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5731 results in Natural resource and environmental economics

Page 88 of 287

  • 19 - Benefits and Costs of the Gender Equality Targets for the Post-2015 Development Agenda

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 339-363

  • Summary

    Introduction: The Current Situation and the Millennium Development Goals (MDGs), What Has Been Achieved?

    Women in the developing world are the ones that suffer the most from poverty, poor health, lack of education, unequal rights, and violence. Remarkable progress has been made in some areas, aided by some of the MDGs, but there is still a long way to go. This chapter reviews the goals and targets relating to gender equality in the UN High Level Panel's (HLP's) “A New Global Partnership” and makes recommendations for the post-2015 development agenda.

    Education

    The third MDG was specially targeted to achieve gender equality and the empowerment of women. The main target of this goal was to eliminate gender disparity in primary and secondary education. The gender gaps in primary school attendance have been reduced, but access to secondary and university-level education still remains highly unequal.

    Figures 19.1, 19.2, and 19.3 plot the female-tomale ratio in enrollments corresponding in primary, secondary, and tertiary education. Differences in enrollment in primary education have decreased in all regions, but sub-Saharan Africa, the Middle East, and North Africa are still lagging behind. The picture for enrollment in secondary education is not that positive, differences have been reduced somewhat but at a lower speed, and sub-Saharan Africa and South Asia are regions that are falling behind. In regard to tertiary education, the reduction in inequality has been very minor everywhere.

    Employment

    The first MDG includes the target of achieving full and productive employment and decent work for all, including women and young people. According to UN estimates, due to the global financial crisis, both male and female labor force participation rates decreased slightly between 2000 and 2012 (73.8 to 72.7 percent and 48.6 to 47.9 percent, respectively). Figure 19.4 shows the female-to-male labor force participation rates by region between 1989 and 2011. From the graph, it looks like the gender disparity has not decreased much, and disparities are still large in South Asia, the Middle East and North Africa.

  • 3.2 - alternative perspective

    • By Carolyn Fischer, Senior Fellow and Associate Director, Resources for the Future
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 66-66

  • Summary

    Although concurring with some of the broad conclusions of the challenge chapter, there is no scientific consensus that a limit of 450 ppm of CO2 does not pass a cost-benefit test; in fact, broad political consensus implies that limiting temperature rise to 2°C is cost effective. Neither are annual emissions caps inherently costly, depending on the policy measures used to achieve them. Overall, bringing fossil fuel prices more in line with their social costs necessarily produces greater benefits, which suggests that negotiating higher and converging carbon prices may hold more promise than trying to agree on quantity targets.

    Any policy portfolio that focuses primarily on R&D and/or renewable energy deployment is inherently more costly than one that incorporates a fundamental role for carbon pricing, which encourages the use of all abatement options. To avoid costly delay in taking action on mitigation while waiting for international agreement on emissions targets, we should immediately work toward aligning the prices of emitting energy sources with their social costs – removing fossil fuel subsidies, using market-based mechanisms to regulate conventional air pollutants, and pricing carbon.

    Galiana cites a few studies, which find that even less-ambitious stabilization targets than 2are unlikely to be cost effective in a conventional analysis. However, models are limited in their ability to estimate the full range of potential costs and do not necessarily take account of possible catastrophic damage caused by uncertain events. Neither can modeling address the ethical and distributional effects of climate change. Environmental justice argues for an even lower target, for example, to protect vulnerable small island states. In contrast to the challenge chapter, the IEA emphasizes the feasibility of meeting climate goals cost effectively with existing technologies.

    Bringing down the cost of low-carbon technologies – or even finding breakthrough technologies – has many advantages, particularly in a worldreluctant to take costly measures to reduce emissions. If low-carbon energy sources can become cost-competitive on their own, they will naturally displace fossil-based sources. This is particularly relevant fo r developing countries, which could then decarbonize without sacrificing growth.

