I read
Lomborg’s 2020 book False Alarm, which was about toning down the crisis mode
around potential climate change impacts, understanding that the problem is not
as bad as we think, and promoting climate resilience and adaptation over
near-term emissions reduction because it has more immediate benefits. It was a
good book. However, this book is much better and more relevant to solving
global problems and mitigating human suffering. While Lomborg has long been a
darling of right-wing pundits due to his calls to deprioritize climate change,
here he is showing with great skill what we can and should do as priorities. He
is an economist and head of the Copenhagen Consensus, a group of economists
that tackles the economic aspects of solving global problems. This is really a
fantastic book that summarizes the most efficient ways available to help the
greatest number of people the fastest. It is tailored for poor countries, both
low-income countries, and low-middle-income countries. Lomborg has also written
several boos about prioritizing problem-solving in specific countries and
regions including Ghana, Rajasthan, Andhra Pradesh, Haiti, and Bangladesh. He
is kind of a “guru of prioritization.”
The economic methodology
used in the book can be complicated in terms of details but is simple in terms
of calculated results. The methodology is that of benefit-cost ratio. The benefits
and costs are determined in U.S. dollars, discounted at an annual rate of 8%,
and total benefits are divided by total costs to arrive at a benefit-cost ratio
(BCR). For many topics, this also requires determining the statistical value of
a human life, which can vary considerably by countries’ wealth and means. There
will be more about methodology as I summarize and review the Appendix which
covers this topic.
The book is
the culmination of two decades of work by the Copenhagen Consensus in
prioritizing global goals. The UN’s sustainable development goals (SDGs) run
from 2016 to 2030. Now, in 2023, we are at the halfway point, and we are far behind
schedule on many of these goals. This book prioritizes by offering 12 of the
most efficient policies we can focus on to improve lives in the poorer parts of
the world. These policies, according to the many researchers involved in this
project, offer the best BCRs:
“For about $35 billion per year, we can save 4.2
million lives annually, and we can make the poorer half of the world
more than a trillion dollars better of each and every year.”
The book is aimed at politicians and wealthy
philanthropists, those who can appropriate funds for these policies.
The Success of the UN Millenium Development Goals
Lomborg hails
the UN’s Millenium Development Goals, created in 2000 by UN Secretary-General Kofi
Annan and his aides, along with the IMF, the OECD, and the World Bank. The
result was eight goals and 18 specific targets, with a deadline of the last day
of 2015. Investment grew significantly, and most of the goals were either
achieved or came reasonably close. The MDGs helped to save between 10 and 19
million children’s lives, according to a study in 2018. Even though all MDG
goals were not achieved, the effort was incredibly successful.
The Sustainable Development Goals: Too Much Input and
Too Many Promises, According to Lomborg
In contrast to
the MDGs, the SDGs, according to Lomborg, are a sprawling set of goals that
have not been properly prioritized. He thinks there were too many issues
included – 1,400 different suggested promises, 169 targets across 17 goals or
themes – much greater in scope than the MDGs. He criticizes some of these goals
such as “promoting sustainable tourism, boosting organic foods, or green
public spaces for disabled people” as well-intentioned and important but
not in league with saving lives and slowing hunger, disease, and malnutrition. One
might say we need to focus much more on the lower rungs of Maslow’s hierarchy
of needs. Other goals he criticizes as too vague and others yet as too costly. Interestingly,
he notes that the MDGs resulted in a doubling of global aid, but the SDGs
showed just a slight uptick in spending. Data suggests that the SDGs are way
behind trajectories, and were even before Covid, which actually caused some backtracking
in some areas. The data suggests that we will be half a century behind on achieving
many of the SDG goals, and although some goals will be met, those are often not
the goals most in need by poor countries.
Phenomenal Benefits at the Lowest Cost
Prioritizing gives the best benefits at the lowest costs. According to Lomborg, the Copenhagen Consensus has been identifying the phenomenal policies that do just this for two decades in collaboration with 100 of the world’s best economists and several Nobel Laureates. They refined this process to come up with this book. The result is the 12 policy solutions that follow. The methodology involves arriving at the statistical value of a human life for one year, such as saving one child from dying of malaria or postponing the death of one elderly person. The poorer half of the world is the focus of the book since that is where policies can do the most good at the least cost. They analyzed 100 different SDG proposals to arrive at the 12 most efficient ones. The metric they used is those policies that could deliver at least $15 of social benefits per each dollar spent, or a BCR of 15. Lomborg did note after meeting with many countries’ UN ambassadors, unfortunately, that there was some pushback as some governments seemed more interested in promoting popular policies over the most effective ones. He also noted there were some changes since 2015 of policies’ BCRs so some fell below a BCR of 15 and others rose above that level. Even some very good policies like providing clean drinking water and providing sanitation stayed well below a BCR of 15. Other policy proposals like a global carbon tax only delivered a BCR of 2. This is because they take so long (decades to many decades) to have an effect. Lomborg argues that these 12 policies have a combined BCR of 52 and that the total annual cost for them would be about $35 billion. This amounts to about 3% of current global climate spending, about 1.67% of global military spending, or about 1% of global education spending. It is quite do-able, he notes. We should do these things now because they will have the most impact at the lowest cost in the shortest amount of time. He argues that we did it successfully before with the MDGs and so we should do it again by prioritizing the SDGs.
