"Africa is, indeed, coming into fashion." - Horace Walpole (1774)

2.16.2011

why t-shirts are bad aid: the research

As the World Vision/NFL 100,000 t-shirts controversy swells on (now with a post on Freakonomics!) , I thought it might be useful to talk about the research that shows why t-shirts is a matter of bad aid. If your eyes glaze over at the thought of JSTOR and academic journals, I can sum it up for you in one sentence: the evidence is solid that t-shirt donations are bad for local economies.

For those of you wanting to go a little more in depth, read on.

One of the best known and most-referenced articles on the subject is "Used-clothing Donations and Apparel Production in Africa" by Garth Frazer. There's a gated version of the article here. Frazer set out to explain why African economies haven't advanced beyond basic manufacturing. He concludes that one major factor prohibiting the development of major textile industries is used-clothing donations by consumers in industrialized countries. That is, if you box up your old t-shirts and take them to Goodwill, you may actually be inadvertently undermining the development of clothing production facilities in Africa. Why? Because with a huge supply of cheap apparel that is ready for sale, there's no need to build factories to produce more. These are not insignificant effects; Frazer finds that "Used-clothing imports are found to have a negative impact on apparel production inAfrica, explaining roughly 40% of the decline in production and 50% of the decline in employment over the period 1981–2000." In other words, clothing imports result in job loss for people who could probably otherwise lift themselves out of poverty.

Frazer is dealing with used clothing, of course, but there's little reason to think that new clothing would be any different, especially since World Vision will be distributing it for free. In fact, free clothing donations undermine the secondhand clothing markets that provide what employment does exist in the sector.

Daniel Slesnik tackles the problem of in-kind goods more generally in "Consumption and Poverty: How Effective are In-Kind Transfers?" (also gated). Slesnik does not study the developing world here, but rather looks at programs designed to tackle poverty in industrialized states. He finds that, in order to be effective at poverty alleviation, in-kind transfers have to be highly targeted and the valuation recipients place on the transfers. In other words, the recipients have to be getting appropriate aid that actually solves their problems, and they have to place as much or more value on the in-kind transfer as they would on cold hard cash.

How is this relevant for World Vision? Well, it suggests that any kind of in-kind donation that is not highly targeted and valued by recipients is a waste of effort, money, and resources. As Bill Westerly points out, this gets pretty messy when we take into account the cost of actually getting the shirts to the recipients. If $A isn't less than $B, then it's a big mistake.

These are just a couple of examples of the body of research that clearly shows the negative impact of clothing donations on developing economies. There's just no way World Vision can honestly claim that these facts are unknown or that the impact of a clothing donation is unclear.

(If you're really interested in this topic, I'd also recommend writing to Loomnie and begging him to let you read his excellent dissertation on the secondhand clothing trade in Nigeria. If you have other suggestions for research on the topic, please note them in the comments.)

19 Comments:

Blogger Rena said...

This is a bit off topic, but I am wondering if anyone has suggestions for the best thing to do with used clothing. I usually donate to Goodwill, simply because I don't like the thought of my old clothes filling a landfill somewhere. But I don't want them contributing to economic problems somewhere around the world either! Any ideas?

Wednesday, February 16, 2011 1:16:00 PM

 
Anonymous Anonymous said...

Thanks for bringing some research into the debate - I was a bit confused when the Freakonomics article said there were no studies comparing GIK to selling goods and donating the money when its not too difficult to put the existing research together with some commonsense as you have done here.

However, I think your naming of Goodwill as an organization who practices GIK may be misguided, from what I know they don't move the donations out of the country they originate in, which I think is mainly US and Canada. Furthermore, from their website it seems the majority of this clothing is sold in retail stores and online rather than given away to support job creation and training. Then again, I don't work for them and don't know every aspect of what they do.

Wednesday, February 16, 2011 1:27:00 PM

 
Anonymous TMS Ruge said...

Rena,
for the most part (at least in my opinion as a Ugandan), if your clothes can't be responsibly discarded through Goodwill, then a landfill is the next best thing. Most clothes bio-degrade so they wouldn't be in the landfill for long, as compared to other trash.

You could always ask Goodwill for their policy on donated goods and where they end up before you donate your goods.

Clothes aren't the only "gifts" dumped on Africa. Used (read: obsolete) computers are dumped on the continent in large numbers in the name of charity. But the real truth is that it is cheaper to dump them there than to responsibly recycle or destroy them.

Wednesday, February 16, 2011 2:16:00 PM

 
Blogger texasinafrica said...

Anon, actually, Goodwill does sell most of what it can't sell in its stores to salvage brokers who then sell it abroad. The Salvation Army does the same thing. So, no, they aren't technically dumping those clothes abroad, but they are sold to salvage brokers in full knowledge of what will happen to the clothes. Some Goodwills also throw away excess clothing, especially stuff that is so worn as to be unusable by anyone.