  • Chapter 23 - Global Benefits and Costs of Achieving Universal Coverage of Basic Water and Sanitation Services as part of the 2030 Agenda for Sustainable Development

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 422-445

  • Summary

    Water is covered as a single issue in Sustainable Development Goal 6, as well as other SDGs such as disaster risk reduction, education, health, nutrition and gender. (UN-Water 2016a). Six targets are included in the water goal. Although global costing and cost-benefit studies have been previously conducted (Hutton and Varughese 2016, Hutton 2012), and a more recent study examined the approximate costs of an overall water goal (UNU and UNOSD 2013, UN-Water 2016b), a new study is required to understand the overall economic returns on expanding and sustainably operating WASH services according to the new service definitions and target dates, as well as the extent to which additional financing can be sourced. This study confirmed that drinking water supply and sanitation both generate high economic returns to society, with returns exceeding costs for all interventions at both 3% and 5% discount rates. The study showed that economic returns varied between different regions of the world. This variation is partly expected due to different relative price levels of water and sanitation services, and different capacity to benefit (such as existing disease rates). The variation is also likely to be due to weak data for some regions and countries (e.g. unit costs of services for Central Asia, Oceania, North Africa, Western Asia and developed countries).

  • 24.2 - alternative perspective

    • By Valerie Kozel, Associate Adjunct Professor, University of Wisconsin–Madison, USA
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 474-474

  • Summary

    Summary

    The Copenhagen Consensus Center's initiative to sponsor “hard-nosed” assessments of the economic costs and benefits of proposed goals and targets, along with the strengths and weaknesses of data and methodologies to monitor progress, is providing welcome contributions to ongoing discussions. The chapter from John Gibson raises three questions: Do the proposed poverty targets strike the right balance between breadth, idealism, and realism? Is it appropriate to focus solely on extreme poverty ($1.25 a day)? and Are data and monitoring methodologies sufficiently robust and wellspecified to carry the debate forward?

    The proposed post-2015 Sustainable Development Goals are a broader and more ambitious set of development goals than the previous MDGs. The call to eradicate poverty “in all its forms everywhere” is very ambitious. None but the most idealistic believe that this goal – or the other SDG zero-goals – are possible to achieve. Gibson points out some of the underlying features of rapid poverty reduction in the past that are not likely to carry forward into the future. There is one important additional factor that may slow the pace of future poverty reduction: as policies and programs become more narrowly targeted and concentrate on groups that have been socially excluded or are discriminated against, they may not have widespread political support.

    Although the proposed targets have been criticized as being too ambitious, others argue that the $1.25 a day poverty line is not ambitious enough and has no relevance for middle- and upperincome countries. By this reckoning, a set of (higher-order) goals is needed that better capture the rising aspirations that all countries have for the well-being of their citizens. We take the view that “stretch” goals have an essential role in post-2015 SDG discussions. Reducing global poverty, as defined using a truly global standard that reflects standards that apply in all countries, would be an additional such goal to put alongside the proposed zero target for extreme poverty. Taking out the billion people in extreme poverty, and the billion who are prosperous by global standards, leaves five billion who are poor by standards of rich countries but not poor by the standards of the very poorest countries.

  • Chapter 2 - Targets for Biodiversity and Deforestation

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 38-53

  • Summary

    This is a first attempt at estimating benefit-cost ratios for the biodiversity and deforestation targets. Benefits in particular require more analysis. Also, the potential linkages between different targets need to be examined. The two most promising targets investigated in terms of benefit-cost ration are ÒBy 2030, stem the loss of coral reefs by 50%Ó, which has a BCR of 95.3 and ÒReduce global forest loss by at least 50%Ó, which has a BCR between 29.7 and 99.4.

  • 9.1 - alternative perspective

    • By Bernard Hoekman, Robert Schuman Chair and Research Area Director of Global Economics, European University Institute, Italy
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 216-216

  • Summary

    Summary

    Anderson points out that global trade has grown strongly since 1990 and has been accompanied by rising real incomes. However, although average incomes in the East Asia and Pacific region have risen more than 1500 percent since 1960, the rise has been just 30 percent in sub-Saharan Africa. Economic policies that increased the costs of trade have been an important factor in this disappointing performance. Anderson, in his chapter, makes a compelling case for the large welfare benefits that could come from liberalizing trade in the Asia-Pacific region in the absence of a global agreement on the Doha Development Agenda, but it would seem important to include consideration of reforms that encompass developing countries in the rest of the world.

