How to Spend $50 Billion to Make the World a Better Place
Page 12
Low Birth Weight. Increases in the proportion of babies
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102 How to Spend $50 Billion to Make the World a Better Place of normal birth weight would have multiple benefits. In
particular:
r Saving lives. Although placing a monetary value on
human life is uniquely difficult, it has to be done to make an economic comparison. One method, used here, is to
use the resource costs of alternative means of saving a
life.
r Reducing costs of caring for newborn babies in hospital.
r Reducing health care costs for surviving LBW babies,
who have a higher incidence of illness than heavier
babies.
r Improved lifetime productivity, based both on better
physical development by adulthood and longer school-
ing/better learning ability.
r Reducing costs of chronic diseases associated with
LBW.
r Benefits to following generations. LBW mothers them-
selves give birth to small babies, continuing the cycle of disadvantage.
Taking all these into account, it has been estimated that the current value of actions that would result in one birth of a normal weight baby who would otherwise be LBW is $580.
Over half of this comes from increased productivity over
the child’s lifetime. This means that interventions that cost less than $580 per child affected would be justified in purely economic terms.
A range of relatively simple, and in many cases inexpen-
sive, actions has been suggested. These include provision
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Hunger and Malnutrition
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of antibiotics and anti-parasitics, insecticide-treated bednets to reduce malaria incidence and supply of iron/folate dietary supplements. For example, it costs $2 per patient to supply antibiotics to Ugandan women with sexually transmitted diseases. As well as the direct benefits of curing disease, for every hundred women treated, two cases of LBW
are prevented: a cost of $100 per case. Since each normal
birth of an otherwise underweight baby is worth $580, this has a benefit-cost ratio of 5.8.
In another study, dietary supplements of iron and folate
for pregnant women in Nepal prevented one case of LBW
for every 11 women treated. The cost of treatment in a large-scale program is estimated as $13 per patient, or less than $150 for each LBW birth prevented: a benefit-cost ratio of about 4. Of course, such interventions may also be justifiable on other grounds.
The key point with Opportunity 1 is that a number of
interventions have been shown to decrease the incidence
of LBW at a cost that is far below the estimated value of
the benefit received. This means that such initiatives are readily justifiable, even with significant changes to some of the assumptions made in the calculations.
Opportunity 2: Improving infant and child nutrition
and exclusive breastfeeding promotion
Nutrition in the first two years of life is second only to development in the womb in determining a child’s healthy
growth. Promoting breastfeeding in communities where
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104 How to Spend $50 Billion to Make the World a Better Place incomes are low and food and water supplies are often
contaminated can have significant benefits for childhood
development and lifetime productivity. The gains are sup-
plementary to those of Opportunity 1 and of a similar
magnitude. Costs of effective programs in place already
make such actions easily justifiable in economic terms.
For example, studies conducted in Latin American hos-
pitals show benefit-cost ratios for breast feeding promo-
tion of about 4 for typical interventions. Community-based growth promotion is also a promising intervention in some
environments.
Opportunity 3: Reducing the prevalence of iron
deficiency anemia and iodine, vitamin A,
and zinc deficiencies
Lack of iron not only has an influence on fetal and childhood development (and thus, for example, has a significant effect on the number of small babies born) but also has a direct
negative effect on the productivity of adults.
Iodine intake also is an important factor in determin-
ing birth weight. In addition, lack of iodine in childhood reduces brain development: A study has shown, for example, that iodine-deficient individuals score an average of 13.5 points lower in IQ tests.
Vitamin A deficiency can permanently damage eye-
sight, even causing blindness. Dietary supplements not
only decrease the incidence of blindness in children but
also reduce deaths and the severity of some illnesses. The direct benefits associated with the (relatively inexpensive)
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Hunger and Malnutrition
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provision of vitamin A supplements are mainly in terms
of this second category, reducing childhood mortality, but there is also a productivity gain during the lifetime of workers who would otherwise have been blind.
