I wrote recently about people who live on a dollar a day. Now, I have a dollar or two to spare, and so, dear reader, do you. So why not spread the wealth around? Good question. For one thing, there’s the fear that the money would reach the wrong people: corrupt charlatans, not-really-poor people, addicts...

Then there’s the ”curse of the free lunch” - or what a more strait-laced economist would call ”rent exhaustion”. It works like this: I fly somewhere deserving - say, Dar es Salaam - and hand out dollar bills to strangers. I’ll do it next Tuesday, starting at noon; please form an orderly queue. This would be guaranteed to produce a long line of people. Someone who made a dollar an hour would be willing to queue for up to an hour; someone on a dollar a day would be willing to queue for a day.

At least the people who found it worthwhile to queue would be poorer than those who didn’t. But many in the queue would surely be better off earning it by doing something productive. Each dollar I gave away would be worth only a few cents once you subtracted the cost of the recipient’s time - by trying to get the handout, they are destroying much of its value.

Rent exhaustion is no economists’ fantasy - go to any place with rich tourists and poor locals (Dar es Salaam, the first African city I visited, fits the description nicely), and you’ll see lots of people waiting for the one generous tip or overpriced taxi fare. If the tourists become more generous or gullible, the local guides don’t get richer, they just multiply. The bigger paydays become less frequent.

Tyler Cowen - an economics professor with a popular blog - argues in his forthcoming book, Discover Your Inner Economist, that for these reasons you may wish to give money away by wandering around a poor country, far away from the tourist trail, and handing cash to people who look busy. This is only worthwhile if you were already visiting the poor country to start with.

What if you’re sitting in London or New York and wish to get money to a deserving Tanzanian? You could simply give to a charity such as Oxfam, trusting that it will spend it well. But what if you want a bit more personal involvement?

You might buy fair-trade products certified by a group such as the Fairtrade Labelling Organisations International (FLO). The FLO promises that the people who made that product did so in good conditions and received a cash premium over and above the going rate, so you’re really making a charitable donation to whoever produced your product. (Watch out for mischief - some retailers tack on an extra premium for themselves.) Fair trade tends to reduce rent exhaustion as most people who benefit are already engaged in the activity, although the prospect of the premium will tempt more farmers into a business already suffering from oversupply.

Rather than buying something, you could offer a loan, since that could launch a small business but is less use to a tourist tout. Such loans have become fashionable, even before their pioneers, Grameen Bank and Muhammad Yunus, shared last year’s Nobel peace prize. With the power of the internet, you can even do it yourself: sites such as Kiva.org offer a list of small businesses, certified by local partners and eager for loans of just a few dollars. So grab yourself a fair-trade cappuccino, and armed with a laptop and a credit card you can lend money directly to Rosemary Komba.

She’s a shopkeeper in Dar es Salaam and, I’ll hazard, more deserving of your cash than the chaps you’ll bump into around the local hotels.

Tim Harford’s book ”The Undercover Economist” (Little, Brown) is out now in paperback.