Thursday, March 4, 2010

The Road to Hell is Paved with Unintended Consequences

Even with the best of intentions, there are always unintended consequences.

After the Jan. 12 quake, which killed as many as 300,000 people, the world launched a massive relief effort to bring food, water, medicine and other supplies to needy Haitians. The U.S. alone has spent more than $665 million, official figures show.

But only a tiny fraction of that money is being spent in Haiti, buying goods from local businesses. Worse, the aid is having the unintended consequence of making life harder for many businesses here, because of competition from free goods brought in by relief agencies. The damage to Haitian companies is making it harder for them to get back on their feet and create the jobs the country needs for a lasting recovery. …

“I have fewer customers now because they are handing out free food down the street,” says the 52-year-old [food vendor], pointing to the nearby Champs de Mars plaza where aid organizations regularly hand out food to tens of thousands of people camped there in tents.

Obviously the people of Haiti need help after the devastation of a natural disaster of this scale, and the hundreds of millions of dollars coming into the country are a positive, but how might the lessons learned there apply here in America?

[WSJ via Freakonomics]

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