I am not sure the standard economic logic has a really good fit with the market for charity. That is not to say there are not insights to be gained or aspects that can be examined/analyzed well but only that they are incomplete.
I agree with the other two answers but only up to a point.
Markets for charity have the problem of being more complicated than the standard producer-consumer or seller-buyer structure. It’s really a case where the consumer is not buying anything. The side that does all the buying is actually part of the production side. In this regard, I think it might be more relevant to focus on the rationing aspect of money in monetary market settings (basically every setting in the modern world outside direct personal interactions).
So we might consider the donations and the activities around getting those donations as something along the lines of relaxing a production constraint. I do think it might be worth considering when and where that is the binding constraint though. Just consider the recent complaints from those in Wuhan about the local Red Cross poor ability to get resources it has distributed to where they are needed or to even spend the donations they have received (though it’s not clear that not spending is a clear sign they are failing in their job).
A secondary thought here would be just how one might implement any type of real market would be a good parallel to normal monetary markets (retail, wholesale, financial, specific products...) to would allow the standard prices as information approach to work. But I’m not entirely sure we need to do that either.
This is a big part of why I’m more optimistic about direct transfers like GiveDirectly. Standard charities act kind of like socialist economies and run into a lot of the same issues. When they’re operating inside of capitalist economies, they get some advantages through price signals to indicate what products people might want, but they still run into a lot of problems with top-down planning.
Of course, it’s complicated because some charities are plausibly more efficient because they use top-down planning and the planners correctly know that people should be spending their money on vaccines and not whatever else they would have bought for $0.50..
I am not sure the standard economic logic has a really good fit with the market for charity. That is not to say there are not insights to be gained or aspects that can be examined/analyzed well but only that they are incomplete.
I agree with the other two answers but only up to a point.
Markets for charity have the problem of being more complicated than the standard producer-consumer or seller-buyer structure. It’s really a case where the consumer is not buying anything. The side that does all the buying is actually part of the production side. In this regard, I think it might be more relevant to focus on the rationing aspect of money in monetary market settings (basically every setting in the modern world outside direct personal interactions).
So we might consider the donations and the activities around getting those donations as something along the lines of relaxing a production constraint. I do think it might be worth considering when and where that is the binding constraint though. Just consider the recent complaints from those in Wuhan about the local Red Cross poor ability to get resources it has distributed to where they are needed or to even spend the donations they have received (though it’s not clear that not spending is a clear sign they are failing in their job).
A secondary thought here would be just how one might implement any type of real market would be a good parallel to normal monetary markets (retail, wholesale, financial, specific products...) to would allow the standard prices as information approach to work. But I’m not entirely sure we need to do that either.
This is a big part of why I’m more optimistic about direct transfers like GiveDirectly. Standard charities act kind of like socialist economies and run into a lot of the same issues. When they’re operating inside of capitalist economies, they get some advantages through price signals to indicate what products people might want, but they still run into a lot of problems with top-down planning.
Of course, it’s complicated because some charities are plausibly more efficient because they use top-down planning and the planners correctly know that people should be spending their money on vaccines and not whatever else they would have bought for $0.50..