An economic look at the new malaria vaccine

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It is excellent news that a pilot program for the new malaria vaccine, RTS,S, is being rolled out in Malawi, Ghana, and Kenya. The vaccine works in combination with other malaria prevention efforts–bed nets, clearing stagnant water from homes–and might reduce fatal malaria in 1/3 of cases.

Economists such as Jeffrey Sachs have long looked at malaria as one of several health challenges that feed into the poverty trap.

Malaria is particularly frustrating because it kills almost half a million people per year, yet it is far easier and cheaper to prevent than other health scourges. Bed nets are an example of a public health “low-hanging fruit” as Banerjee and Duflo have called it, a cheap way to save lives, that is vastly underutilized. It has been quite difficult to convince rural African to use bed nets, and studies have shown that subsidizing the nets to almost free makes as little as a 5% increase in acquisition of nets. William Easterly haunted development scholars with his tales of subsidized bed nets being used for wedding veils and fishing.

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Unfortunately, development economists of public health find that the poor tend to spend their money not on cheap preventative measures, but on expensive treatment instead. When reading about the new malaria vaccine, I found myself prevented with all sorts of questions from behavioral economics:

  • Is it a problem of psychological “sunk costs”? The vaccine is supposed to be used in addition to efforts already in place. The problem, some say is precisely that bed nets are free or cheap, and that means people don’t value them. Their subsidization reduces their “sunk cost” of purchase, which is the money we spend that we can’t get back. Studies show that sunk costs make people use and value those purchases longer and follow through with the cost of ongoing maintenance, e.g. sewing up holes in the nets. With this in mind, should the vaccine be totally free to everyone, or incur some small charge?
  • The “free-rider problem”: This applies to all vaccines everywhere. If I believe everyone around me going to some effort will achieve those ends, there is little reason for me as an individual to make that effort when I will benefit regardless. Actually, my individual efforts would be a form of economically “irrational” behavior, i.e. not self-maximizing, in this sense. If everyone in my village will vaccinate their child, pay for it and deal with the fever and fussiness that temporarily follows, and I believe that will eradicate malaria in my village, then it makes sense for me as an individual to abstain from the trouble of getting the vaccine.  This line of thought is less applicable to malaria, which is highly mobile and widespread, than to more obscure infectious diseases in the U.S., however.
  • What is the “opportunity cost” for parents to vaccinate their children?: This asks what people miss out on with Option A by choosing Option B. I mentioned it in a previous post about the Niger Delta Amnesty program, which sought to provide job training for insurgents, thus lowering the cost of leaving rebel groups and increasing the cost of staying in them. The question of the opportunity cost for African parents would be, “How much am I missing out on in order to attend the vaccination clinic?” Parents could be incurring the cost of a long walk, leaving behind free childcare, missing farming time that generates income, etc. If this a concern for parents, studies in India showed that providing just a small amount of lentils to parents increased the likelihood that they would vaccinate.
  • Would these vaccines be affected by “time inconsistency” on the part of parents?: Behavioral economists teach us that we want to put off small costs today even if doing so risks big gains in the future. We care more about the present than the future essentially. The cost of getting a child vaccinated today could feel greater than the hypothetical cost of that child contracting malaria later on. To overcome this, there have to be very few obstacles to today’s vaccination and a sense of grave potential cost to contraction–which is a public awareness and education issue.

There is not much information online on the logistics of how the RTS,S vaccine is logistically being rolled out, but a key issue would be to ensure that public health care providers are reliable in their work attendance. Studies show that public workers in health have troublingly high absenteeism a the workplace. This makes them unreliable to patients who then stop coming for care, and in turn, those workers get bored and suffer even lower morale that disincentivizes work attendance.

Additionally, any innovation that would require even a slight modification in behavior requires a bit of “nudge” sometimes, for humans can be quite conservative creatures. “Nudges” are slight changes to structure or incentives that make it easier to follow a certain course of action. The best nudges are those that make that action the default one, i.e. parents who have to exert effort to not get the malaria vaccine because it is built into some other form of cheap and accessible health care.  Development folks in the West often forget this because, as Banerjee and Duflo aptly describe it, “those who live in rich countries live a life surrounded by invisible nudges”.

Could African mining operations mimic the effects of conflict?

Screen Shot 2019-05-28 at 2.00.58 PMIn recently relocating to central Africa, I have shifted my focus away from the impact of large-scale natural resource extraction, e.g. gas and oil, to small scale mining. This is no small industry, as it is estimated to employ 40 million people worldwide. It is well-known that artisanal and small-scale mining operations (ASMs) undergird long-standing conflicts. These mines both drive and sustain violence, giving insurgents a reason to seize power and geographic strongholds while also generating income to pay soldiers and buy weapons. The most well-known of these conflicts is that in nearby DRC.

Less studied is the lower-impact ASMs that operate in non-conflict zones. As an example, Tanzania hosts seven notable gold mines (which produce about 2% of the world output), but countless other smaller mines that produce copper, silver, diamonds, tanzanite, etc. In contrast to non-lootable resources that often require local government cooperation, Tanzanian mines are privately owned by foreign companies, which allows them to function outside the confines of the state. The Tanzanian government owns only a minor interest in a handful of private enterprises, e.g. Kiwira, Williamson Diamonds. Mining and quarrying constitute just 3% of the Tanzanian GDP, and this would be larger if the government were able to become a more significant actor in such ASMs.

Tanzania is interesting in that its natural resource history of control is inverted. Typically, extraction begins in a Wild West manner in developing countries, with governments seeking greater control as they recognize the financial boon, e.g. Nigeria’s oil. However, the Tanzanian government exercised strict control over the industry when mining first began to a notable degree in the 1970s. Through the 1980s, claims were opened up to individual investors. Then, the mining industry became even less centralized when more international corporations arrived and more minerals were exported internationally in the 1990s. These taxable international exports are key to the Tanzanian state being able to use that revenue for social service investment and possibly avoid some pitfalls of the resource curse.

My current interest in unregulated ASMs in non-conflict zones is centered on the non-measured effects these mines have on nearby communities. I would offer the (still not fully researched) hypothesis that ASMs could mimic the effects of civil conflict.  Both mines and localized conflict/violence:

  • create patterns of displacement that separate people from their typical forms of livelihood, family support systems, and bottom-up governance
  • stymie other economic sectors outside of mining, e.g. farming, and drive residents to new and often illegal forms of income generation
  • militarize areas with shored up security forces and a higher number of weapon to protect mines and fighting strongholds
  • cause environmental degradations as people seek out resources and land in a non-sustainable manner

If we consider the gender dynamics of this comparison, there are other similarities. Both mines and civil conflict:

  • create patterns of displacement that separate men from kinship networks of accountability for their behavior towards women and women from kinship networks that protect them from gender-based violence (GBV)
  • stymie other economic sectors outside of mining, e.g. farming, upon which women disproportionately rely (women do the majority of agricultural output in sub-Saharan Africa); ASMs could also drive women into dangerous sex-work
  • militarize areas, and we know that having lots of armed men in hypermasculine environments increases rates of GBV
  • cause environmental degradations that disproportionately affects women–who are the primary food and clean water providers to children

Both ASMs and civil unrest also contribute to (and can be a result of) autocracy and corruption that marginalizes women. They could hinder democracy that would be more inclusive of women voting and running for office.

Although it is a few years old, this interesting article found that Congolese women living close to ASMs are indeed to more likely to have suffered sexual violence, particularly if those ASMs host at least one armed actor.

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As demand for minerals, largely through the electronics industry, can only multiply the number of ASMs in operation, this line of inquiry is promising for security researchers of all regions.