Philanthropist-Kings

A few weeks ago, I heard a story on NPR about a Pakistani cab driver named Ihsan Khan who hit it big in the Powerball lottery for $55 million. Like anyone who’s flirted with the jackpot, I’ve often wondered what I would do with millions of dollars dropped into my lap, but this cabbie, after he had luxured himself, hit upon something novel: he returned to his Himalayan village and ran for mayor.

Khan’s mayoral opponents tried to cut him down by dubbing him the “American Dollar Man.” But, if anything, the dollar value helped. He was elected last October. But two days later, a devastating earthquake hit Pakistan. It killed 3,000 citizens of Battagram. Mayor Khan rose to the occasion. He was able to bypass the government’s inefficient bureaucracy by dipping directly into his jackpot. He handed out $300,000 worth of medicine and roofing materials.

The NPR reporter calls this the “ultimate remittance,” referring to the flows of wealth back to native countries that is currently a much touted component of global development. The bit about bypassing incompetent government is reminiscent of how private individuals and corporations came to the fore when Katrina hit NOLA. It gives one a new appreciation for daydreaming about lotto winnings.
Sadly, this wouldn’t be nearly so romantic if I did it in America. Plenty of millionaires have already bought themselves offices and to not nearly as much good as Mayor Khan. But who says I have to stay in this country? If I won a philanthropic fortune, I wondered, where could I best spend it getting myself into office? And then the little Tyler Cowen in my mind asked, “What about Haiti?”

I think I could get a lot of bang for my buck if I went to Haiti and ran for president on a platform of mere vast wealth. Democracies being what they are, a really good gimmick can probably trump major shortfalls in other areas, namely, my non-citizenship, a language barrier, and an almost complete lack of knowledge of the local culture. But hey, that doesn’t stop me from sitting on my church’s missions board, and we support a mission to Haiti, so being president can’t be much a stretch.
But as I was scheming of how I’d use a fortune to turn Haiti around, say, by hiring my own security forces, buying out corrupt politicians, and turning economic policy over to my own Les Chicago Boys, I read something a couple weeks later that made me realize just how deeply Tyler Cowen had infected my brain:

If the world’s very poor countries stay in Malthusian traps, how long will it be before wealthy philanthropists can try to “adopt a country”? Measured Haitian gdp, for instance, is only a few billion dollars a year (TC: don’t ask about the storms!). Yes many countries have laws against foreign investment and land ownership, but at some point a correct strategy can put the money to good use. Can an entire corrupt government simply be bought out? Just how much money, and what kind of plan, would a private philanthropist need each year to turn Haiti around, or at least bring it to the standards of Martinique?

Gah! Shortly thereafter, more evidence emerged that I’m unoriginal:

Sudanese billionaire Mo Ibrahim (of Celtel fame) has created a $5 million dollar cash prize for Africa’s most effective head of state.

Each year the winning leader will, at the end of his term, get $5m (£2.7m) over 10 years and $200,000 (£107,000) each year for life thereafter. “We need to remove corruption and improve governance,” Mr Ibrahim said.
…The Mo Ibrahim Prize for Achievement in African Leadership will be launched in London on Thursday… It will be available only to a president who democratically transfers power to his successor.

I agree with Prof. Cowen that $5M seems a tad small compared to the wealth a corrupt African leader could extract from his country and foreign aid. Maybe we could redirect foreign aid to the prize instead?
But ultimately, we have some words of warning from Mayor Khan:

Khan says even before he was a multimillionaire mayor, he didn’t think much of welfare. But now that he’s loaded, he says he’s realized two things about money: that everyone’s greedy for it, and that it can’t always fix everything.