The 12 best
policies identified are as follows: Tuberculosis, education, maternal and
newborn health, agricultural research and development, malaria, e-procurement,
nutrition, land tenure security, chronic diseases, trade, child immunization,
and skilled migration. Each chapter is based on a specific policy paper with
multiple authors and advisors. Each is published in Cambridge University’s Journal
of Benefit-Cost Analysis, with a link given to the paper after each chapter. I will
summarize each of these policies below.
1)
Tuberculosis
Tuberculosis
is very treatable and virtually non-existent in rich countries, and yet it
still kills 1.4 million people a year in poor countries, killing more people
than Covid in 2022. With specific strategies and more funding most of these
needless deaths can be avoided. According to one study, TB has killed more
people in the last 200 years than smallpox, malaria, the plague, influenza,
cholera, and AIDS combined, about 1 billion people. Thus, it has likely been
the most lethal pathogen of all time. TB is caused by a bacterium and is spread
by coughing. It is an urban disease, spread by close contact. TB death rates
declined drastically in the rich world from 1850-1950 due to better living
standards, better nutrition, basic public health measures, isolation, and
likely some herd immunity. A vaccine developed in the 1920’s and antibiotics
like streptomycin, discovered in 1944, helped to nearly eliminate it. However,
there was a resurgence with the AIDS epidemic, where severely weakened immune
systems led to more TB cases, particularly in South Africa. Most TB deaths now,
however, occur in India. Even though the death rate per 100,000 people has
dropped fourfold in the past 75 years, with the growth in population, TB
stilled kills half a million people in India annually.
The aim of the
SDGs is to eliminate TB by 2030. We are not on target to do that at current
spending levels and with current strategies. Covid restrictions led to less
people being diagnosed with TB and an extra 150,000 deaths in 2021.
Lomborg notes
that there are two challenges to slowing TB: 1) difficulty in getting diagnosed
people to treatment – medicine must be taken every day for four to six months;
and 2) cost of treatment – even though the treatment is basically free, there
are additional costs like getting to treatment, paying for private sector
treatment due to convenience and timesaving. People lose weight and need
additional nutritional support. Many lose their jobs. Some are stigmatized, as
in Kenya. In Mali there are significant financial costs for treatment. Partial
cures due to not taking medicine long enough have led to a drug-resistant
strain of TB. Curing this strain takes much longer, 18-24 months, which creates
additional hardships. Diagnosing the disease is also a challenge. In 2021,
about 60% of TB was identified, a major improvement, but still not enough.
About 45% of undiagnosed cases lead to death. Thus, one need is for more
testing and screening of vulnerable populations. These solutions can save many
lives. People in homeless camps, slums, refugee camps, prisons, and migrants
are among the most vulnerable populations. Rapid gene testing needs to replace
less effective sputum microscopy for diagnosis. It is way more accurate and has
dropped in price in recent years.
The strategy
for lowering cases and deaths from TB includes finding and diagnosing more of the
4 million annual cases that are missed. Spending on TB has not grown for many
years (flat since 2018) and increased spending would do a lot to save these
lives. Total spending in 2022 was $6 billion. Modeling suggests spending an
average of $5 billion more annually, with higher amounts in the early years resulting
in less spending in later years as successes are achieved.
Much of the
cost will go to better screening and testing. Other costs will go to incentives
to complete treatment such as food, clothing, and gift cards, nutritional
supplements, and subsidized bus or taxi travel to appointments. The goal is for
50 million more people to get access to good treatment over the next seven
years. Models indicate this could result in a 90% death reduction to 2030. Up
to 1.2 million lives could be saved in that short time period. The BCR given
for TB from 2023-2050 is 46, a very good return (of human lives) on the
investment.
2)
Education
The first observation
given here is that despite increased spending children in poor countries are
failing to learn basic skills such as reading and math. Level of education is a
direct determinant of whether a country will be rich or poor. Rich countries spend
trillions on education. He notes that today, 86% of the world’s adults are
literate, compared to just 12% in 1800. The MDGs were very helpful in closing
education gaps. The problem, says Lomborg, is that while more children are going
to school, many of them are not learning very well – not achieving the Minimum Proficiency
Level - for a variety of reasons. Simply spending more money per student has
not worked to improve learning. He notes that learning scores in sub-Saharan Africa
increased just 5% from 2000 to 2015. While significant successes have been
achieved with much higher enrollment, success is lagging in terms of test
scores. One reason is simply that adding more students with underdeveloped
learning lowered the average scores. These were the results in India and Indonesia.
Even adding teachers, reducing classroom size, and providing tablets and
laptops did not improve scores. The SDGs promise free schooling leading to “relevant
and effective learning outcomes.” We are lagging in this regard.