    Analysis shows that many developing countries impose import restrictions, which are generally much higher for agricultural produce and that nontariff measures (NTMs) represent a substantial share of merchandise trade barriers. Barriers to trade in services are also on average substantially higher in emerging economies than OECD countries. This makes it important to consider reductions in NTMs and service trade restrictions as well as tariffs and trade-distorting agricultural support policies in the assessments of gains from trade reform. The DDA therefore only partially captures the potential net benefits of global trade reforms.

    Although there is scope for widening and improving the DDA, it has delivered one positive outcome that will generate large net benefits: the Bali Trade Facilitation Agreement (TFA). Full implementation has been estimated to reduce average trade costs in developing nations by about 10 percent, which will generate large welfare gains.

    Overall gains from raising trade facilitation performance to even half that of global best practice could increase global GDP by 5 percent, six times more than removing all remaining import tariffs. Higher implementation costs would mean BCRs are lower than for tariff reform and subsidy reduction, but the overall benefits would be far greater.

    Trade is not and should not be a goal in itself. Instead the focus should be on enhancing opportunities for firms to use trade and enhancing the real incomes of consumers in developing countries. Current goals proposed for the post-2015 agenda have a mercantilist focus on exports as opposed to trade overall. Imports can benefit local firms by providing inputs needed for exports, reducing prices, and improving the quality of goods on the domestic market.

  • Chapter 21 - Benefits and Costs of the Population and Demography Targets for the Post-2015 Development Agenda

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 375-398

  • Summary

    Prioritizing the Post-2015 UN Development Agenda on Population and Demography requires a recognition that national demographic trajectories are currently more diverse than in the middle and late 20th century. Wealthy countries of Europe, Asia and the Americas face rapid population aging, while Africa and some countries in Asia prepare for the largest cohort of young people the world has ever seen. And many of the world’s poorest countries, particularly in sub-Saharan Africa, continue to face premature mortality, high fertility and often unmet need for contraception. The goal of this chapter is to discuss the Post-2015 Development Agenda in the area of Population and Demography, focusing primarily on aspects of population size, age structure and geographic distribution. Within population and demography, the priorities that have the highest benefit-cost ratios are: ● Achieving universal access to sexual and reproductive health (SRH) services by 2030, and eliminating unmet need for modern contraception by 2040. ● A reduction of barriers to migration within low- and middle-income countries, as well as between low- and middle-income countries and high-income countries.

  • 19.2 - alternative perspective

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 366-366

  • Summary

    Summary

    Clots-Figueras addresses all of the relevant post- 2015 goals and reports on the most recent relevant experimental results having to do with explicit benefit-cost ratios (BCRs) for this gender-related research. However, the evidence base is restricted to experimental papers. This perspective suggests different views regarding how to measure and assess evidence regarding BCRs. This includes addressing the question of what elements are preconditions and what events are actually more likely to occur if economic situations for women are improved.

    The chapter ably demonstrates the advantages and limitations of benefit-cost analysis. It raises important questions such as whether the BCR should be seen as a lower bound because of the large, unmeasured spillover effects. For genderrelated outcomes in particular, it is unclear what the range of effects may be and whether they are all desirable. Increasing women's participation in the labor force, for example, is not necessarily an end in itself and may have other outcomes, some of which could be undesirable.

    Project-specific BCRs may also not scale up to society-wide policies. For example, educating too many people to fill the number of higher-level jobs available or providing microfinance to a start-up in an already crowded market may not be beneficial. On the other hand, small-scale studies could also underestimate the larger societal impact of policies. For example, a more educated population may lead to more efficient institutions and more efficient interactions with others.

