Altruism and economic behavior: II--private charity and public policy

The relative advantages of private charitable organizations as against government agencies in achieving efficient redistribution of income and supply of services are examined. Central to this discussion is the elasticity of private giving to tax concessions and the proportion of donor dollars being absorbed in overhead. Recent estimates of these magnitudes are summarized. Of parallel concern is to what extent can reliance on altruism by sellers of goods and services serve as a substitute for government regulations to enforce standards, prices or product disclosures. Finally, the ways in which government can use and encourage private charitable impulse to maximize social welfare are examined; of particular interest here is the literature surrounding Richard Titmuss' work on blood donorship which raises the issue of whether or not extension of markets reduces, rather than extends, individual choice. The growing technological complexities of society, it is concluded, render the altruistic virtues of trust and consideration increasingly valuable-if increasingly rare.