Why bargaining is good while alms and tips are bad

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    In poor countries the tourist is an obvious target for both working and non-working people who desperately need money. You are approached in very insistent manners by beggars, barefoot children, people with all sorts of physical deformities, peddlers, etc. Waiters, maids, drivers, guides and so forth expect you to lavish tips on them. Store owners, street vendors and taxi drivers try to charge you a lot more than what they charge the locals. For you it is likely to be little money. It is tempting to just give them what they want, hoping that they will go away, or just because you don't have time or don't want the hassle to say "no". Unfortunately, you may be causing a problem in doing so.
    First of all: they won't go away. Just the opposite: once established that you hand out money, the question is only how much money they can get from you. You may also attract the attention of other beggars, peddlers, hotel staff, etc. You are also likely to attract the attention of thieves and assorted thugs.
    Second, one major problem caused by "generous" tourists is inflation,. This is very visible in any part of the world where United Nations agencies or non-government agencies deploy staff: that staff is paid huge salaries and therefore can afford to give tips and alms, and rarely bargain on a price. The result is that extremely poor cities like Juba (South Sudan) become extremely expensive. They become expensive for all other tourists, but, more importantly, they also become very expensive for the locals. The middle class of the place where you are creating inflation cannot afford the prices that you can afford. Why would a rickshaw take a local who is willing to pay only 1 when he needs just one foreigner willing to pay 10 to make his day's profit? Ditto for restaurants, stores, and all sorts of services. You are literally hurting the already fragile middle class.
    Third, you are creating the wrong motivation. Why would parents send their children to school (which costs money) when the child can already make money by begging barefoot in front of restaurants and hotels? Why would a teenager dream of becoming an engineer or a doctor when he can already make money carrying luggage for foreigners at the train station? Why would a cripple look for a job when he can make money simply by exhibiting and exaggerating his deformities to a foreigner? Indirectly, by giving money to these people (no matter how good your intentions), you are distorting the society and the economy of this place. You should keep in mind what the correct priorities are: children should be motivated to go to school not to beg in the streets; cripples should be motivated to see a doctor and their family should be motivated to save money for a cure; vendors should be motivated to offer competitive prices to the locals, which should remain their main market.
    When you give money to a child that is apparently dying of a horrible disease right in front of you, you are actually motivating his family to keep him in those conditions. As a sick child, he provides money to the family. If he were healed, he would be an extra mouth to feed. As cruel as it sounds, this is the logic of any family that has many children to feed and few options on how to feed them.
    Your money can certainly help a lot. There are numerous organizations that fight diseases and poverty in these countries. Save the spare change that you wanted to give away in tips, alms or excessive compensation and give it to those charities. Support the businesses that are struggling but that are vital, for example the one bookstore that sells more than religious books.
    More importantly, remember that the worst thing that can happen to a developing economy is inflation. When the price of food increases 10%, you hardly notice, but they go bankrupt. Whenever you don't feel like bargaining and pay 10% (or 50% or 100%) more for something, you may cause thousands of people to fall below the poverty line.