The researchers
recommend two policies to better meet this SDG goal: 1) teach at the right
level – instead of grouping with age exclusively, a significant part of the
time students should be grouped at proficiency levels. One way to do this is to
first assess levels with tablets, then teach according to assessed level. There
are existing software packages that can do this. This is best done for about 1
hour per day, so that many students can share a tablet. It also relieves
teachers’ concerns that they will be replaced by software. This approach has
proved to be successful in improving test scores. A second approach to teaching
at the right level is to shuffle students so that for part of a day they are in
classrooms learning at their proficiency level. While this may require more
teachers, more testing, and some awkward social interactions, it has also
proved to be successful. 2) structured pedagogy – many teachers in low and
low-middle income countries are paid poorly and are unfortunately not very
competent as teachers. Structured pedagogy involves semi-scripted lesson plans,
training teachers in their use, and coaching teachers during use. This approach
has been so successful in Kenya that the whole country now uses it. These
policies are cost-efficient too. BCR was calculated at 65 for teaching at right
learning level with technology, 48 for teaching at right level without technology,
and at 105 for structured pedagogy. The average BCR for all was 65, a great
investment. Better learning leads to better productivity and eventually to more
prosperity for the country. Structured pedagogy in particular can offer great
benefits at a global investment of just $9 billion per year.
3)
Maternal and Newborn Health
In Africa and
Southeast Asia mothers are 80 times more likely to die from pregnancy-related
complications than those in wealthy countries and newborn babies are 10 times
more likely to die. This results in 2.6 million deaths per year. More funding
to hire birth attendants and emergency care providers, training, drugs, and
infrastructure can help to reduce these deaths. Rich countries have solved
these problems and with funding poor countries can too. Sub-Saharan Africa
accounted for one third of the 600,000 maternal deaths in 1985 (200,000) and two
thirds of 300,000 maternal deaths in 2015 (also 200,000).
Lomborg notes
that the MDG goals reduced maternal and newborn deaths significantly, but there
is more we can do. Unfortunately, in the first 6 six years thus far of the SDG goals
the drop in maternal mortality has stalled and flatlined. One reason is simply
that there are more births in poor countries. Similarly, for infant deaths, the
current trajectory shows they will still be close to 2 million per year in 2030,
far behind trajectories. Funding has not been increased very much since the
time of the MDGs. Funding needs to increase.
A protocol for
evaluating solutions to maternal and infant mortality by the Institute for
International Programs at the Johns Hopkins Bloomberg School of Public Health,
called the Lives Saved Tool, or LiST compares policy choices in terms of cost
and effectiveness. Researchers for this paper used 42 different interventions in
different phases of pregnancy to find out what works best at the best cost. The
paper examines packages of interventions rather than individual interventions. They
focused on the 55 low- and lower-middle-income countries that account for 90% of
global maternal and neonatal deaths. The results point to two packages of
interventions that offer the best benefits for the least cost: 1) increase
coverage of Basic Emergency Obstetric and Newborn Care (BEmONC) to 90%
- this involves increasing staff, knowledge, and resources offered at
healthcare facilities to treat birth complications. It involves women giving
birth at the facilities with BeMONC services provided. Today only 63% give
birth at a health facility so that needs to be improved as well as the services
provided. Of all the BeMONC services neonatal resuscitation can be the most effective
since birth asphyxia causes one third of the 2.3 million neonatal deaths each
year. About 5% of all babies globally need ventilation. A re-usable
resuscitator, a mask with a hand pump, can help prevent many deaths at low cost.
These need to be available at all facilities; and 2) Increase unmet need
for Family Planning services to 90% - women in poor countries
need to know that it is possible to avoid pregnancy and have access to family planning
methods. If less women would become pregnant each year, less women would die. Less
children being born in poor countries also means more resources available for those
that are alive. Women with less dependents can join the work force and make
money for their families. BeMONC and Family Planning are given a very good BCR
of 87 - $322 billion in annual benefits for $22 billion in annual costs. He
calls implementing these policies “smart and morally compelling” and it
is hard to disagree.
4)
Agricultural Research and
Development – More and Cheaper Food
Even though we
have made fantastic strides in reducing hunger in recent decades, we can do
much more. Hunger and micronutrient deficiencies are a huge problem in the poor
world, especially for mothers and young children. We have made significant
progress tackling this problem but in the fast five years progress has stalled,
partially as a result of Covid and Russia’s invasion of Ukraine. Annual deaths
from malnutrition are 878,000 in low-income countries and 1.8 million in
low-middle-income countries. This is a conservative estimate and is clearly unacceptable.
We can reverse this trend with two main actions: economic growth
and agricultural innovation.
Lomborg notes
that in general when a country’s GDP per capita reaches $10,000, then practically
no one goes hungry. Economic growth and increased agricultural productivity
have combined to keep more humans properly fed. The development of better crop
varieties, more irrigation, and more nitrogen fertilizer have been the three
major inputs to successfully feed more people. He notes that since 1961, global
cereal yields increased by a remarkable 249%. Of course, higher yields mean
lower food prices. We have also been able to grow way more food with way less
workers, which also keeps food cheap. Mechanization of farming practices is a
big factor.
