This is the Cato Daily Podcast for Wednesday, June 5th, 2013. I'm

Caleb Brown. Government and NGO-driven humanitarian interventions have a poor

track record. Christopher Jay Coyne and his new book,

Doing Bad by Doing Good, argues that much of the problems

associated with these interventions

is part of the structure of the incentives involved,

and thus it's baked into the cake. We spoke following a forum

for the book today. What do you think that people who are involved in NGOs, people

who are involved in government directed aid programs, what do you think they don't

understand about markets?

The understanding of markets that a lot of people overlook is their ability to effectively allocate resources to those who value them the most.

And ultimately what economic development requires and by economic development, I mean increase in standards of living

is continually reallocating scarce resources to new and better uses

and both theoretically and empirically markets are the superior

mechanism for for doing this for allocating these scarce resources in ways that

increased standards of living.

Now in places that have been devastated, sometimes for long periods of time, what is the role of markets versus governments and

NGOs there and you know to the extent that governments are supplanting these

other processes how is that actively damaging?

So one of the arguments for state-led humanitarian action is that in many places where there are these

humanitarian crises, they're very poor, so they don't have well-developeddeveloped markets they say you can't rely on the market

mechanism and there's two things to think about one is that relying on markets in some

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