    There are, however, other options. For instance, take a set of countries (or a pair of countries) that have different levels of social spending on a particular matter of interest, such as women's healthcare. We can then compare the different outcomes for such standard indicators as maternal mortality, infant mortality, and other health outcomes for both women and others (especially children). Combined with calculations of the monetary value of a DALY, this can then lead to a BCR calculation.

    Some of the most interesting historical examples involve two neighboring countries, often with a common cultural heritage, that then separate in terms of their social policy at some critical juncture. The division of Germany after WWII is a case in point; reunification showed how re-equilibration then occurred. Countries in different locations but with a common cultural background – Australia, the United States, and the UK, for example – provide other useful comparisons.

  • 25 - Good Governance and the Sustainable Development Goals: Assessing Governance Targets

    • By Mary E. Hilderbrand, Associate Professor of the Practice, George H. W. Bush School of Government and Public Service, Texas A&M University, USA and Faculty Affiliate, Center for International Development, Harvard University, Massachusetts, USA
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 475-496

  • Summary

    Introduction

    Governance and institutions have been among the focal themes of planning for the post-2015 global agenda. The High Level Panel on the Post-2015 Development Agenda named building “peace and effective, open and accountable institutions for all” as one of “five big, transformative shifts” that its members saw as necessary for a new global development agenda (United Nations, 2013). The Secretary- General's report on the post-2015 agenda laid out six “essential elements” for integrating the numerous potential goals and targets: dignity (ending poverty and fighting inequalities); people (human development); prosperity (economic development); planet (environmental protection and climate change); partnership (global solidarity); and justice (promoting “safe and peaceful societies, and strong institutions”; United Nations, 2014b, italics mine). Thus, in contrast with the Millennium Development Goals (MDGs), the quality of governance and institutions is given a prominent place on the new global agenda.

    The focus on governance comes from two different perspectives. Some assessments of performance on the existing goals have blamed poor governance when results were disappointing, suggesting that improving governance is essential for making further progress (or sustaining progress) in areas such as poverty reduction, health, education, and water and sanitation. This view, then, sees governance and institutions as necessary means to get results on other development goals. Another perspective is that “good governance,” especially components such as participation, transparency, inclusiveness, and access to justice, is a part of development itself; thus, good governance is seen as a development goal to be pursued for its own sake, not just as a means to enable economic development. Both perspectives are reflected in the United Nations (UN) statements on the post-2015 agenda.

    Setting goals and targets for governance and institutions is difficult, and there are many problems and challenges associated with doing so. Whereas there is broad agreement that “good governance” (however that is defined) is preferable to poor governance, there is considerable disagreement over whether establishing specific goals and targets will lead to meaningful improvements in governance. If the motivation is based on the argument that governance is necessary to reach other goals, what do we actually know about the relationship between governance and development? If improving governance is important – whether as ends or means – is including it in the development goals likely to elicit the desired improvements? Setting targets implies being able to measure progress. Can we do that?

  • 25.2 - alternative perspective

    • By Matt Andrews, Edward S. Mason Senior Lecturer in International Development, Harvard Kennedy School, Massachusetts, USA
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 499-500

  • Summary

    Summary

    I start from a position of skepticism of the value of having post-2015 goals at all and even more of including governance in such a set. Global-level statistics on the MDGs appear quite accurate, and progress in some areas is used to support the argument for such global goals. However, there is great variation at the national level, with one study, for example, showing that about 50 percent of countries are on track to meet extreme poverty, gender, child mortality, and water goals, but less than 30 percent are on track to meet hunger, maternal mortality, and HIV/AIDS goals.

    I draw several key lessons when considering this kind of evidence. First, higher growth countries did better in meeting MDG targets than lower growth countries, which could suggest that the development community should focus on fostering economic growth instead of promoting a new set of targets. MDG success is contextual and deeply affected by a country's social and economic situation. Second, progress has been greatest in areas where measured performance captures (mostly) logistical improvements. Building more schools and laying water pipes are largely technical exercises. Progress on sanitation issues, on the other hand, has arguably been slower because the logistical component involves more complex political and social interactions.

