Tipping in Tanzania

I just came back from Tanzania. The tour made me think about lots of issues, one of which was the practice of tipping:

1. Should I tip based on what I think it is worth or should I follow the local norm?

Here is an example: I once quarreled with two people who carried my luggage (3 pieces, 20 kg each) and helped me get on board a ferry. It took something like 15 minutes, their help was important because it was a lot of hassle - lots of people pushing and a confusing loading system. The daily minimum salary is around USD 3, but there are substantial variations. My safari guide earned about $100 a month in basic salary + at least another $100 in tips. My driver had told me not give more than $2. After finishing, they demanded $10. I protested, arguing that the driver had told me not to pay more than $2, but that I was willing to pay $4. They were not happy. We finally agreed on $5, but they were still not happy. However at this point I said: "Look. I am not stupid. $5 is quite a lot of money here and it is a lot more than you usually get for this job." They were stil not happy, but eventuely they left.Their unhappiness might, of course, simply have been an act to make me give more, but that is not the point here. The interesting issue is why I refused?

Thinking about this now, I am a bit surprised at myself. Giving a few dollars more would not have been a problem for me. And had it been in the US I would have done so since the standard there is different. The reason I refused to give more was simply that I did not want to give too much more than the local norm. Why not? I am not sure. Maybe it was because I do not want to appear to be stupid, that I do not want to feel like I was being exploited (!), fooled or taken advantage of. But then again, its a little money for me and a lot for them, why not just give it? I still do not know what the ethically right course of action would be. Pay what I think it is worth based on my rich world standard or follow the local norm?


2. Is is bad to tip? The economic consequences of tipping

By tipping I clearly make some people a little less poor and presumably a little more happy. This sounds good. On the other hand, in a poor country it sometimes has some strange effects. First of all it may imply that lots of people hang around harbours and airports and other places with tourists, doing nothing for a long time because in these places they occasionally get quite a substantial sum. On average this pays more than steady work, so we'll get a lot of people allocated to jobs that could be done by a few. Individually rational, but a collective waste of resources.

Moreover, some talented people who speak well English may well end up doing this kind of work since it pays better than other more worthwhile jobs - like teaching (Lets not make this too complicated: It is clearly a value judgement, I simply think that is is a bit sad when a system encourages talented teachers to hang around airports to carry luggage for rich white peole once or twice a day). Or good cooks become waiters because they earn much more as waiters. Now, there is little to do about this in a free economy (an economy which I like!), but it seems to create a paradox. Tipping encourages an economic structure and allocation of resources that may not be good. Maybe I should tip less? At least I should discard the guilt giving, redistributive motivational aspect of tipping and and just give more to the local school instead?

In any case, much tipping, I believe, is not really driven by a desire to reward good service, but by a norm. people may sometime give slightly more or less, but these variarions are often small comparet to the sum you usually give regardless of the quality. I also tend to dislike tipping because it solidifies and symbolizes a power inequality: Me as the important rich person who gives an inferior poor person a few crumbles of my wealth. Yes, I know this is a left wing argument, but I do not care. I think there is something to it regardless of the label. I would much rather simply pay a slightly higher bill at the hotel or the restaurant.


3. Tipping as a signal, but signals should be send before, not after the event!

Why did my guide insist that I only tip after I have received the service? Yes, I know that this keeps people on their toes until the end, eager to provide good service all the way until you leave in the hope of getting a good tip? For one time events like going to a restaurant, this may make some sense. But what about when you stay in a hotel? Would it not be more optimal to first signal that you are a person who will give a large tip if you get good service by tipping generously initially if you receive good service? You could tip like this every day, but i guess the rational strategy would be to tip a lot initially, or punsh a lot for bad service, and then announce that you will give all the rest of the tip the last day and thenthe shamelessly rational economists just leaves without giving more in tip.

Or even betterl: People can free-rided on the practice of tipping. It seems to me that this is rational and that tipping itself is similar to voting. There is one significant difference because tipping it is a face-to-face interaction, but in a hotel in Tanzania it is easy to get around this. Just announce that you will use the "tip box" for tipping while leaving without doing this. Then there is no social sanction and the no-voting rational man has also become the no-tipping man. In practice, of course, we tip and vote. it is a norm, as well as a way of reaffirming ideas we have about ourselves and the persons we want to be. Expressive rationality!

In the end
Although tipping quite generously, mostly out of a selfish desire to appear to be a nice person as well as a guilt driven rich white man, I did refuse once. When leaving, at the airport. Going through the security check with detectors and everything, one official requested a tip. He may have been poor, but there is something slightly worrying about corrupt people being in charge of airport security. So I left, thinking that tipping is something that deserves and article. This was, of course, not very original since lots of people have done it before (Eg Coyote blog, MR, History of tipping). So I'll just settle for a brief blog post right now and moe on to other things. Like the science of particle physics or something.