June 7, 2004
World Affairs: The Biggest Impact

By STEVE FRIESS

Newsweek

Money can't buy happiness, but it could do a better job of solving some of the world's problems. That was the working thesis of eight top economists who met in Copenhagen the last week of May to rank a list of the world's most dire problems according to which could most effectively be solved with infusions of cash. The cost-benefit analysis was applied to 17 proposed solutions to problems ranging from water sanitation to world hunger. "We don't have the money to deal with everything, so we must prioritize," says Bjorn Lomborg, director of Denmark's Environmental Assessment Institute and the event's organizer. "If we can't do everything, what should we do first?"

The answer: HIV/AIDS. Lomborg's committee agreed that plans to combat HIV/AIDS-which infects 5.3 million people annually and killed about 3 million last year-make the most financial sense. The panel agreed with a paper presented by health economist Anne Mills of the London School of Hygiene and Tropical Medicine, which claimed that spending $60 billion to promote condom use and distribute antiretroviral drugs, especially in sub-Saharan Africa, would produce a benefit of $3 trillion in saved health-care costs and human productivity.

The HIV/ AIDS plan trumped ones to deal with malnutrition, remove free-trade barriers and control malaria. But perhaps the most noted casualties were the proposals to combat global warming by raising taxes on carbon emissions and following the Kyoto Protocol, which fell to the bottom of the list. Critics of the consensus had claimed the event was actually a setup to bolster Lomborg's argument that reversing climate change should not be a high priority. Lomborg insists the panel made up its own mind. Panelist Vernon Smith, of George Mason University in Virginia, agrees: "The environment is very important, but it's too early to be concerned with climate change. Action now is not essential as it is with AIDS, malaria and hunger."

While the group was guided mostly by numbers, several panelists admitted they had to take into account other factors like political feasibility, particularly because statistics for the cost and benefits of, say, curbing governmental corruption, were speculative at best. But jurist Bruno Frey of the University of Zurich hopes the novel approach will be taken for what it is-an interesting idea. "Our impact is unlikely to be too great. We cannot change the world in a week." At least they're starting to think about it, though.

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