Saturday, March 22, 2008

Welfare Economics.

From The Economist

"It is not every day that an American city takes lessons in bribery from Latin America. But New York City's Opportunity NYC programme, a privately funded scheme that rewards parents and children with cash for doing such things as getting proper health check ups and passing school exams, owes a debt of gratitude south of the border. Britain and other European countries are looking into similar reforms. In doing so, they raise a big question: should people be paid for doing what it is already in their interest?"

Comment: This program is proof positive that money walks and bullshit talks. But it also highlights Milton Friedman’s idea of a voucher system to some extent; Instead of taxpayer funds going to a institution and therefore building on a large bureaucracy to serve individual needs, it is best to grant those that are in need direct funds so that they may be able to choose or in this case give the needy an incentive to do what is ultimately best for them. Obviously, this is not a perfect solution and it has its limitations and it's a different form of voucher incentive that Friedman was fond of but the incentive is good enough to move people to do things that are good for them and ultimately good for society.

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