Here’s something I rarely write about: a situation in which unpredictable, seemingly irrational policies saved millions of the poorest and most vulnerable people on earth.
In a recent Blog post, Justin Sandefour, Senior Fellow at the Center for Global Development, a Washington, DC-based think tank, reviewed the report on the President’s Emergency Plan for AIDS Relief, or PEPFAR. This program, launched by President George W. Bush, paid for antiretroviral drugs for millions of HIV-positive people in sub-Saharan Africa and the Caribbean and is now considered one of the most important foreign aid efforts in American history. for his generosity and efficiency.
His installation was contrary to the advice of many experts of the time.
“Traditionally in health economics, it was thought that shipping AIDS drugs to Africa was a waste of money,” writes Sandefur. It wasn’t that the drugs didn’t work: antiretroviral therapy had revolutionized the fight against HIV/AIDS and could save the lives of infected people and prevent new infections. But the drugs were extremely expensive, so experts thought it would be more efficient to spend aid dollars on prevention instead. Money spent on condom distribution, awareness campaigns, or antibiotics to treat bacterial infections that increase the chance of HIV transmission is estimated to save more lives per dollar than treatment.
In the now infamous 2005 Forbes Op Ed titled “HIV Treatment Doesn’t Pay” by Emily Oster, a Brown University economist who is now best known for her parenting decision guidewrote that “as cold and heartless as it sounds, after comparing the number of years saved by antiretroviral drugs with the years saved by other interventions such as education, I found that treatment is not an effective way to fight the epidemic.”
She, like many other economics experts, suggested that politicians operate with two constraints: a global health catastrophe on a massive scale, and a limited budget to deal with it. And since it was much more expensive to treat existing patients with HIV-AIDS than it was to prevent new infections, the grim conclusion was that the best way to save as many lives as possible was to focus on prevention, even though that would effectively mean letting infected people die.
As it turns out, this argument was based on an erroneous assumption. In fact, the Bush administration was willing to find money for treatment that would otherwise never have been spent on prevention.
The Bush administration has been the target of constant political lobbying by interest groups and activists such as U2 frontman Bono and Rev. Franklin Graham’s son. Billy Graham Their argument was primarily moral rather than economic, and they emphasized the plight of people in need of treatment. They argued that if antiretrovirals existed, it would be wrong for the richest country in the world to let poor people die.
It so happened that the question was No the question of whether the dollar was most effectively spent on treatment or prevention, but would treatment or prevention be the most politically persuasive argument in favor of get more dollars allocated. And in this last question, treatment unconditionally won.
Bush created PEPFAR, a new multi-billion dollar program to fund AIDS treatment in poor countries. And in the end, not only did it save lives, it also cost less than the original cost-benefit analysis suggested. Over the course of the program, the cost of HIV treatment dropped rapidly, a change that may have been partly due to the fact that PEPFAR created a new demand for drugs, especially for cheaper generic drugs that appeared a few years later.
Sometimes the most effective is not the most effective
When I asked Sandefur about the general lessons, he said that sometimes an efficient and easy-to-implement solution can be the best choice, even if it conflicts with a cost-benefit analysis.
“Close to home for me, working a lot on education, school meals, which I think has proven to be quite effective,” he said. “They help kids learn. They help to attract more children to school. And they clearly help with nutritional outcomes.”
But programs such as India’s midday meal program, which feeds more than 100 million schoolchildren daily, often fall short of cost-benefit analysis because other programs are seen as a more effective way to improve learning outcomes.
dominance over science
The PEPFAR case also carries another lesson: sometimes politics is more important than economics.
AIDS treatment advocates include evangelical groups with great political influence in the Republican Party. Having Franklin Graham on the phone with Bono probably made it easier to get the attention of the Bush administration, but also lowered the political cost of spending US government money on a massive new foreign aid program.
From the point of view of political science, saving the lives of HIV-AIDS patients had a great “visibility”: the activists were emotionally connected with the cause, making it a priority for themselves.
My anecdotal experience definitely confirms this: I was a student at the time, and I remember many passionate arguments between my classmates about how best to treat people in poor countries. I’m sure if they were asked they would all support preventive measures as well, but their energy was not focused on that. Much of the excitement and urgency of the people has centered on the problem of delivering drugs to people who would otherwise die. It looked like an emergency.
So perhaps the biggest lesson here is that politics is not, after all, separate from politics. And this means that the political costs and benefits often outweigh the economic ones, even if this may seem irrational.
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