10 February 2006
Sharon Stone's Basic Instinct
Mass media - Articles XSM
Wall Street Journal

Davos, Switzerland, January 2005. President Benjamin Mkapa of Tanzania explains that most of the million children that die every year of malaria could be saved by insecticide-treated bed nets that cost only four dollars each. Sharon Stone is sitting five yards away from me. Suddenly, she gets up and with tears in her eyes professes to be deeply moved by the speech. She then pledges ten thousand dollars to Mr. Mkapa and urges everyone in the audience to do the same. Many raise their hands. The session’s moderator –who happens to be U.S. senate majority leader Bill Frist- counts hands and announces that a million dollars have been pledged. Naturally, this peculiar episode makes the evening news worldwide, and Sharon Stone becomes the superstar of Davos 2005.

January 2006. I am back in Davos and I ask several members of the World Economic Forum about the $1 million raised by Miss Stone. They explain that, in fact, only a quarter of the money pledged was actually raised. In order to fulfill the promise, UNICEF donated $750,000 so that $1 million worth of bed nets were sent to Tanzania. I ask if they know what happened to the bed nets. They don’t: they don’t know how many reached actual villages in Tanzania (as opposed to being stolen by corrupt border officials), they don’t know how many were actually used as bed nets (as opposed to fishing nets or wedding veils), they do not know how many were used correctly (bed nets can be hard to use in the absence of, well, beds!). In sum, they don’t know how many lives were actually saved. I try to ask Sharon Stone but I am told she is not in Davos this year.

There is no doubt that celebrity involvement in philanthropy can have many positive effects. Some donate their own wealth for good causes. Bill Gates and Oprah Winfrey are perhaps the two most prominent contemporary examples. Others use their exceptional position to induce their numerous fans to make donations. Possibly the best example is Irish rock star Bono who has raised millions of dollars to promote economic development in Africa.

Celebrities are also good at opening political doors. I am told that, after a meeting with president Tito of Yugoslavia, the US ambassador asked Kirk Douglas how he managed to meet the president (apparently the ambassador had been trying unsuccessfully to set up a meeting for months). Mr. Douglas looked puzzled and asked: “when was your last picture?” Here Bono is also a good example of political influence: without his determination presidents, prime ministers, and other influential figures would not have Africa on their radar screens.
Finally, popular figures are very good at raising awareness on certain issues: the late princess Diana brought worldwide attention to the crippling effects of landmines and Angelina Jolie has been very influential in alerting us of the disturbing living conditions in war refugee camps.

That said, the Sharon Stone episode highlights some of the negatives of celebrity-driven benevolence. First, it is not clear that they base their decision to embrace a particular cause on rational and informed thinking. Miss Stone reacted instinctively to the moving words of president Mkapa. She did not carefully research the causes and consequences of malaria, she did not compare them with other problems in the region, she did not consult public health experts on potential solutions other than the free distribution of bed nets and, more importantly, she did not ask the citizens of Tanzania if that is what they wanted. Had she done so, she might have been surprised: some African governments do distribute free bed nets through public hospitals. The trouble is that many people take the free nets (they usually take anything free), sell them in the black market, and use the money to buy something they really want.

The problem of selecting the “wrong” issue is magnified by the fact that central to a celebrity’s business is his or her public image. Thus, causes that are not “attractive” are never adopted. When Sharon Stone raised her hand at Davos, I was sitting next to a prestigious doctor. He whispered to me that yes, one million children die of malaria every year… but two million die of diarrhea. He wondered if Sharon Stone would have been equally moved had the speech been about intestinal diseases and other affections with little aesthetic appeal.

Second, while celebrities can use their popularity to raise funds, they can also divert them from other worthy causes. When it was clear that Miss Stone had failed to raise the promised money, UNICEF had to step in with three quarters of a million dollars. If UNICEF would have spent that money purchasing bed nets for Tanzania anyway, then her stunt was a waste of time. If, as is more likely, UNICEF was going to spend it somewhere else, then Miss Stone’s gut reaction ended up diverting resources from other (possibly more worthy) causes. On a larger scale, this is what happened during 2005, when dozens of celebrities bombarded us with pleas to help the victims of the Asian tsunami: many NGOs operating in other areas of the world saw their donations decline. That is, although some of the money raised for tsunami relief was new, some was actually taken away from places like Africa. And the question is: how many died in Africa for every person saved in Asia?
Which leads us to the third problem: the rich and famous tend to be more interested in raising money than making sure it is spent productively, perhaps because monitoring is more difficult and less glamorous than fundraising. Aid should not be about how much is raised and spent, but about how it is spent and with what results. It is not about inputs. It is about outputs. Here, things might be starting to change: Bono has expressed concern about the effectiveness of the money he helps raise and has even attended classes at MIT’s poverty lab to learn how to direct aid more effectively. Let’s hope others follow his example.

The last, and perhaps worst, problem reflected in Sharon Stone’s act is that celebrities tend not to be accountable for their actions. If a businessman does not produce what his customers want, he loses his money and is expelled by the market. If the funds raised by Sharon Stone are wasted, she does not get expelled from anything, she does not have to pay back back the donors, and worst of all, if her action turns out to cause harm (perhaps because she diverted away from other places where it could have saved lives), she will not be legally liable. Empirical evidence shows that certain types of development aid induce corruption, cause dependency and allocate talent away from productive activities and into bureaucracy. However, if the millions raised by Bob Geldof or Bono in their benign attempt to “make poverty history” end up having these negative net effects on the recipient countries, the benevolent singers would not suffer any legal consequences. Contrast this with what would happen to a CEO of corporation that pollutes a river!

We live in a world plagued with difficulties: malaria, poverty, AIDS, climate change, wars, personal mines, female discrimination, water scarcity, extinction of whales, lack of education, tsunamis, racial intolerance, melting icecaps, migration, abortion, erectile dysfunction, nuclear proliferation, and many others. Some of these problems are real, some are imaginary, some are immediate, some are remote. They have varying social, economic, and human costs. We, humans, do not have the institutions nor we have the methodology to rationally prioritize among them. As a result, billions of dollars are wasted every year and dozens of important issues remain unaddressed. What are we doing to solve this problem? Very little or nothing. We seem quite happy to leave this essential prioritization to the arbitrary outcomes of Sharon Stone’s basic instinct.