Contributing Writer: Genevieve Goetz | May, 2024
“Give a man a fish and feed him for a day. Teach a man to fish and feed him for a lifetime. There are a lot of assumptions that go into this…it assumes that we are good at teaching people to fish. It assumes that they want to eat fish for a lifetime,” Michael Faye explained while introducing his nonprofit: GiveDirectly. Faye strikes the crucial economic question: Why do efforts designed to help those in need not always live up to their intentions? Exploring existing research on the misusage of insecticide-treated bednets (ITNs) in Africa offers unique insight on how perverse incentives and recipient preferences can complicate charity efforts. To understand this effect, one will explore the issue of perverse incentives as related to ITN misusage, studies conducted on ITN misusage, and how these research findings inform potential solutions.
Using Faye’s anecdote, imagine giving a man medical equipment and unintentionally “feeding him for a lifetime”. While this scenario may seem absurd, many Africans are feeding themselves with medical donations. Charitable organizations buy and distribute insecticide-treated bednets with hopes of reducing Malaria outbreaks. To the surprise of these charities, recipients overwhelmingly opt to use their nets for fishing instead of malaria prevention (Shah 2010). ITN distribution offers an example of perverse incentives: an incentive with unintended and undesirable consequences contrary to the intention of its design. While using nets to keep fish in and not keep mosquitos out is surely unintended, it is also undesirable because of its effect on marine life. Their insecticide treatment and impermeability poses a threat to African fish populations (Gettleman 2015). This harm instigated researchers to find a solution to bednet misusage.
Economists turned to behavioral economics to dissect the role of incentives in bed-net usage. According to psychological sunk cost theory, charging a small positive fee for a good or service can incentivize individuals to more effectively use that good. If consumers receive a good for free, they may value it at $0. Charging a small positive fee could increase that consumer’s value of that good as they have already invested, or “sunk costs,” in it (Thaler 1980). In this case, a small positive fee on bed nets may pressure buyers to feel that, since they spent money on the nets, they should use them as intended.
Economists relied on this logic to study if the free distribution of nets is the culprit of their misuse. Three separate studies in Africa (of Zambia, Kenya, or Madagascar) tested the impact of sunk costs by charging a positive price on bed nets, following the resulting demand for and usage of ITNS, and comparing these results with a control group. All three experiments found the opposite of a sunk-cost effect, in fact, price negatively affected demand for and usage of ITNs (Ashraf et al. 2010, Cohen 2008, Comfort 2017). This outcome begs the question: if price cannot correct perverse incentives, what can?
While the aforementioned studies do not offer a clear policy prescription, their findings helpfully allow economists to eliminate sunk-cost efforts to focus energy on other solutions. Specifically, economists could prioritize recipients’ cultural and need-based preferences in order to understand what incentivizes them to misuse the donations from a behavioral perspective. Doing so reveals the strength of hunger as an incentivizing drive. Since so many recipients preferred fishing net usage over bed net usage, one can reasonably assume that the utility of fishing outweighed the utility of malaria protection for these individuals. In essence, African recipients clearly preferred eating over malaria-prevention. Psychology provides a possible explanation of this phenomenon via Maslow’s Hierarchy of Needs, which states that food needs should be fulfilled before safety needs (Maslow 1943). In this case, starvation posed a more serious threat to recipients than malaria: “‘I know [using bed nets to fish] is not right, but without these nets, we wouldn’t eat,’” said Zambian Mwewe Ndefi (Gettleman 2015).
This new perspective suggests two potential solutions, the first being to donate goods that relieve hunger and malaria separately. For example, charities could distribute fishing nets and/or indoor residual sprays (Comfort 2017). Since recipients prefer hunger alleviation above malaria prevention, fishing nets offer crucial aid without threatening marine life. As charities aimed to target malaria, indoor residual sprays reduce malaria spread in a form that is difficult to misuse.
Another solution that especially emphasizes recipients’ hyperpersonal preferences and needs could be cash transfers. Cash transfer programs such as Progresa (Mexico) or Bolsa Familia (Brazil) have gained political traction recently. Michael Faye’s aforementioned GiveDirectly is a cash transfer program that received millions of USD in funding support from Google. The economic theory behind such programs lies in the idea that cash transfers promote efficiency and utility maximization by allowing recipients to delegate their own aid. Returning to the case study, for example, recipients would receive cash with which they could choose to buy standard fishing nets and/or ITNs. Recipients would no longer need to use ITNs in a manner that harms marine ecosystems.
Overall, the widespread misuse of ITNs as fishing nets in Zambia, Kenya, and Madagascar offers a lens through which to understand how efforts to help others can result in both unintended and undesirable consequences. This exploration illustrated how considering recipient preferences helps reveal underlying incentives, like hunger, that complicate policy outcomes. Returning to Faye’s quotation, instead of teaching a man in need to fish and “feeding him for a lifetime,” we should empower that man “to come up with [his] own solutions, and then help figure out how to implement them” (Shah 2010).
REFERENCE
Ashraf, Nava, et al. “Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia.” The American Economic Review, vol. 100, no. 5, 2010, pp. 2383–413. JSTOR, http://www.jstor.org/stable/41038767.
Cohen , Jessica, and Pascaline Dupas. “Free Distribution or Cost-Sharing? Evidence from a Malaria Prevention Experiment.” National Bureau of Economic Research, Oct. 2008.
Comfort, Alison and Paul J Krezanoski, “The effect of price on demand for and use of bednets: evidence from a randomized experiment in Madagascar.” Health Policy and Planning, Volume 32, Issue 2, March 2017, Pages 178–193, https://doi.org/10.1093/heapol/czw108
Gettleman, Jeffrey. “Meant to Keep Malaria Out, Mosquito Nets Are Used to Haul Fish In.” The New York Times, 24 Jan. 2015.
Maslow, A. H. (1943). A Theory of Human Motivation. Psychological Review, 50(4), 370–396. https://doi.org/10.1037/h0054346
Shah, Sonia. “In Africa, Anti-Malaria Mosquito Nets Go Unused by Recipients.” Los Angeles Times , 2 May 2010.
Solomon, Phyllis, Mary M. Cavanaugh, and Jeffrey Draine, ‘Ethical Considerations of Randomized Controlled Trials’, Randomized Controlled Trials: Design and Implementation for Community-Based Psychosocial Interventions, Pocket Guides to Social Work Research Methods (New York, 2009), https://doi.org/10.1093/acprof:oso/9780195333190.003.0002
Thaler, Richard. 1980. “Toward a Positive Theory of Consumer Choice.” Journal of Economic Behavior & Organization, 1(1): 39-60