The MDG target
for hunger abatement was very nearly achieved, However, since then we have backslid
a bit. Hunger and malnutrition have increased since 2017. Covid led to 150,000
more people facing hunger and the Russian invasion of Ukraine led to 8 million
more people becoming undernourished. Lomborg describes the SDG goals on hunger as
“remarkably unfocused.” He thinks the SDG’s big wish list for countering
hunger is too varied and complex. The SDG goal of eliminating hunger by 2030 (since
re-interpreted to reaching a low of 5% malnutrition) is not feasible with the current
focus and funding levels.
Improving
farming output is vital. He thinks overly focusing on smallholder farms and
subsidizing them is not the best use of resources. These farms are often
inefficient. Larger and better organized farms should be the focus. Unfortunately,
agricultural policies are often not good investments for banks and governments.
Investing in
agricultural innovation and R&D has the potential to generate great returns
as it has in the past. However, investment in this approach has lagged in the
poor half of the world in recent years. He notes:
“… large-scale farms in rich countries with dependable
property rights can afford to buy expensive but profitable technologies like
new seeds. They have access to extensive agricultural science, funding, and
infrastructure to enact innovations. Few of these things are available to farmers
in low- and lower-middle-income countries.”
80% of agricultural R&D goes to high-income countries
and most of the remaining 20% goes to lower-middle-income countries. Even the
original Green Revolution overall favored wealthier countries. Clearly, poor
countries need access and investment into ag R&D and new technologies. Better
seeds, more irrigation, and more mechanization are needed. More of the internationally
aligned research centers so vital to the original Green Revolution are needed. Innovations
can lead to higher farmer incomes, more food, and cheaper food. That is what
can keep people fed. An annual spending increase of $5.5 billion could generate
$184 billion in benefits for a BCR of 33.45. This would be a very effective
investment.
5)
Malaria
We know how to address and reduce malaria.
Simply put, he notes we can spend an extra $1.1 billion annually to avoid
200,000 deaths each year, yielding a phenomenal BCR of 48. Malaria is mostly
gone in the rich world. Unfortunately, it is still endemic in sub-Saharan
Africa. Malaria is caused by a parasite carried by mosquitoes. Although, it is often
thought to be a feature of hot and humid countries, it once thrived as far
north as the Arctic Circle and was once pervasive in the U.S. He mentions two
main causes leading to the decline of malaria in rich countries: economic
prosperity and medication. The draining of marshes led to less mosquito prevalence.
The increased presence of livestock led to mosquitoes biting more of them and
less humans. Better nutrition reduced people’s vulnerability to malaria.
Increased incomes led to better homes and better-maintained insect screens.
Medicine –
quinine derived from the cinchona tree from South America – was discovered in
the 1600’s but did not become widely available. The real medicinal breakthrough
came with synthetically manufactured chloroquine and the disease began to
decline drastically since 1945. The controversial insecticide DDT was also
instrumental in preventing millions of malaria deaths as it was applied to mosquito
nets. More than 4.5 million homes in the U.S were sprayed with DDT between 1947
and 1949. By 1951 malaria was considered eradicated in the U.S. Malaria still
raged in Southeast Asia and in Africa. Mosquitoes did develop some resistance
to DDT, but deaths still dropped dramatically in many places.
Malaria deaths outside of Africa today are
only about 30,000 annually. However, in Africa the malaria problem is much more
intense. There are two reasons for this: 1) the malaria parasite in Africa is
the deadliest form of it, and 2) the most common malaria mosquitoes in Africa nearly
exclusively bite humans. In addition to this, the malaria parasite began
developing resistance to chloroquine around 1978 and cases began to rise in
Africa. A new drug called artemisinin was developed in 1972 from the sweet
wormwood herb. It took time to catch on but in 2006 the WHO recommended it for
first-line treatment. Rapid diagnostic tests can diagnose malaria and patients
can receive artemisinin.
The other
important reason for malaria decline is the development and proliferation of
long-lasting insecticide-treated bed nets (LLINs). Nearly 220 million nets were
delivered to Africa in 2021. The nets protect humans, kill some mosquitoes, and
disrupt their lifespans. LLINs are very effective where malaria is endemic. During
the MDG years from 2000 to 2015 6.2 malaria deaths were averted. The SDG goals
include hopes to eliminate malaria (and many other diseases) by 2030 but we are
nowhere close to hitting those targets. Unfortunately, progress has been
stalled since 2015 and after Covid malaria deaths in sub-Saharan Africa, really
the main place it is so problematic, have actually risen or just slightly
declined.
One solution
is to scale up LLIN distribution. Just increasing them by 10% in the 9
highest-burden countries can save many lives. People also need to be educated
on the best ways to install and use them. As mosquitoes continue to develop
resistance to pesticides, some will need to be sprayed by different pesticides,
which cost a bit more.