Rena, I give to Goodwill because I like supporting work in my own town and they employ people in my community who otherwise would have a very difficult time finding work. But I only give them items that I know are likely to sell here: things that are in good condition and in style. For items that are falling apart and can't be used as dishrags or whatever, I thrown them away.

Wednesday, February 16, 2011 2:37:00 PM

 
Blogger Chris Waluk said...

I agree with the spirit of your post, but not the economics. Yes, it's obvious that used clothing has ruined apparel production in Africa, but shouldn't the cheap import of clothing bring savings to the consumers that can be spent on other items? It's not like the shirts are somehow taking money or products out of the local economy. Someone who saves money on clothing will be more inclined to buy a phone, a bike, or a beer; all purchases that contribute to economic growth.

I'm not trying to advocate for GIK, but I just don't think you can draw the conclusion that used clothes destroy local economies based on their negative effects on local clothing markets alone. Yes, by giving a shirt to Goodwill you may be inadvertently causing a textile mill in Tanzania to shut down, but couldn't that same donation be inadvertently stimulating an African cell phone company at the same time?

An issue largely ignored in this discussion is, what should the nfl do with 100,000 useless t-shirts? Perhaps the only way to prevent shirts from going where you don't want them to go, is to come up with a better way to use them.

Kudos for casually referencing Bill Westerly in your post. I have neither the substance nor the courage to question his wisdom.

Wednesday, February 16, 2011 3:18:00 PM

 
Blogger Jacob A. Geller said...

In general I don't like the idea of clothing-as-aid, but personally I find the clothing-as-aid-puts-poor-textile-workers-out-of-business argument unconvincing. It sounds like protectionism. Common sense dictates that free clothing is a good thing; sure, it puts textile manufacturers out of business, but that frees up labor that can now be put to work producing something else, in which case the recipient country now has clothing (same as before) plus whatever those former textile manufacturers are now producing (a net gain). What would make the argument compelling is if you took into account the transient, occasional nature of clothing donations. When clothing isn't being donated, it makes sense for poor workers to manufacture textiles. But when clothing IS donated, it comes suddenly and unpredicfsbly, which amounts to a supply shock that disrupts the market in a very serious way. Then you suddenly have workers and investments in all the wrong places. It's the unpredictability and suddenness of the clothing donations that produce inefficiency, malinvestment, and deadweight loss for developing countries. The rest of the arguments I find conving as they are, but the first one needs this qualification.

Wednesday, February 16, 2011 3:21:00 PM

 
Blogger Jacob A. Geller said...

Oh and I'll also add that the donated-clothing-as-supply-shock story I told above is a very good approximation of what's wrong with U.S. Food aid to Haiti. We periodically dump American food (especially wheat) onto the Haitian market, which collapses the price of food in Haiti and discourages investment in agriculture, which in about a year or so results (ironically) in hunger. When food prices do rise again and Haitian farmers have the incentive to invest in growing food, their investments at some point come to nothing because the U.S. dumps more food into Haiti again. These supply shocks can be very disruptive, and their frequency and unpredictability have been very damaging to Haiti's economy for decades. There's a great report from Partners in Health called "Sack Vin Pa Kanpe" or something like that, which discusses this in greater detail. I'm writing this on my iPhone so I don't have the patience to go find a link, but I'll find it later tonight when I get back to my computer.

Wednesday, February 16, 2011 3:31:00 PM

 
Anonymous Mike said...

It is true that free (or more likely used-clothing sales) had a big role in destroying the African apparel industry (as did the over-reliance on exports only to get killed by the MFA expiring and the rise of china like everyone else). But regardless of what destroyed the African apparel industry, it is hard to argue in 2011 that World Vision free T Shirts are competing with many existing african-made products among the poorest of the poor in remote refugee-prone areas.

If World Vision-donated T-Shirts really were to reduce new T-shirt sales by the poor in, say, the DRC, the factories losing sales are most likely located in China or India, not Africa. That said, I also doubt that the donated WV t-shirts would reduce dramatically new t-shirt sales, rather than displacing other used clothing sales, or allowing people who've saved up for a new t-shirt to buy a button-shirt or pay school fees instead. Or more likely going to people for whom buying third or fourth T Shirt was never a priority in the first place.

Not sure if the absence of local t-shirt industry is true everywhere, but in large parts of the continent the domestic cheap garment industry is pretty non-existent. Distribution networks are such that Chinese stuff is much more available than say, Kenyan. Factories where they exist focus on higher-end or other products. How many Kenyan T-Shirt factories really depend on sales to Congolese refugees?

Wednesday, February 16, 2011 4:08:00 PM

 
Blogger Anne said...

tms ruge...
Do you happen to know any good articles or other material available about the impact of sending old computers to developing countries? You've piqued my interest...

Wednesday, February 16, 2011 4:25:00 PM

 
Blogger Saundra said...