    A third lesson is that because targets focus on parts of the development process that can be seen and quickly assessed and not on the harder to see (and to do) and longer to achieve parts, there are likely to be large gaps between form and function (where performance only looks better). Many of the best-performing MDG countries now have many schools and high enrollment rates in schools, for instance, but also experience severe shortages of teachers and textbooks and major gaps between enrollment and achievement. There are also gaps within countries between rural and urban areas: the fourth lesson is that goals and targets can bias performance to easier concentrated urban areas, creating a gap between performance in these locations and the more distributed local, rural settings. A final lesson is that targets encourage promises – of budgetary priorities in particular – that often do not lead to actual follow-through, creating an execution gap that is not easily closed.

  • 5.2 - alternative perspective

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 118-118

  • Summary

    Summary

    This perspective takes a look at three questions relating to the provision of more data via surveys. First, we ask whether surveys in poor countries have produced results, second, what types of users demand what types of data, and third, how much it would cost to close the remaining gaps in household survey provision.

    The International Household Survey Network (IHSN) database provides the most comprehensive information on surveys and censuses in low- and middle-income countries. The pace of survey data collection has accelerated rapidly across all regions, as has the trend toward making data open. Poorer countries actually produce significantly more household surveys each year and are more likely to put their data into the public domain.

    The demand for such data, and also for it to be openly available, is likely to come from citizens and international aid donors, and the evidence tends to support this. Countries receiving more foreign aid tend not to conduct more household surveys but are somewhat more likely to publish open data. More democratic countries are also more likely to publish their data.

    Jerven estimates a figure of $1 billion a year to produce an adequate data package to cover the MDGs. This seems to us to be a reasonable approximation, but what it neglects is that many of the middle-income countries included are wealthy enough to fully fund their own statistical services. Countries such as Kuwait, South Korea, and Chile, for example, are included in the figure. Recognizing the need for socioeconomic data, we would expect international development assistance to fund a substantial fraction of statistical costs for countries below a cutoff level and only a small share of costs above that level.

    The cut-off point should be somewhere in the range of $2,000–5,000 GDP per capita. Total data package costs would be $275 million for the lower limit or $510 million for the upper one. Thirty-six out of 52 countries with GDP per capita below $2,000 are in sub-Saharan Africa, and total annual survey costs for this region would be $276 million. We therefore suggest that the total amount of international aid needed to support this basic survey program is about $300 million. We should note that IDA already provides a substantial proportion of the funds, so the $300 million does not represent a marginal increase in aid required, but a total figure including some current funding.

  • 5.1 - alternative perspective

    • By Deborah Johnston, Reader in Development Economics, School of Oriental and African Studies, University of London, UK
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 117-117

  • Summary

    Summary

    There is clearly an existing problem with development data provision. For example, even population figures may be uncertain because of undercounting of some groups in society, and changes to the statistical basis of GDP estimates can make large differences. Ghana became a middle-income country overnight when its estimated GDP doubled in this way.

    Food and Agriculture Organization (FAO) data on undernutrition – on which many poorer countries rely in the absence of official national statistics – has also been shown to be prone to significant errors.

    This matters because the post-2015 agenda is likely to have a far greater monitoring burden, and Jerven has shown convincingly that paying for a full set of development data is not feasible. The second issue is that, even if it was available, throwing money at the problem will not solve it. The problem of lack of statistical capacity is hard to solve, and the chapter also points out the opportunity cost. The Partnership in Statistics for Development in the Twenty-First Century (PARIS21) group estimates that there has been an increase in data-gathering exercises in Africa because of the MDGs, but a shift away from surveys not closely geared to them. As Jerven correctly argues, macroeconomic, labor, and agricultural statistics have suffered in particular.

    This chapter is a groundbreaking attempt to delineate the issue, map the extent of the problem, and make recommendations; essentially it is a wake-up call to the development community. It makes several important contributions, the most important of which is its careful enumeration of the costs of monitoring theMDG indicators. This quantification is extremely powerful in showing the need for prioritization of targets and indicators – and so is highly complementary to the Copenhagen Consensus exercise.

