Saving Africans from Limousine Liberals and People Who, Although Not as Rich as Barbra Streisand, Think Just Like She Does; Part II

My definition of a Hollywood liberal is someone who believes you can solve all the world’s problems without knowing anything about economics. (After all, who needs graphs and mathematical symbols, when all you really need is love?) Unfortunately, there are way too many people in health policy who think exactly the same way. They not only resist the economic way of thinking, they are actually resentful if anyone injects it into the discussion.

Consider health care spending in Africa and suppose we had only $1,500 to spend. How should we spend it? Health economist estimate $1,500 would:

• Treat 1 HIV positive person for one year.
• Prevent 75 people from contracting polio, diphtheria, pertussis, and tetanus.
• Treat 150 people with tuberculosis for one year.
• Prevent 500 people from contracting tuberculosis each year.
• Treat 1,500 people with intestinal worms for one year.
• Treat 1,500 people with malaria for one year.

How can we choose among these alternatives? A common technique employed by health researchers is to measure the payoff from health care spending in terms of “years of life saved,” which is the number of extra years of life the health intervention produces. Sometimes the measurement is expressed as “quality adjusted life years” or “disability adjusted life years” (DALY) in recognition of the fact that the goal is not simply to keep people alive, but to keep them alive and functioning as healthy human beings.

If we want to maximize health and well-being in Africa, we certainly would not start out focusing on AIDS treatment. Consider the anti-retroviral (ARV) drug treatment for AIDS – currently so popular among rock stars and politicians. According to the World Health Organization (WHO):

• The cost of ARV drug treatment for AIDS is $1,500 per DALY.
• Yet if this same amount of money were reallocated to immunizations we could save 214 years of life instead of one year for an AIDS patient.

Two and one-half times as many Africans die from other preventable diseases as die from AIDS, including measles, respiratory infections, malaria, tuberculoses, diarrhea and others. Yet AIDS treatment competes against these other health care needs. And in drawing health resources away from areas where they are more productive, AIDS treatment programs can cost more lives than they save.

If you’re disappointed on the health front, this is only the tip of the iceberg. In last week’s Alert, I noted that over the past five decades, the developed countries of the world have given less-developed countries $2.3 trillion in foreign aid. What difference has all this spending made? International Monetary Fund chief economist Raghuram G. Rajan and Arvind Subramian have done comprehensive testing of a broad array of theories and found that there are no significant effects (either positive or negative) of foreign aid on economic growth. Specifically:

• It apparently does not matter what aid is used for (health, social sector, technical assistance, etc.).
• It apparently does not matter who gives the aid (multilateral donors, bilateral donors, good donors, bad donors, etc.).
• It apparently does not matter to which countries the aid is given (those with good policies and institutions, those with bad ones, etc.).
• It apparently does not matter when the hoped for impact is supposed to take place (short term, long term, etc.).

So given this incredibly sad and depressing record of massive failure on the part of government bureaucrats, what’s the next step for Hollywood?

Give the bureaucrats complete control over the US health care system, of course. How could you possibly doubt?

PS. Here are four must-read books on aid to Africa:

William Easterly, The White Man’s Burden

Gregory Clark, A Farewell to Alms

Paul Collier, The Bottom Billion

Jeffery Sachs, The End of Poverty

The Sachs book represents conventional – and almost certainly wrong – thinking. I include it only for balance. These books are summarized along with other material in John Goodman, “Message to Debaters” and Christa Bieker, at the NCPA’s high school debate site.

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