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August 19, 2008

Investing in a Solution for the Future

Catherine New
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As part of an ongoing series, the Wall Street Journal asked top political and business leaders how they would spend $10 billion to create solutions for some of the world’s problems. Sidney Taurel ’71, chairman of Eli Lilly & Co., expressed his wish list in an op-ed in Monday’s paper.

“I would invest half of the $10 billion in comprehensive treatment programs that could be sustained by the countries with high incidence of [malaria, tuberculosis and HIV/AIDS], and which have leaders committed to long-term solutions,” Taurel writes. “I would use the remaining half of the $10 billion to foster investment in research, and I’d leverage it as I would the treatment programs — by working to make it sustainable.”

What problem would you tackle — and how much would you spend — to make significant progress solving a global crisis? Please add your comments.

Photo credit: Curt Carnemark / World Bank

Comments

by Ray Fisman | August 20, 2008 at 8:38 AM

Given the remarkable ineffectiveness of large-scale aid over the past half-century, I would probably use some significant amount of the $10 billion to finance program evaluations of how to deliver aid more effectively! We know that bed nets save lives. We know that extra years of schooling produce large economic benefits. Now we just need to do a lot more to figure out how to ensure that aid dollars aren't stolen are wasted.

by Amit Khandelwal | August 20, 2008 at 11:56 AM

Cross-country differences in standards of living are a result of cross-country differences in productivity. One of the factors that affects the productivity of individuals is access to health care. Several recent studies in economics have documented the long-run consequences of poor health at birth, which is manifested in low birth weight (LBW). It turns out that LBW is strongly correlated with lower future health outcomes, lower educational attainment and lower wages. Improving access to prenatal health care can therefore have long-term benefits to an economy trying to escape poverty traps. I would spend $10 billion on a program that improve access to pre-natal health care for women. There are two difficulties with this generic policy intervention. The first is that the causes of LBW will differ across societies. For example, while cigarette smoking during pregnancy is the leading cause of LBW in the US, it may not be an important cause of LBW in India, where few women smoke. Secondly, once the primary cause of LBW has been identified, randomized heath interventions are needed to identify precisely which policies work and which do not.

by William New | August 20, 2008 at 3:32 PM

The effectiveness of health care delivered per dollar ranges from very high (e.g. infant/childhood care in general, preventative prenatal care in particular) to very low (e.g. geriatric curative care). Across the cost-effective mid range is prevention of infection (e.g. malaria, tuberculosis, wound care, water/sewage treatment) and reduction of toxic exposure (e.g. smoking, water/air pollution). Unfortunately dollar expenditures for health and medical care are largely made for political reasons today rather than future social benefit, with little intergenerational equity. $10 billion expenditure can benefit today (modestly, with little risk) or tomorrow (enormously, but with greater uncertainty). Capitalists in general (and Americans in particular) tend to discount the future in favour of immediate return, worrying about today today, and thinking about tomorrow tomorrow. Where and how to invest $10 billion is a choice that depends on the investor's personal priorities. Different cultures (and indeed different generations) will make different choices.

by Luke Davenport | August 24, 2008 at 12:42 PM

Those of us interested in privileged positions interested in alleviating global poverty often speak of the need to identify effective solutions that can be replicated widely. In so doing, we lose sight of the many obstacles to implementing these solutions that often can only be overcome by the dogged determination of a single person or group of people. If we are really serious about bringing solutions to scale, what we are really talking about is nurturing the type of person that has both the passion and determination and the skills and abilities to put ideas into action on the ground. In short, more than scalable ideas, we need more scalable people. To make this happen, I would invest $10 billion in three ways: 1) building or augmenting world class, merit-based primary and secondary schools in poverty-ridden areas 2) identifying promising students at an early age and supporting the entirety of their educational careers 2) providing scholarships of bright and talented young people from these areas in existing world class colleges and universities The products of this intervention would be a class of skilled and locally invested people capable of putting good ideas into action - scalable or not.

by Francisco Andrade | August 23, 2010 at 2:43 PM

Microfinance is on top in third world countries, but it's just a business for ngos, banks and others. Microfinance is not working because they are lending money to poor and uneducated people that spend the money in food and utilities; so it would be interesting to lend poor people money and give them access to short term education programs. More educated people could develop new business and projects...

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