Response to Comments on "AIDS, Population, and Policy"--Posner

There were a number of interesting comments. Most focus either on the merits of foreign aid or on the costs of avoiding HIV-AIDS, and I will confine my response to these two issues. 1. I agree that my statement that foreign aid is an inappropriate use of public funds requires qualification in several respects. First, it can be a way of buying allies, and from that standpoint the fact that the money is diverted to the political or economic elite of the recipient country need not be an objection. Second, it can be a way of conferring utility on Americans who have ethnic or religious or family or other ties to people in the recipient countries. Third, it can be a subsidy to U.S. industry if the aid is conditioned on the recipients’ using the money to buy U.S. goods; in such a case the net transfer to the recipient nation may be small. Fourth, as in the case of the Indian Ocean tsunami, it can be a form of social insurance. It is also possible that such aid can confer utility on the populations of the donor countries because the plight of the victims of the tsunami triggers altruistic sentiments in those populations, and that emergency assistance, being temporary, is somewhat less likely to be appropriated by the ruling elites of the recipient countries. Perhaps most foreign aid can be assigned to one or more of these four categories, and only the third seems especially questionable from the standpoint of economic welfare. But when people criticize the wealthy nations, especially the United States, for being chintzy when it comes to foreign aid, they usually are not thinking about any of the above categories of foreign aid; rather, they want general wealth transfers to poor countries. And that is what I criticize, since the basic problem of poor countries is not that they are poor, but that they are badly managed; and being badly managed they are unlikely to benefit from handouts. Our present level of foreign aid may be adequate to satisfy the four types of demand for such aid that I have sketched. 2. Several comments raise a good question: if condoms are so cheap, why is HIV-AIDS so prevalent in Africa and certain other poor countries? The answer is that the use of condoms may involve substantial nonpecuniary costs, such as diminution of sexual satisfaction or violation of local mores. Alternatives to condoms, such as abstinence or, more realistically, reduction in the number of sexual partners or abolition of practices such as clitoridectomy and infibulation that increase susceptibility to sexually transmitted diseases, including HIV-AIDS, may also involve heavy “cultural costs.” However, these obstacles cannot be overcome or diminished by the expenditure of substantial monies on buying expensive HIV-AIDS “cocktails” for the affected population. Nor do I agree that because AIDS is at present treatable rather than curable by these “cocktails,” no rational person would increase his exposure to the risk of HIV-AIDS merely because he knew that he could obtain treatment that would prolong his life if he contracted the disease. Given that the full costs, sketched above, of avoiding risky sex may be high, it is plausible that even a slight reduction in the benefits of such avoidance could affect the amount of risky sex. It is true that we spend a lot of public money treating people for diseases that they could have avoided by changing their behavior. These are probably not economically sensible expenditures, because they operate to externalize the costs of risky behavior. Subsidizing AIDS treatments in poor countries invites the same criticism.

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