The paper for
this chapter estimates that by 2030, LLINs can save 1.3 million lives. Less
people will get sick as well. This means higher productivity and more wealth
generation. The BCR given for increased use of LLINs is a very good 48.
6)
E-Procurement to Reduce Corruption
Corruption is
a huge problem around the world that takes funds away from solving problems. It
leads to lower employment and lower economic growth. It erodes government tax
revenue. Estimates, while difficult to establish, are that corruption costs
about $1 trillion annually. Government procurement is the major area of
corruption with the highest risk. Corruption is so entrenched that it is a
given for operating. It is most prevalent in low- and low-middle-income
countries, over 3 times higher (over 30%) than in high-income countries (10%). Bribery
is the major form. Cronyism is another form, where favoritism is the norm.
These all cut into government spending significantly. Total public procurement was
estimated at $15 trillion in 2018, or 14.5% of global GDP. In poor countries government
procurement can make up half of all public spending. Unfortunately, corruption
is so entrenched that it is considered by many to be a hopeless problem to
solve in great measure.
Again, with corruption,
there has been no progress since 2015 on the SDG goal to substantially reduce
corruption by 2030. Efforts have not succeeded. Rooting out corruption is often
blocked by powerful vested interests in governments and in the private sector.
There is one solution
that is promising for reducing corruption. That is e-procurement, simply making
procurement transparent by moving it online with safeguards against
manipulation. Many countries, particularly rich ones, have already implemented
e-procurement. E-procurement has other benefits as well. One is that it speeds
up the procurement process. This helped several countries deal better with
Covid. Better oversight and improved delivery of services are other co-benefits.
It also increases competition for government contracts, which can make services
more efficient and cheaper. It reduces advertising costs for governments. Bidding
and transaction costs for companies also drop. The researchers estimate that
only about half of government procurement can be digitized. This has to do with
projects involving national security having a need for secrecy.
E-procurement
does take time to implement. Two to four years of planning, designing, and
building are typically required to set up the system, along with a year of
piloting. Savings begin during the piloting stage and increase after that. Most
of the costs are upfront and most of the benefits begin in the third year and
increase after that. Unfortunately, the delayed benefits, even though
phenomenal when they come, have slowed adoption of e-procurement.
Not all e-procurement
systems are at the same level of detail. The study here identified four procurement
processes that can lower corruption when digitized: notification, access,
attestation, and submission. The BCR given for low-income countries is a very
good 38. The BCR given for low-middle-income countries, however, is an
astounding 309. This is because the costs of setting it up are not that much more
than for low-income countries, but the much higher volume of procurement
amplifies the benefits. In addition, these BCRs are only for the first 12 years,
even though the benefits continue.
7)
Nutrition
Ensuring
nutrition for children is most vital in a child’s first 1000 days from
conception. Undernutrition can be directly measured by stunting, which means
that children are short and underweight for their age. Stunting also means more
vulnerability to infections and often slow behavioral development. Stunting is
typically measured in children 5 years old and under. It has dropped around the
world throughout the 20th and into the 21st centuries,
but is still a problem in poor countries, particularly in Africa.
While the SDG
goal for malnutrition and stunting seeks drastically reduce it by 2030, we are again
behind that schedule. The policy paper for this chapter outlines three
proposals for tackling the problem. The first is supplements during
pregnancy. Iron and Folic acid are needs provided by WHO, but calcium
and micronutrients are often missing. Micronutrients include vitamins A, B1,
B2, B6, B12, D, and E, plus zinc, copper, iodine, and selenium. They are cheap
to provide. These supplements can reduce stillbirths, premature births, and low
birth weights. Micronutrient supplements have a BCR of 38, and calcium supplements
have a BCR of 19.
The second
proposal is promoting complementary feeding. This refers to
adding food to a children’s diet at about 6-months age, in addition to breastfeeding.
Lack of knowledge about childhood nutritional needs and poverty are the two
reasons this is a problem. Targeting the most vulnerable mothers and children can
have the greatest benefits at the lowest cost. Complementary feeding is given a
good BCR of 16.
The third
proposal is Small-quantity lipid-based nutritional supplements, or SQ-LNS.
SQ-LNS comes as a paste or spread in sachets. They have a much longer
shelf-life than perishable food. The packets contain essential fatty acids,
micronutrients, and proteins, and typically include vegetable oils, peanut
paste, milk powder, sugar, and added vitamins and minerals. The total cost,
including delivery, is $5 per child per month. Providing them to 41 million
children could prevent 155,000 annual child deaths as well as reduce stunting
significantly by as much as 1.5 million children over 18 months. The BCR for
this individual approach is 14, just under the threshold of 15 but combined
with the other policies the total BCR calculates to 18.
