what pulls our purse strings

Aidwatch pointed out yesterday that, while Americans had shelled out $560 million in donations to Haiti two and a half weeks after its earthquake, in the same amount of time we had only raised $5 million for Pakistanis suffering from the flood disaster.

At first glance, that's a staggering difference in charitability and one can't help conjecture - as Aidwatch does - what's at root of the donation gap: distance from home? unfamiliarity (due, among other things, to the fact that Pakistan is not a tourist destination)? distrust of Pakistani charities? a media bias? or is it just anti-Islam sentiment?

We'll probably never know, but Aidwatch mentions that at least part of what drives donations are the number of lives lost - and it just so happens that while Americans had given 100 times more to Haiti, Haiti had also suffered 100 times larger death toll.

There's also another explanation: randomness. Network theorists tell us that "trends" (that is, any behavior that catches on, including charitable giving for a disaster) act in random, unpredictable ways. In a complex system, it's often not one or two causes that can explain why you get an "information cascade" - rather it's a lot of small factors that add up. It's not a satisfying explanation, but it may be the closest to the truth.

transparency at any cost

The LA Times reports this week that Arne Duncan, US education secretary, thinks teachers evaluations should be public. "What's there to hide?" Arne asks.

Arne's simple question hides the complexity of transparency. Among democracy lovers, transparency - opening up the goings on of government institutions - is usually thought of as an indisputably good thing. And that makes sense - if there's nothing wrong, why would you want to hide it?

But transparency - like everything else - only works if it aligns with human incentives and behavior. Sometimes things work better with transparency. Sometimes not. Running an organization, like a school, is a good example of the latter.

If you run your own company, you know you have some employees who deliver more than others. Managing that gap takes finesse; you want to keep the better employee fired up while figuring out how to improve the other employee's game. You may experiment with performance pay, mentoring or creating teams that have their own incentives. At the same time, you've got to make sure your clients are served. One thing's clear; there's no way all your clients can work with the best employee. So you have to make choices. Now let's say your employees' success rates are made public. You've got a problem: everyone will want to work with the top employee, none with the 2nd rate worker. The 2nd guy is just as likely to become demoralized as energized by this new public information; either way, office morale and team-spirit are sure to plummet. Any incentives you've worked out to improve the 2nd employee's work get lost now that all eyes are on his numbers.

I've just given a negative picture of what transparency may deliver; there are likely many positive responses and scenarios that could occur as well. The point is that, when you add transparency, the picture changes - in many potentially complex ways. If you're Arne you'd want to think "in what ways will transparency shift the incentives and dynamics in schools?" and "In the end, are students better or worse off?" It's not a no-brainer.

can you be a savvy optimist?

Philosopher Richard Scruton, in making a case for the virtue of pessimism, explains why we tend to be optimistic idealists (as summarized by reviewer Richard King):

"Scruton identifies seven fallacies that he sees as underwriting false hope. Put briefly, these translate into a tendency to always look on the bright side, a belief that freedom is hampered by law, an unwillingness to countenance refutation, a belief that failure in one human quarter is directly connected to success in another, an inclination to impose solutions rather than letting them evolve over time, the idea that human history has an endpoint, and the tendency to assume agreeable concepts such as liberty and equality are mutually reinforcing."

We picked these tendencies up as hunter-gatherers when, presumably, they served a purpose. Now they can rush us into over-exuberant campaigns to perfect the world. As a world-perfecting ideologue, the challenge is to figure out which instincts can buoy our drive to make the world a better place - and which might lead us down blind alleys.