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.)