid budget — about €286 each, given a population of 3.2m aged over 18. Each citizen can “spend” their voucher during the year, by giving it to any one of the Irish NGOs registered with Dochas. The charities can advertise their activities in developing countries (as they already do) in order to attract voucher donations. Citizens should also be able to elect to pay their voucher directly by standing order to a charity of their choice, giving the charities some sense of continuous funding…

I would suggest that Irish charities champion my proposal — or something similar — themselves, because if they don’t, they face the possibility of experiencing the “crowding out” effect. Recent research shows that for every $1,000 that charities receive from government, private donations fall by $560. This is mainly because charities invest less effort in fundraising, and also because private donors see the state funding and figure their own donations won’t make enough difference.

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  • Tristan

    This is the stupidist idea I have heard on nudge – I assume that the authors actually think it’s stupid aswell. The idea that individuals will actually be able to make informed choices about where their aid goes (especially on the global level) is ridiculous.

    Charities and NGOs will pump money into marketing – wasted money that could be spent on feeding the homeless etc. I’m all for running aid like a business in terms of service delivery – but how is little old Paddy from Dublin supposed to decide if his aid dollar are better spent on disaster relief in Asia, war criminals in Europe or feeding the local homeless?

    Isn’t the whole idea of nudge that experts positon the decisions of lay-persons? There is no nudge in this idea. Sure, maybe you are making the point there is a middle ground but this proposal is way to neo-classical for me…