The Samaritan's dilemma is a dilemma in the act of charity. It hinges on the idea that when presented with charity, in some location such as a soup kitchen, a person will act in one of two ways: using the charity to improve their situation, or coming to rely on charity as a means of survival. The term Samaritan's dilemma was coined by economist James M. Buchanan. The argument against charity frequently cites the Samaritan's dilemma as reason to forgo charitable contributions. It is also a common argument against communism and socialism, claiming that state aid is equivalent to charity, and that the beneficiaries of such aid will become slothful or otherwise negligent members of society. The more aid that is received the less likely the recipient will seek out a permanent solution for their condition. The dilemma's name is a reference to the biblical Parable of the Good Samaritan.
A study published in 2016 looked at 5089 major natural disasters in 81 developing countries over a 33-year period. Results showed that among the countries that received natural disaster relief had less incentives to provide their own natural disaster protections. This effect is exacerbated the poorer and less-developed the country is that receives the aid.
Samaritan's dilemma in economics
In subsidized credit programs, for example, easy credit is handed to farmers who need a lower interest rate. Incentives play a large part in these types of programs, as governments, as well as workers both benefit from the government benefits. This is because governments want tomaximize the amount of borrowers, and farmers are likely to overstate their level of need for assistance from the government in subsidized credit programs. According to the Foundation for Economic Education, "Cheap credit extended by the Farm Credit System and the Farmers Home Administration during the inflationary period of the late 1970s was partly responsible for the dramatic increase in farm bankruptcies and financial stress of agriculture during the mid-1980s."
Avoiding the Samaritan's dilemma
Much foreign aid comes in the form of monetary compensation for damages or direct relief such as food or water. This type of direct aid does not provide any incentive for the recipient to become independent. By introducing incentives that developing countries can meet by building up natural disaster protection the effects of the Samaritan's dilemma can be effectively mitigated.