The benefits of zinc supplementation are to be seen in
reduced LBW and improved physical development in child-
hood.
Delivery of additional micronutrients can be by a variety
of routes. Flour fortification, supplementation with tablets, vitamin A as an addition to immunization programs, or even boosting iron by supply of iron cooking pots can all be cost effective ways of improving nutrition. Dietary interactions are complex, but an adequate supply of important vitamins
and minerals can make an important contribution to well
being at various stages of an individual’s life. As an example, many studies have been done on vitamin A supplementation
and it has been shown to be one of the most cost-effective medical interventions known, with a benefit-cost ratio of
over 140.
Opportunity 4: Investment in technology in developing
country agriculture
In an ideal world, all necessary nutrition should be obtainable from a readily-available, balanced diet. This opportunity therefore focuses on developing improved seed vari-
eties and agricultural practices that can enable people to grow higher and more consistent yields of more nutritious
food. This is not just a case of subsistence farmers grow-
ing more to eat: rather it is a question of more productive
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106 How to Spend $50 Billion to Make the World a Better Place farming which gives farmers a better return on their investment, increases demand for the labor of landless people,
and reduces the price of food to make it more accessible to both rural and urban populations.
The “green revolution” of the 1960s and ’70s is a clear
example of how modern plant breeding advances can be
&
nbsp; widely employed for the benefit of the poor. In this case, high-yielding dwarf varieties of rice and wheat have vastly increased the supply of staple foods in Asia and South
America. Similar advances could be derived using the best
technologies available now, including biotechnological
advances.
Returns on investment in this area are difficult to esti-
mate accurately, but studies have shown that the relatively modest up-front costs of plant breeding can be quickly
recouped, and that the benefits continue to accrue for many years until the seeds are displaced by the use of new varieties giving even higher benefits. Calculations on the economics of new cultivars with higher concentrations of micronutrients (for example, vitamin A precursor in “golden rice”)
indicate that benefit-cost ratios can be very high – in the region of 15–20 – even with very conservative assumptions on uptake and effectiveness. Investment in agricul-
tural technologies is the single most effective means of
increasing the incomes of those groups in the developing
world who suffer from chronic hunger.
Conclusions
Taking up the opportunities presented here would make a
major contribution to the welfare of the world’s poorest
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Hunger and Malnutrition
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people – the 800 million who are chronically undernour-
ished. Although this can be regarded as a good in itself, the clear evidence is that all of the approaches described are also economically justified in the sense that the projected benefits outweigh the costs.
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HUNGER AND MALNUTRITION
OPPONENTS’ VIEWS
The two opponent papers on hunger and malnutrition do
not question the basic analysis and opportunities proposed by Behrman, Alderman and Hoddinott in their challenge
paper. Instead, in rather different ways, they provide more discussion and insights to support the case for tackling this challenge.
Simon Appleton believes that Berhman et al have made
a very thorough and rigorous assessment of the problem
and proposed some important policy opportunities. While
acknowledging that it is a very broad issue, what he sees
missing in the paper is some discussion of how to reduce
poverty, which is intimately associated with malnutrition.
He also notes that famine is not dealt with, and wonders
whether famine relief might not be the basis for a fifth
opportunity.
Appleton suggests that the challenge paper authors
may have underestimated the benefits of reducing hunger,
first by only considering the direct costs of malnutrition and second by not including non-nutritional benefits (e.g., increased welfare of mothers treated to reduce the incidence of Low Birth Weight). However, Behrman et al were asked
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Hunger and Malnutrition
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to address a very specific topic, and were probably quite
justified in trying to keep a narrow focus.
Another criticism is that no weighting is given to where
the benefits are received: In general, a given benefit will have a greater impact on those most in need. Taking this into
account, the third opportunity – micronutrient supplemen-
tation – should be given a higher priority because vitamin and mineral deficiencies are concentrated in the poorest
sections of society. More generally, Appleton suggests that the challenge of hunger and malnutrition should be given
higher priority than challenges which are less connected
with poverty, such as financial or trade liberalization.
