What’s the effect of TOMS shoes on local development?

A new paper from Wydick, Katz and Janet (link now fixed):

We carry out a cluster randomized trial among 979 households in rural El Salvador to test whether shoe donations exhibit negative impacts on local shoe markets. Households in half of our communities were given a pair of children’s shoes at baseline (treatment communities), while all households were given coupons that could be used for shoe purchases at a local shoe store.

Although point estimates on coupon redemption and difference-in-difference estimations indicate shoe purchases to be slightly lower among households receiving the donated shoes, we find no statistically significant difference in market shoe purchases between treatment and control households.

32 Responses

  1. So are governments wrong to levy import duties on imported donations. They do it because it is said to effect local growth. But not much according to the research paper. It is not just about local production it is about import tax revenue and hence growth by fiscal expenditure.

    Example is given of a mission that imported -duty free- second hand clothing on regular basis and freely distributed the same. Government eventually put duty on it. Imports stopped because of cost.