Anne,

This isn't research, unfortunately, but it's a pretty good PBS Frontline video on the problem.
http://www.pbs.org/frontlineworld/stories/ghana804/video/video_index.html

Wednesday, February 16, 2011 6:17:00 PM

 
Anonymous theblogrebel said...

All of this because Jesus said "feed my sheep". Clothe the poor anyway possible I say. Although in some areas of Africa the T-shirts might be appropiated as standard uniforms for some rebel group. Then it would be horrible publicity for the NFL and the Steelers.

Wednesday, February 16, 2011 6:55:00 PM

 
Anonymous TMS Ruge said...

Anne, there are also a few research papers cited in this article here: http://www.afronline.org/?p=10946

Wednesday, February 16, 2011 6:56:00 PM

 
Anonymous Anonymous said...

Would perhaps second Chris Wuluk's remarks above. A complete economic impact analysis can't begin and end with the impact on producers but needs to include consumers.

Even if you acknowledge that the clothing industry in Africa was brought down by used clothing imports, would the end of used clothing imports fix that? Or would they be simply substituted for cheap other imports, particularly from China?

Thursday, February 17, 2011 2:20:00 AM

 
Blogger Jacob A. Geller said...

Here's that PIH report I was talking about. It's about food aid to Haiti, not free clothing, but they are pretty analogous. Large quantities of food come to Haiti from the U.S. suddenly, unpredictably, and periodically. That collapses the price of food and undermines the agriculture industry in Haiti. http://parthealth.3cdn.net/3f82f61a3316d7f1a0_pvm6b80f3.pdf

Thursday, February 17, 2011 12:12:00 PM

 
Blogger texasinafrica said...

Thanks, Jacob. I think there's scholarship about the similarities between food aid and clothing aid; basically, both make a mess of everything.

Thursday, February 17, 2011 1:49:00 PM

 
Blogger Jacob A. Geller said...

Oh, yeah, the Frazer paper does draw a comparison between food aid and clothing aid. Not food aid in Haiti, but they're clearly similar.

http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2008.02190.x/abstract

Friday, February 18, 2011 8:23:00 PM

 
Blogger PureGrace said...

Jacob, So what's wrong with a little protectionism now and again? Isn't it protectionism early on in America that helped us develop as a robust economy?

I like your "shocking dump" aspect you add to the argument, which seems to clarify the process of how dumping destroys local industry. So the "clothing-as-aid-puts-poor-textile-workers-out-of-business argument" should simply be changed to "...KEEPS-poor textile-workers-out-of-business."

With a steady flow of untariffed t-shirts, why would anyone invest in a local t-shirt company? Without a local t-shirt company, why would anyone invest in textile production? Or cotton farming? So the impact of dumping is magnified as it goes up the production chain.

My question is this: How would a country/region in Africa make a switch to move away from dumping and toward local production? What's the first step? Is it tariffs?

Saturday, February 19, 2011 9:24:00 PM

 
Anonymous John Q said...

Talk about Texas in Africa:
http://www.chron.com/disp/story.mpl/ap/tx/7438648.html
A private jet owned by a North Texas company has been impounded for the past 2 1/2 weeks and its passengers and crew detained by the Congolese government in central Africa, where officials say it was used to smuggle gold from rebel territories in the nation's eastern provinces.

Monday, February 21, 2011 7:38:00 AM

 
OpenID talesfromethehood.com said...

Great post. Very interesting comments thread. A few thoughts to add:

1) "There's just no way World Vision can honestly claim that these facts are unknown or that the impact of a clothing donation is unclear." -- Yeah, see, actually they *can* honestly claim that they don't know. How? Easy: they haven't read the research. Which begs the question: Has *any* INGO *corporately* consumed, digested and based its' global GIK policy on the research? Not to try to get World Vision off the hook, but I fear we'd be comparably disappointed with the response if we were to challenge *any* INGO to explain their GIK policy in light of the research your mention.

2) To the question of what *should*, then, be done with the misprinted T-shirts, my personal response would be: change the uber-materialistic culture of the USA and the WEST. Buy fewer T-shirts. For gods' sake, stop going to football games... Those damned t-shirts should never have been made. Yes, all much easier said than done.

3) In response to several in this thread: My personal view is that it is difficult to trace a straight line of cause and effect between giving away free T-shirts and some specific catastrophic economic meltdown. There are many reasons why some countries do not produce t-shirts locally, perhaps none of which are related to free t-shirts being given away there, or perhaps only one very small factor of which is t-shirt distribution by aid groups. It's just so hard to tell. As you say, TiA, the travesty of "shocking dumps" is that they "make a mess of everything." I'll put it slightly more directly: this is the essence of creating dependency. Unless we're truly prepared to sustain the distribution of [ANY GIK PRODUCT] indefinitely at a rate/level which meets the need of that population, doing bits at a time creates the very worst kind of dependency.

Monday, February 21, 2011 5:42:00 PM

 

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