The Optimist

Paperwork Tigers

The developing world can do fine without more regulation, thank you very much. In fact, it can do better.

Fatality rates on roads in many developing countries are hideously high -- an estimated 130,000 people die on the roads in India alone. Buildings in those same countries often collapse without even the provocation of an earthquake -- the result of substandard construction. Many of these deaths could be prevented with regulation -- speed limits, car safety standards, building codes. Surely, then, the answer is for legislatures and executives to put more regulations on the books?

Actually, no. Most of these deaths are associated with regulations already in place that are being ignored. That was the case with building collapse in the Haiti earthquake last year, for example: There were codes; they just weren't enforced. And this isn't a problem limited to poor countries. In the developed world, unenforced regulation is a major cause of bank collapse. Meanwhile, we license florists and hairdressers to no noticeable benefit. That suggests developing countries -- and probably developed ones too -- need considerably fewer regulations so that they can focus on enforcing the ones that really matter.

One big problem with regulatory enforcement in the developing world is that those charged with regulation are understaffed, undertrained, underpaid, and lacking in oversight. But the problem runs deeper than technical capacity. A lot of regulations in the developing world are used -- and often designed -- by politicians and bureaucrats to extract bribes or other favors rather than to actually make things safer. A survey of driving tests in India, which leads the world in traffic fatalities, found that only 29 percent of learner drivers took the mandated test before receiving their license, and 61 percent failed a subsequent surprise driving test. A linked experiment, meanwhile, found that those people who hired touts to help them get a driver's license were effectively exempted from the test altogether. Those unfortunate individuals who actually took the test -- even though they were on average better drivers -- often failed.

Or look at building regulations: Mary Hallward-Driemeier of the World Bank and Lant Pritchett of Harvard University's Kennedy School of Government examined data on construction permits across the developing world, comparing the amount of time builders were supposed to take to legally obtain a permit and the amount of time it actually took. There was pretty much no relationship at all. Perhaps unsurprisingly, World Bank analysis suggests that countries where the official process to get licenses is particularly onerous are also those where firms report more serious problems with corruption.

Moving toward a smaller set of simple regulations actually enforced by a competent set of regulatory agencies would be of huge benefit not only in reducing fatalities and other ill effects, but also in creating an attractive business environment. Take telecommunications: The evidence from the 1980s and 1990s suggests that privatizing the state telephone company had no effect on sector performance unless there was a strong, independent regulator. Again, an analysis by Pritchett, Hallward-Driemeier, and their colleague Gita Khun Jush using enterprise surveys suggests firms do better with more regulation consistently enforced than less regulation enforced by a capricious bureaucrat. The bigger the variability in policy enforcement across firms in the same industries within a country, the lower the employment growth in that industry. But surely best --and most plausible -- of all would be less regulation consistently enforced.

Beyond a bonfire of unnecessary regulation and a strengthening of the capacities and oversight of regulatory bodies, countries might also want to examine other ways than regulation to achieve similar outcomes. For example, if courts are viewed as a comparatively efficient and uncorrupted institution in a country, it might be better to move some of the burden onto them. In the case of building collapse, one approach would be to make construction firm executives criminally liable if a structure they built collapsed due to shoddy work and killed or injured an occupant. Another approach might be to use incentives rather than regulations -- cash payments to people who pass an "advanced" driving test, as it might be called. No approach will be without its problems, but given the widespread evidence that the existing system isn't working across much of the developing world, this is an area ripe for experiment.

Of course, the fact that regulation is a source of power and money for bureaucrats and politicians suggests that changing the situation isn't going to be straightforward. It is likely to be the kind of reform introduced by a new administration trying to start with a clean(er) slate. The Arab Spring might be just such an opportunity in the Middle East, for example; it was ignited, after all, by the self-immolation of a man frustrated by the government harassment he faced operating a fruit stall. Even before the protests, many countries in the region were moving toward simplifying codes that affected businesses -- in recent years Egypt was one of the top 10 most-improved countries in the World Bank's Doing Business index of official red tape. But a 2009 World Bank report noted that there was a big gap between de jure reforms and de facto implementation -- with favoritism still the norm.

Perhaps the spirit of reform will help move countries in the Middle East away from byzantine and capriciously enforced rules toward limited, impartial, universally enforced regulation. It may not sound as grand as sweeping democratization, but it could make a huge difference to the economic prospects of the region.

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The Optimist

Shot in the Dark

The biggest hurdle to eradicating disease isn't access to vaccines -- it's getting people to take them.

In 2009, veterinarians at the U.N. Food and Agriculture Organization made a remarkable announcement: Rinderpest, a livestock-borne disease, would soon be eradicated. OK, so maybe it wasn't front-page news, but rinderpest -- which causes animals to develop fever, followed by diarrhea and (frequently) death -- has over thousands of years been a recurring plague on human civilization. It has destroyed the food supplies of entire countries such as Ethiopia, which lost a third of its population to a rinderpest-related famine in the late 19th century. The FAO's eradication effort, launched in 1992, marks only the second time a disease has been deliberately wiped off the face of the Eearth; the first, better-known case was smallpox, which killed between 300 million and 500 million people over the course of the 20th century before its eradication in 1980.