8)
Chronic Diseases
Over the last
few centuries, human deaths (in all countries), once caused mostly by
infectious diseases, are now caused mostly by non-communicable diseases, or chronic
diseases. These are often lifestyle related. Cancer and cardiovascular disease
are the most prevalent. The most prevalent killer, cardiovascular disease,
peaked in the U.S. in the late 1960s and early 1970s. In 2019 chronic diseases
killed 42 million people, about 75%, compared to only 14% of people dying from
infectious diseases. In terms of BCRs spending on chronic diseases will be less
effective than spending on infectious diseases. However, spending on certain
aspects of chronic diseases can still be very effective and cost-efficient. Deaths
from chronic diseases are increasing as people live longer from being spared by
infectious diseases, so the overall trend is one of success. The goal is to
force chronic diseases to kill as late in life as possible. The SDG targets for
chronic diseases are significantly behind aspirations. There are, however,
cost-effective policies that can extend the lives of people with chronic
diseases.
The policy paper
for this chapter proposes two categories of effective policies for chronic
diseases. The first category involves specific policies for specific chronic diseases.
The second category involves regulations and taxes as disincentives to overindulgence
in tobacco, alcohol, and salt. For the first category, they looked at 25
specific policies and found 8 with BCRs above 15. These are, from highest BCR
to lowest BCR as follows: 1) aspirin for suspected heart attack (BCR=63), 2) heart
failure chronic treatment (BCR=41). 3) early-stage breast cancer treatment (BCR
39), 4) epilepsy: acute and chronic treatment (BCR=32), 5) injection drug use
harm reduction (BCR=30), 6) depression: chronic treatment (BCR=23), 7) pulmonary
rehabilitation (BCR=21), and 8) cardiovascular: primary prevention (BCR=16). Number
2 includes treatment with “water pills” to help the heart pump by getting rid
of water and salt from the kidneys. Other drugs like beta-blockers continue to
successfully extend lives which is one of the main reasons for the drop in
deaths by cardiovascular disease. This has happened in the rich world but not
enough in the poor world. Blood pressure screenings and medications are a cheap
way to extend lives. Chronic depression is not as deadly but is a major factor
in lost work and lost productivity and is cheap to mitigate with medications.
In the second
category of disincentives a tobacco tax is one solution. Less people smoking
means less lung cancer as has happened in the U.S. It also means less problems
from other smoking-related diseases including heart disease, strokes, lung
diseases, diabetes, COPD, TB, and rheumatoid arthritis. Over a half million people
still due in the U.S. each year due to tobacco smoking. Globally, that number
is about 8.7 million, 1.3 million just from second-hand smoke. Tobacco regulation
and tobacco taxes can reduce those numbers, although smokers won’t like it. Regulations
on tobacco, alcohol, and salt refer to restrictions on advertising and
indulging in certain places. BCRs for disincentives include the following: 1)
tobacco tax (101), tobacco regulations (92), alcohol regulations (76), alcohol
tax (53), trans fat regulations (40), and salt regulations (36). Experiments
with salt reduction have yielded considerably less deaths from strokes. Processed
food is one culprit of excess salt intake. Other solutions below the BCR 15
threshold could also be helpful for chronic diseases. These include acute heart
failure treatment and other disease prevention and management solutions.
9)
Childhood Immunization
Childhood
immunizations have saved countless lives and will continue to do so. The goal
now is to get more coverage, especially in low- and low-middle-income
countries. Increased spending on children for vaccinations in poor countries
could still save a half-million lives per year. Vaccination skepticism has been
around since the beginning of vaccinations with smallpox, now a non-existent
threat. It is still a factor in reducing childhood immunizations. The UN estimates
that the MDG effort that expanded measles vaccinations prevented 15.6 million
deaths from 2000-2013. The Bill and Melinda Gates Foundation and their Gavi
Vaccine Alliance has been a major factor in expanding childhood immunizations
in poor countries. It is estimated that just the increase in vaccine coverage from
2000-2015 prevented 30 million deaths, or 2 million deaths per year.
Although the
lofty SDG goals declared the intention to eradicate many of these communicable
diseases by 2030, that is not at all likely, but we can do better with more
spending. Vaccinations dropped in some of the poor countries during Covid,
which slowed progress. This resulted in 25 million children under age 1 missing
vaccinations in 2021, compared to 6 million in 2019. Measles, diphtheria,
tetanus, pertussis, hepatitis B, and yellow fever are very rare in the rich
world but still too common in the poor world. Unfortunately, many of the most
vulnerable are in remote places with poor or no medical facilities or doctors which
increases costs to get the shots to them. Simple incentives like free food and
free transport can help get people to immunization camps and clinics. Even so,
the BCR in terms of lives saved can be great at 101. The annual spending for
these efforts is recommended to be increased to 41.7 billion.
10) More
Trade
Expanding
trade, aka. free trade, still has great potential to improve lives and lift
people out of poverty. While Lomborg acknowledges that there are downsides of free
trade (such as manufacturing jobs moving from centers in wealthy countries to poor
countries due to cheaper labor), he is adamant that the benefits of free trade
solidly outweigh the downsides. Free trade brings down costs for products which
give all countries, rich or poor, more purchasing power, especially the poor. One
downside is lost jobs in rich countries. Analysis shows that freer trade makes
everyone richer. It’s a win-win. Protectionism is not useful in most cases.
