Striking the right balance is the tricky part.
In countries where poverty is widespread, overpaying or tipping very generously will not solve the underlying problem, and may in certain circumstances have a distortive effect on the local economy.
During Mozambique's civil war, there was a dire shortage of educated or even functionally literate people, largely thanks to Portugal's colonial policies. This problem was exacerbated by all the expats cooped up in Maputo. Very few wanted to work as civil servants or even mailmen if they instead could get a positions on some expat's domestic staff for US$ 50 a month.
Johan