Altruism Escalation

My friend, Jack, wonders what will happen in the next few months if there is another disaster requiring considerable relief aid (e.g. Sudan? Congo? Rwanda?) now that so many individuals and gubmnts seem to have engaged in a competition of Pharisees to see who could donate more in relief aid for the victims of the Indian Ocean's tsunami. How much more will people be willing to donate in the next few months or year if another disaster strikes?

In Canada, the gubmnt announced it would match all private donations up to $150 million. One of my students suggested that the plan might actually lead to smaller private donations. [Presumably he believed the income effect would dominate the substitution effect.] It turned out that private donations were huge. Every conceivable club or organization had a fund-raising activity.

For a different perspective, here's a pretty biting and thought-provoking comment on the political posturing of the politicians who didn't seem to learn the lesson of the Parable of the Widow's Mite.