    Because there is not yet a definitive list of targets and indicators, a precise costing is impossible, but the chapter usefully lays out the likely minimumdata requirements. However, the cost of data analysis and utilization is excluded from these estimates, and this is, of course, a necessary requirement for the information to be debated by politicians and the public.

  • 18 - Returns to Investment in Reducing Postharvest Food Losses and Increasing Agricultural Productivity Growth

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 322-336

  • Summary

    The 2008–2011 food price spikes brought the issue of postharvest losses (PHL) back to the forefront of policy debate, and observers are again calling for a reduction in PHL as a tool to feed the expanding global population. Food losses due to improper postharvest handling, lack of appropriate infrastructure, and poor management techniques have once again become a matter of serious concern. Food losses, defined as “any decrease in food mass throughout the edible food supply chain,” can occur in any point of the marketing stages–from production (e.g., crop damage, spillage), postharvest and processing stages (e.g., attacks from insect or microorganisms during storage), distribution, and retail sale until home consumption (e.g., spoilage, table waste; Rosegrant et al., 2013). Kummu et al. (2012) suggest an additional 1 billion people could be fed if food crop losses were halved, which could potentially relieve some of the pressure on the significant increase in production that would be required. Achieving lower levels of food losses, however, requires both investments in technologies that help prevent losses as well as in overall infrastructure. Understanding the magnitude of these investments and their impact is key to establishing that a reduction in PHL has, in fact, an impact on food security.

    Seeking to better understand the levels of investment required to effectively reduce PHL requires several steps. First, it is necessary to understand how infrastructure impacts losses. The second step is to quantify the levels of investments required. Third, a cost-benefit analysis of the required infrastructural investments is done to assess economic returns to PHL reduction. Results are subsequently compared to investments in agricultural research and development.

    Overview of the Postharvest Loss Debate

    A large number of papers have been published focusing on four aspects of PHL: (1) estimates of the magnitudes of losses, (2) the economic impacts of losses in general but also on the poor and the hungry in particular (Gómez et al., 2011), (3) alternatives to decrease losses through the use of both new and traditional technologies, and 4) the economic costs of losses as well as their remedies.

  • Conclusion

    • By Finn Kydland, Nobel Laureate in Economic Science, Henley Professor of Economics, University of California, Santa Barbara, USA, Tom Schelling, Nobel Laureate in Economic Science, Nancy Stokey, Frederick Henry Prince Distinguished Service Professor in Economics, University of Chicago, Illinois, USA, Bjorn Lomborg, Prague, 2018
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 501-507

  • Summary

    Over the next 15 years the Global Goal targets examined in the research section of this book will help to direct somewhere in the region of $2.5 trillion to be spent on development assistance, as well as countless trillions in national budgets. As the members of the Eminent Panel that examined the research and made recommendations on the proposed targets, particularly in terms of value-for-money, we believe that it is important that those making funding decisions have access to information on costs and benefits.

    A natural political inclination is to promise all good things to everyone. This, in no small part, is how the United Nations ended up with 169 targets. All are well-intentioned.

    However, the analyses presented in this book demonstrate that some of the targets are less worthwhile, producing only a little more than $1 in social benefits per dollar spent, while others produce much higher social returns. After careful consideration and engagement with the research authors, we selected the 19 targets that we expect to produce the greatest benefits.

    The analyses suggest that if the United Nations (UN) concentrates on these top 19 targets, it could achieve $20 to $40 in social benefits per dollar spent. In contrast, allocating it evenly across all 169 targets would reduce the figure to less than $10.

    Targets that will help people directly through health benefits are worth championing. As we read about in Chapter 13, tuberculosis (TB) is a “hidden” disease. More than two billion people carry the bacterium that causes it. About 10 percent of those people will develop TB at some point, and about 1.5 million people each year die from TB. But treatment is inexpensive and, in most cases, highly effective. Spending a dollar on diagnosis and treatment is a low-cost way to give many more years of productive life to many people. Ebola and Zika may receive the headlines, but TB is a much bigger problem, and one that we recommend receives high priority.

