He may be modeling it as (or similar to) a prisoner's dilemma, with the assumption that only a huge infusion of funds could cure malaria. In this case, assuming a democracy, "spending other people's money" is more like enforcing an agreement contract in a dilemma game.

(This model is wrong, of course, but I doubt many people are aware of the expected disability-adjusted-years-gained-per-dollars-spent-on-mosquito nets statistics)

This might sound like a nitpick, but I think it's important, the parent's step-father most likely spent his money on what were advertised as cures and treatments that guaranteed to solve his baldness problems. I doubt he put that money directly into baldness research, but instead spent it on what was supposed to be a viable product.

I think it's an unfair distinction. Would I spend money on a solution that directly affects me or would I invest in a possible treatment that doesn't affect me? That belief that the first choice is available and implemented heavily skews the balance.