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DanielLC comments on An answer to a possible objection to cash-transfer charities - Less Wrong Discussion
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Comments (7)
Global trade being cheap isn't necessary. It just makes the wealth transfer faster.
If you send a dollar to Kenya, this would result in USD being inflated in Kenya and deflated in the US. It would not immediately cause any wealth transfer. However, it would make someone in the US less willing to buy the now more expensive Kenyan commodities, and Kenyans more willing to buy the now cheaper US commodities. This will act to counter the changes in the values of the currencies until the dollar moves back, and they are now in balance.
This is also hastened by the fact that Kenyans don't use USD. Since there's only a small amount of USD in Kenya, moving USD to Kenya causes much higher inflation of USD. They only real way to use USD in Kenya is to buy something from the US, so it will be used for that fairly quickly.
Is your last paragraph based on specific knowledge, or are you just assuming that since USD isn't legal tender, it's not used as currency? My understanding is that USD is used as currency throughout the world.
It's not specific knowledge. I tried to look it up, but I didn't get anywhere.
In case it helps, I spent some time in Kenya, and in the remote poor rural area I was in, it was all Kenyan shillings - no dollars.