    Reducing childhood malnutrition, described in Chapter 20, is another excellent target. A good diet allows children's brains and muscles to develop better, producing lifelong benefits. Wellnourished children stay in school longer, learn more, and end up being much more productive members of society. The available evidence suggests that providing better nutrition for 68 million children each year would produce over $40 in long-term social benefits for every dollar spent.

  • 22.1 - alternative perspective

    • By Kamal Saggi, Professor of Economics, Vanderbilt University, Tennessee, USA
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 419-419

  • Summary

    Summary

    Saggi finds that the Maskus chapter provides a clear and convincing analysis of his chosen policy initiatives and there is little he disagrees with. Productivity is perhaps the most important determinant of a country's living standards in the long run. It can either continue producing the same with fewer resources or invest in R&D that delivers new or better products. In principle, developing countries could use the fruits of foreign R&D, but in practice conducting domestic R&D can facilitate exchange of technology by lowering transaction costs as new knowledge and technological change accumulates.

    To the extent that intellectual property rights in developing countries have been strengthened by ratification of the TRIPS agreement, incentives for R&D should have been strengthened worldwide. Numbers of patent applications have indeed grown rapidly, particularly in Asia and most especially in China, which now takes the global lead in patent numbers. This nicely mirrors the observed increase in R&D expenditures, but of course tells us nothing about the quality of the output or its economic value. Maskus's proposals, taken together, could help to boost the quality of R&D output.

    Because inventors can extract only a fraction of the value of their innovation and because R&D generates so many unforeseen externalities, it seems clear that market forces will tend to fund too little R&D. This makes a case for encouraging more, but policies are likely to produce more benefits if they increase research rather than development, which is likely to produce fewer spillovers.

    The author's views on the large welfare gains possible by allowing free movement of labor are correct. The case is the same as for capital: to allow all factors of production to be employed most efficiently by allowing them to move freely throughout the world. Loosening the constraint on international labor mobility allows the world economy to narrow the gap between the marginal products of labor in different locations and thereby increase world output. To set against this is the fact that source countries may lose out from the “brain drain.” This cannot be ignored because, although human capital externalities are difficult to quantify, this does not mean they are unimportant.

    In addition to Maskus's two proposals, Saggi suggests FDI as another potentially fruitful area for government policy.

  • Chapter 8 - Benefits and Costs of the IFF Targets for the Post-2015 Development Agenda

  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 171-191

  • Summary

    This chapter covers the important issue of illicit financial flows (IFF) and ways in which they may be addressed. The Sustainable Development Goals (SDGs) target to curtail IFFs (16.4) currently has no defined indicators. Discussions are ongoing, but there is a risk that policy focus is lost. The proposal made here is for a set of three indicators which offer clear policy prioritization, and are likely to exhibit very high benefit-cost ratios. We propose three sub-targets that are more precise than the SDG target 16.4, and provide a much better degree of accuracy, measurability and accountability. For each of the three proposed sub-targets, there is currently insufficient evidence to provide precise cost-benefit analyses. However, available data indicate that in even the most conservative scenarios, they are likely to exhibit high ratios of benefit to cost. The targets are: i. Reduce to zero the legal persons and arrangements for which beneficial ownership info is not publicly available; ii. Reduce to zero the cross-border trade and investment relationships between jurisdictions for which there is no bilateral automatic exchange of tax information; and iii. Reduce to zero the number of multinational businesses that do not report publicly on a country-by-country basis.

  • 6.1 - alternative perspective

    • By Caroline Krafft, Assistant Professor of Economics, St. Catherine University, Minnesota, USA, Paul Glewwe, Professor of Economics, Department of Applied Economics, University of Minnesota, USA
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 141-141

  • Summary

    Summary

    Overall, we generally agree with Psacharopoulos on the value of improving school quality, and we share his skepticism of vocational and technical education. Yet we would also argue that the evidence for expanding preprimary and primary education in sub-Saharan Africa is not as strong as he claims.

