Afterwords, my son asked "Dad, doesn't the distribution matter as much as the mean?"
"Yes," I replied. "It does. In fact, the distribution may be more important than the mean. Professor Deaton would be proud of you for pointing that out."
|Fig 1: What aid cheerleaders believe|
|Fig 2: What aid critics believe|
By contrast, the critics feel that Figure 2 is more accurate. They believe that the average impact is -1, with the vast majority of projects (the non-shaded area under the curve) having an impact less than zero. The impact of some projects even approaches the nightmare of -4. Most critics will concede that there are some projects (the shaded area) that have a positive impact, and if pressed they will offer some personal examples. (Professor Deaton offered certain health projects, for example.)
The important question is not whether aid as a whole "works," which has been the subject of a large number of papers in recent years. The real question is what the distribution of impact is.
So, readers, here is your homework assignment: 1) Do you consider yourself a cheerleader or critic? 2) Please download a blank version of the graph here, fill in your own guess at the distribution and email it to me. 3) Describe what types of projects you feel fall into the category of effective. I will post a follow up with selected responses and insights.