More trade brings more people out of poverty. Free trade brings down prices and
allows more businesses to tap into economies of scale, where fixed costs can be
shared more widely. It gives businesses bigger markets in which to sell. It can
also lead to the development of better products as competition forces quality
improvements to keep business. More free trade allows countries to grow their
GDPs. The evidence suggests that when tariffs go down incomes go up and there
is less poverty.
The SDG goals
for trade are to promote more trade under the World Trade Organization (WTO)
and to correct and prevent trade restrictions on agricultural products,
presumably to keep food prices lower. He notes there has been little increase
in global trade in the first 7 SDG years. Data shows that although global trade
in percent of GDP doubled from 1975 to about 2008 during the Great Financial
Crisis, since then it has been flat to slightly declining. Lomborg and his team
of economists explain all the pros and cons of free trade and why the benefits far
outweigh the detriments. While the BCR of more trade is a low number of 7 for high-income
countries that is still a decent benefit. For upper-middle-income countries the
BCR comes to 45. For low- and low-middle-income countries it is 95. Since so
much more trade is done by high-income countries, the BCR given for the whole
world for freer trade is 11. These numbers may be pessimistic, it is suggested,
and the actual BCRs may be higher. Even though wealthy countries benefit the
least and carry the highest costs, they still benefit. Again, free trade
especially benefits poor countries, so we should support it for that reason
especially.
11) Highly
Skilled Migration
Lomborg
reports: “Economic evidence shows that one of the best ways to reduce
inequality between nations is to allow workers to migrate to rich countries,
where they will be much more productive.” Unfortunately, migration is currently
a hot button issue in many parts of the world. Lomborg suggests a more moderate
solution: “Increase highly skilled migration by 10%.” This solution
supports the stated SDG goal of reducing inequality within and among countries.
Most inequality
efforts are focused on reducing it within countries, but it can and should also
be reduced among countries. Inequality among countries is expressed as global
inequality and is often measured by the Gini coefficient where 0 is no
inequality and 1 is absolute inequality. The Gini coefficient increased
steadily from about 0.5 to about 0.7 from about 1820 to about 1982. It then
stayed flat till about 2002. From 2002 to the present, it has dropped back to
0.6. First Japan, then spectacularly with China, then India led the change. In
2018 global inequality was as low as it had been in 1900. Even so, it is estimated
that there are still 657 million people living in extreme poverty. One solution
is simply to allow more people to move to where there are more economic opportunities.
Migration is a sensitive issue for many and
often politically divisive. Migrants are often seen as thrusting themselves
into a country where they are not welcome. That they are often aided by
criminal gangs who take advantage of them can make matters worse for all
parties. But the fact remains that migration both increases productivity and
reduces poverty. Studies actually suggest that opening up all countries to
unlimited migration could more than double global GDP. Of course, this is not likely
at all or even remotely feasible.
There are
labor shortages in many rich countries due in part to lower birth rates but
also due to the undesirability of some lower-paying jobs. Lomborg notes that
the wage differences from poor to rich countries is a strong incentive to
induce migration, even if criminal gangs and potential maltreatment make it
dangerous.
Of course, massive migration is wholly implausible
for a number of reasons. Studies also suggest that with massive migration wages
would increase drastically for the migrators but decline slightly for others in
the rich country to which they migrate. That is not likely to go over well. Over
time, however, wages would likely grow for both. Lomborg notes that the Copenhagen
Consensus met with significant opposition when it proposed higher rates of
migration in the past, a 20% increase per year which they calculated would
bring a BCR of 45. Toning that down, they are proposing here to just increase
skilled migration by 10% both globally and within Africa. Globally. They calculate
that more skilled migration has a good BCR of 20. In Africa, they mention the
benefits of young doctors migrating from poor to richer countries, with much of
their career ahead of them. This could potentially make the richer country’s
healthcare system more effective and more efficient by allowing more doctors to
specialize. Even so, the BCR calculated for more skilled migration within
Africa is much lower at 3.9. However, it would still be beneficial to allow and
promote it.
12) Land
Tenure Security
Property rights are taken for granted in rich countries, but the World
Bank estimates that 70% of people in the world have no access to land registration
systems. This makes life more stressful,
stifles economic development, and likely decreases agricultural output in
places where it is needed. People without secure rights to their land are far
less likely to invest in things like wells, irrigation, fertilizer, soil amendments,
and farming equipment to increase their output and profit. Many people expect
to one day be evicted from their land.
The need is
for more land to be surveyed and then registered with a system of land titles. Globally,
only about 30 countries have nationwide functional land administration systems
and fewer than a third maintain digital records (only two in Africa – Rwanda and
South Africa). More urban areas are mapped and registered than rural areas. In
OECD countries 97% of urban plots are mapped and 68% registered, with 71% of
rural plots mapped and 68% registered. Globally, just 46% of urban areas are
mapped, 24% of urban lands are registered, and rurally just 22% are mapped and
registered. Sub-Saharan Africa has the lowest mapped areas at 14%. The policy
paper for this chapter focuses on sub-Saharan Africa.