    The task set is a very difficult one, and we question the very idea of this undertaking, largely because the field of education suffers particularly from output-driven goals rather than outcomes. Setting goals that focus on outputs or proxies, such as enrollment rates, creates an incentive to attain that specific goal, which will not necessarily lead to the essential goals or benefits of education, such as human capital, knowledge, and skills.

    It is this “how to proceed” that is crucially absent from Psacharopoulos's chapter. For instance, improving school quality by increasing student test scores is stated to have a benefit-cost ratio between 3.0 and 5.0, but how to improve test scores and school quality is effectively not discussed. Even if ways to achieve more years of schooling can be found and costed, calculating the benefit-cost ratio can be misleading given the lack of data on externalities, measurement errors (particularly in developing countries), the absence of the selfemployed from the estimate, and the inclusion of government workers, whose salary reflects government policy rather than productivity.

    We are therefore concerned about the likely inaccuracy of the quoted figures. This is compounded by the low quality of the evidence presented (and perhaps the quality of evidence available). A further factor is the uncertainty around estimates and potential outliers. In particular, the benefit-cost ratio of preschool programs in sub-Saharan Africa is based on a study in Kenya, with a ratio an order of magnitude higher than others, with no adequate justification.

    A weakness of the chapter is that it provides no economic justification for public subsidy of education because social rates of return quoted are lower than private rates of return. Although Psacharopoulos alludes to wider social benefits, he is not able to provide sufficient hard evidence to support his case.

    Research from developed countries shows that the best investment a country can make is likely to be in preprimary education, particularly for disadvantaged children. This is the most cost-effective stage to invest in, and the opportunity cost of children's time is low at this age.

  • 2 - Targets for Biodiversity and Deforestation

    • By Anil Markandya, Honorary Professor of Economics, University of Bath, UK and Distinguished Ikerbasque Professor of the Basque Centre for Climate Change in the Basque Country, Spain
  • Edited by Bjorn Lomborg, Copenhagen Business School
  • Book:
    Prioritizing Development
    Published online:
    30 May 2018
    Print publication:
    07 June 2018, pp 38-49

  • Summary

    Background

    The Millennium Development Goals (MDGs), set up in 2000, tracked a number of indicators for sustainable development to 2015. Some of the goals, such as halving the poverty rate, have been met, and considerable progress has been made on others. Overall they are seen as a successful way of focusing attention and mobilizing resources to address the major gaps in human development, including those relating to the environment. The post-2015 agenda seeks to replace the MDGs with new goals that “move beyond meeting basic human needs and promote dynamic, inclusive and sustainable development” (CIGI, 2012).

    Biodiversity and deforestation are primarily covered in proposed Goals 14 and 15, dealing with marine and terrestrial resources, respectively. These targets draw significantly on the Aichi Targets that were adopted as part of the Convention of Biological Diversity's (CBD's) Strategic Plan for Biodiversity 2011–2020, in Nagoya, Japan, in 2010 (see Table 2.1). However, there are differences between the two sets: the Aichi Targets include more quantitative values than the Sustainable Development Goals, and the SDGs cover a broader range of topics. Because the SDGs in this area are not quantitative and so cannot be adequately costed, this chapter looks in detail at the Aichi Targets and estimates the net benefits of those that are able to be evaluated in monetary terms.

    The Aichi Targets

    In this section the full set of 20 targets is discussed and a qualitative assessment made of the net benefits they provide (Table 2.1).

    The CBD and the United Nations Environment Program (UNEP) have grouped the targets into five strategic goals:

  • A. Address the underlying causes of biodiversity loss be mainstreaming it across government and society (Targets 1–4)

  • B. Reduce the pressures on biodiversity and promote sustainable use (Targets 5–10)

  • C. Improve status of biodiversity by safeguarding ecosystems, species, and genetic diversity (Targets 11–13)

  • D. Enhance benefits to all from biodiversity and ecosystem services (Targets 11–16)

  • E. Enhance implementation through participatory planning, knowledge management, and capacity building (Targets 17–20)

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