Crowding out good deeds


There's an interesting paper here on blood donations. As we know, many countries have both paid blood donors and unpaid, motivated purely by that joy of giving, blood donors. What the paper finds is that if some people are paid to donate then this dissuades others from giving without payment. Sort of a, well, if they're getting paid, why shouldn't I attitude perhaps?

On the specific subject of blood I think it's pretty clear that altruism works better than money. When the American system began to insist that blood must be labeled as paid or donated, demand for the paid blood dried up (yes, sorry). So if the users would prefer donated and we can get enough from civic mindedness, then by all means, let's use the system that works.

However, this paper takes one more step and compares the underlying question to Cameron's "Big Society".

Understanding the interaction between voluntary and paid is a key part of correcting government interventions which are held to crowd-out individual actions. For example, the current UK government has advocated the notion of a “big society”, which, although rather unclearly defined, appears to have altruistic behaviour as a central theme.

Quite: and their finding about blood is that paid donors crowd out unpaid. If people know others are being paid then they become less willing to donate. This isn't true of non-monetary rewards but is of monetary.

Which is really rather an interesting finding for the Big Society, isn't it? That we've an army of state functionaries paid for by gouging the taxpayers' wallets is actually deterring people from volunteering. We do have crowding out of charitable and voluntary impulses entirely as a result of others being paid to do those same things.

Note that non-monetary rewards do not do this, only monetary.

So, if we cull the State, move the things that need to be done into the voluntary sector, we'll find more people willing to do these things precisely and exactly because we've culled the people being paid to do them. And we've got the perfect non-monetary rewards to hand as well: called the honours system. BEMs to KBEs, the same work gets done and we've lightened the burden upon the pockets of the populace.

What's not to like?