On June 13, the global community tried for a repeat performance with a pledge drive, held by the Global Alliance for Vaccines and Immunization (GAVI). Thanks to support from aid agencies from Britain to Russia, as well as the Gates Foundation, GAVI raised $4.3 billion to immunize 250 million kids worldwide between now and 2015, protecting against diseases from tetanus to tuberculosis, whooping cough to diphtheria. It's a daunting project, but one that is less implausible than it once was: The range of diseases that can be prevented is growing ever longer, and now includes HPV, rubella, typhoid, and Japanese encephalitis. Vaccines for malaria and dengue fever may not be far behind, and there's even some hope for HIV. GAVI itself boasts a strong track record: Over the organization's first decade, more than 5 million child deaths were prevented though more rapid introduction and increased coverage of vaccines in low-income countries. But, going forward, the alliance is going to have to think more about getting parents to vaccinate their kids -- the demand side of health-- especially if it wants to repeat the huge victory of wiping out a disease.

Although few in the public-health NGO community would like to admit it, eradicating diseases is at least as dependent on luck as it is on planning and persistence. Universal vaccination -- the only nearly surefire means of eradication -- is an impossibility in most countries. Even the best-resourced campaigns have to deal with the trouble of reaching remote villages over rutted roads to deliver vaccines that sometimes need to be kept refrigerated, often are difficult to administer, and can take multiple shots to take effect. Add to that the challenge of reaching people who often have no official registration or address, and you can see the problem.

Health professionals instead rely on the strategy of trying to vaccinate enough people, especially in the immediate period of an outbreak, so that the disease eventually retreats toward extinction -- always a dicey prospect. Donald Henderson at Johns Hopkins University wrote of smallpox eradication that it "was achieved by only the narrowest of margins" while progress "wavered between success and disaster, often only to be decided by quixotic circumstance or extraordinary performances by field staff."

Today, the world appears to be walking the same knife-edge with polio. The Global Polio Eradication Initiative was launched in 1988 when there were about a third of a million cases worldwide. Indigenous polio was eradicated in the Americas in 1991 and China in 1996. By 1997, the worldwide total of cases was down to 7,000; by 2009, there were only 1,600. But new cases keep popping up: That same year saw outbreaks in Uganda, Mali, Togo, Ghana, Ivory Coast, and Kenya.

The problem wasn't vaccine supply; the world has spent $8.2 billion on eradication programs, which bought both vaccines and the human infrastructure required to deliver them. Rather, it was a demand issue, one that hinged in particular on the attitude of governments and parents.

Take the example of the polio vaccination campaign in northern Nigeria in 2003, which responded to a particularly virulent outbreak that was threatening to spread. The governor of Kano state refused to support the vaccination campaign because of rumors that the vaccines were laced with drugs that would sterilize recipients -- which he claimed was part of a U.S. conspiracy to depopulate the developing world.

To be fair to Kano's former governor, only 23 percent of children across the whole of Nigeria were fully immunized in 2008, suggesting that general lack of information, fear of side effects, and the hassle of getting kids vaccinated probably played the larger part in low takeup of polio vaccine on the demand side (not to mention weaknesses in the vaccine delivery and administration system). But that only emphasizes the fact that without at least some support from both local officials and parents, there is no way to complete a vaccination program.

Issues with government prioritization help to account for the fact that about 55 percent of surveyed kids are fully vaccinated in low-income countries, according to my colleague Amanda Glassman at the Center for Global Development -- but only 42 percent in lower-middle-income countries are. And in fact, demand-side problems affect the whole world, not just the developing parts of it that are typically the focus of immunization efforts. More and more parents in Europe and the United States have refused to vaccinate their kids over the fear (despite overwhelming evidence to the contrary) that the vaccines lead to autism.

What about the less conspiracy-minded corners of the world? MIT economists Abhijit Banerjee and Esther Duflo, authors of this year's development blockbuster Poor Economics, studied vaccination rates in Udaipur, India and found that only 16 percent of children below age 2 there were fully immunized against the standard preventable diseases. That was due in part to the limited provision of immunization clinics, but it was also because of low demand for the free immunizations that were available: Even when a local NGO helped ensure regular and well-publicized visits by traveling immunization camps in parts of Udaipur, full immunization only increased from 6 percent in control villages to 18 percent in villages that saw regular camps. World Bank research in India suggests one reason why -- many parents do not fully appreciate the health benefits of vaccination and so are unwilling to go to the effort of attending an immunization camp.

One effective response if the kids won't come to the vaccines is to take the vaccines to the kids. If families are visited at home by a trusted health worker, the World Bank research suggests parents are very happy to see their kids stuck full of needles. But the trouble with such an approach is that house visits are a very expensive way to guarantee coverage. So Banerjee and Duflo tried adding an incentive to get parents to bring their kids to camps, instead -- a 2-pound bag of lentils for each immunization and a set of plates if parents ensured their kids got the full program. That more than doubled the full immunization rate to 39 percent in villages where the incentives were offered and even increased immunization rates threefold in neighboring villages. And because the incentives increased the efficiency of the camps (i.e., how many kids were vaccinated each day), they actually reduced the overall cost of providing immunization coverage, from $56 per child without incentives to $28 per child.

The long-term answer to raising vaccination levels worldwide is to spread knowledge of their safety and efficacy. But as both the polio vaccine scare in Nigeria and the recent gross irresponsibility of a doctor and his Hollywood acolyte over vaccines in the West demonstrate, that process can be complex. In the meantime, providing direct incentives to people to get their kids vaccinated are likely to have a more immediate impact on changing behavior -- and that will reduce both the immense human costs of infectious disease and the considerable financial costs of preventing them.

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