Rwanda began a
nationwide land registration project in 2007. They utilized aerial photography
and high-resolution satellite imagery. Agreed upon plot boundaries were then imaged
and registered digitally. Any disputed boundaries were given at least one month
for objection and if there were no objections they were titled. By 2013, the
country had demarcated 11.3 million land parcels out of an estimated 11.5
million in the entire country. There are still challenges in Rwanda, especially
among rural lands where land transfers are more informal. While land parcels
are registered, land transactions are often not registered, which is
problematic. This is mainly due to high registration fees.
Secure land
tenure tends to benefit women more than men in poor countries. Women make up
only 13% of agricultural land holdings. Unfortunately, no progress has been
made in the first few SDG years for land tenure security. Land tenure security
is beneficial for people but not so for governments and powerful people. Traditional
powers over lands by tribal chiefs and politicians would have to be
relinquished to varying degrees, so the problem is political as well as
economic. In addition to surveying and titling, there is a need for changes in
laws. The challenges are more difficult in rural areas. However, those areas of
less value and less likely to be contested, can be done with less precision, less
cost, and faster, with aerial photography and satellite imagery. These make up
the bulk of land. Higher value lands near urban areas that are more likely to
be contested will cost more than double to survey and register. Communal lands,
common in some of these African countries, can be mapped and registered together
and deeded to land-owning community groups. Slums in cities will likely take
longer to sort out and survey, but it can further slow their proliferation,
which already has been slowing in recent years.
Along with mapping and registering,
countries will need to develop better land administration services and better land
dispute resolution abilities. Costs also need to be kept low for landowners. Better
land dispute resolution can involve training and hiring more judges to move
through backlogged cases. Costs to keep the systems functioning well will have
to be paid but the potential benefits of more investment, more productive lands
with better soil conservation practices, higher yields and better profit for
farmers, and eventually cheaper and more abundant food, will far outweigh the
costs. These payouts will happen slowly but become significant over time. Rural
land registration in sub-Saharan Africa is given a BCR of 18. He does acknowledge
that that problems could drop the BCR a bit if rollouts don’t go well.
Urban land
tenure security is also very important. People want to rest assured that they
won’t be evicted from their homes. Simply put, people will continue to buy a
house they are surer they can keep. The return is better for urban home and
property owners with a BCR of 30.
Appendix – Benefit-Cost Analysis, Discounting, and
Value-of-Life
The goal of
benefit-cost analysis is simply to identify all the benefits and all the costs
and compare them. In practice this can be very difficult. Standards have been
developed for economic analysis in this regard. Costs are more straightforward.
Some are upfront costs, and some are operation and maintenance or management
costs that occur through time. Benefits tend to accrue over many years and can
be trickier to calculate. Predictions are partly based on past economic trends,
particularly in developing countries. He notes that in rich countries labor income
amounts to GDP per capita but in poor countries labor income can be twice GDP
per capita. This has to do with more GDP going back to capital in rich
countries while in poor countries there are many more young people and much
less capital. The researchers estimated changes in income throughout a young
person’s life to arrive at future benefits for countries and people.
Discounting is
used to make costs and benefits comparable by calculating the present-day value
of both costs and benefits. Figuring out a discount rate can be complex and
dependent on many variables. The World Bank suggests that a discount rate
should be about double a country’s projected GDP per capita. Studies suggest
the discount rate is lower in rich countries – between 3% and 5%. In poor
countries the estimate ranges from 6% to 12%. The authors here chose a rate
mostly based on the World Bank’s criteria to be 8%.
Determining
the value of a statistical life can be contentious and feel strange but is necessary
to benefit-cost analysis. This is sometimes given as the cost at which people
in an area or region are able and willing to pay to save one human life. As an
example, we know that lowering the freeway speed limit to 50mph or even 40mph
would save many lives, but it would not be well-received, and people are
willing to risk more crashes and deaths to get where they are going. We deem it
an acceptable risk. Risk is a strange thing to consider and involves many
factors from psychological to biological to economical. The value of a statistical
life in the U.S. is deemed to be $10 million. In the poor world there are far
more risks and far less resources to mitigate those risks. Poor people are able
and willing to spend far less on saving one human life for this reason mainly.
They take more risks because they must. They have no other choice. The authors
here came up with an average for low- and low-middle-income countries, i.e.,
the poor half of the world. This average is $128,000 for the value of a
statistical life. More specifically, they develop the value of a statistical
life based on age, coming up with a value of each saved life-year set at $4300.
This is known as Value of Statistical Life Year (VSLY). The researchers
strived to remain consistent with these values throughout the book. While
valuing lives in this way may seem random and crass, it can be very useful for
economic analyses, and it can lead to accurate predictions of future benefits.
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