In Appleton’s opinion, the challenge paper also puts too
low a monetary value on lives saved. Valuing life is always very difficult, and there is a case for considering lives saved in a separate category from economic benefits when prioritizing challenges. In any case, this factor also contributes to an underestimation of the benefits afforded by the opportunities.
To set against this, the authors have used rather frag-
mentary and partial evidence to support their findings, for example, by extrapolating data from the USA and UK to
developing countries. This gives the benefit-cost ratios a greater level of uncertainty, but there is no apparent systematic over- or underestimation.
The final point made by Appleton is that benefit-cost
ratios are quoted for a number of individual interventions, but there is no aggregate ratio for each opportunity. This he believes is necessary if the Copenhagen Consensus experts
are to be able to prioritize the challenges properly. He
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110 How to Spend $50 Billion to Make the World a Better Place therefore makes his own benefit-cost ratio estimates as
follows:
1. Reducing the prevalence of Low Birth Weight
4
2. Improving infant and child nutrition
3
3. Reducing micro-nutrient deficiencies
36
4. Agricultural research and development
15
Peter Svedberg takes a very different approach in his com-
mentary. In his words, Behrman and co-authors “exude
optimism” about coping with childhood malnutrition. He
also believes there are further causes for optimism: availability of cheaper and better medicines and better targeting of combined nutrition and health programs. Any interventions that improve health also will certainly have a beneficial effect on nutrition.
Svedberg shares Appleton’s views on the intimate links
between malnutrition and poverty. He looks at length at
the empirical evidence, noting, for example, that over half the variation in childhood stunting between countries is
accounted for by differences in income. Richer households
not only have the money to feed themselves better, they also provide more revenue to governments that can be used to
alleviate hunger.
He goes further in trying to understand the root causes
of hunger in developing countries, noting that there are significant differences in the extent of malnutrition between countries with the same income per head. His conclusion
is that it is institutional and infrastructure problems that fail to deliver new treatments to those in need: there must
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Hunger and Malnutrition
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be effective channels and trained personnel for these to be delivered.
The lack of effective infrastructure can be compounded
by endemic corruption. Many of the countries with the
worst malnutrition problems score very low on the cor-
ruption index published by Transparency International
(an NGO). These low scores represent “deep-rooted and
widespread corruption at most levels of society.” Under
these circumstances, even well-targeted programs are
unlikely to succeed. Even worse is the political indifference shown by some regimes to the suffering of their people.
Overall, Svedberg is much more pessimistic than
Behrman et al about likely progress in meeting this chal-
lenge in the short- to medium term. He thinks there is little hope of meeting the Millennium Development Goal of halving the prevalence of child under-nutrition over the next ten years. This view highlights the degree of interrelationship of many of the challenges: Programs have a low chance of success unless the country targeted is peaceful and not corrupt, and sustained, long-term improvement will not occur without significant progress being made in poverty reduction.
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PHILIP MARTIN1
7
Population and Migration
Description of the challenge
For most of human history, migration has been constrained
by physical barriers and transport difficulties rather than government action. More recently, sharply different rates
of population and economic growth across the world have
combined to make many workers from poorer countries
eager to move to countries where more jobs are available
and wages are much higher. Modern communications make
the differences even more visible, and modern transport
makes migration easy and affordable. But migrants are not
always welcome in rich countries.
In an ideal world, such economically motivated migra-
tion would benefit migrants, increase global GDP and pro-
mote economic convergence between rich and poor coun-
tries. After a time, this would reduce the pressure to migrate.
The challenge addressed in this chapter is ensuring that the migration that occurs promotes equality.
1 University of California, Davis.
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114 How to Spend $50 Billion to Make the World a Better Place Global economic convergence is a goal supported by