Counterterrorism, Conflict Prevention, or Hunger: Which Would You Spend Money On?

The second dispatch from the 2008 Copenhagen Consensus Conference

Copenhagen, May 26—The Copenhagen Consensus 2008 Conference, in which leading economic experts aim to prioritize the world's biggest problems, began in earnest today. The idea is that there is an "extra" $75 billion to spend over the next five years on pressing global challenges, and the Copenhagen Consensus will identify where we can get the biggest bang for our aid bucks. The public presentations took place at the Youth Forum in a Copenhagen Business School (CBS) auditorium housed in a black glass and granite building, the architectural lovechild of Bauhaus and Darth Vader. On a rainy, dreary day in Denmark who wouldn't want to stay inside for ten hours listening to lectures on how to solve terrorism, civil conflicts, and hunger?

First issue: Transnational terrorism. The world is spending way too much on counterterrorism activities, concluded University of Texas-Dallas economist Todd Sandler. He argued that there is no solution to transnational terrorism; it can be put into remission but cannot be eliminated. To fulfill his Copenhagen Consensus challenge obligations, Sandler looked at five separate possible policies including business as usual at the Department of Homeland Security. In every case, except one, the costs were far greater than the benefits. Sandler admitted that "the number of lives lost or ruined by transnational terrorism is rather minor compared with other challenges considered by the Copenhagen Consensus." On average, only 420 people are killed and 1249 injured each year in transnational terrorist attacks.

Right now we get just nine cents of value for every dollar we spend trying to stop terrorists. Sandler looked at the benefits and costs of a more proactive effort fighting terrorism and again found that we would be getting about 12 cents of protection for every dollar we spent. And what about hardening valuable targets against attacks? Such defensive measures return 28 cents on every dollar expended. Sandler suggests that prime-target nations adopt "more sensitive foreign policies" and hand out $8 billion in no-strings attached foreign aid to buy love around the world. He admits that the costs and benefits of this proposal are hard to quantify. The only proposal that Sandler thought might work is doubling the budget of Interpol to $116 million to increase its counterterrorism capabilities. He then assumed that an enhanced Interpol would prevent one spectacular incident per year. On that assumption, we might get $15 in benefits for very dollar spent.

Each initial report is challenged by two other experts offering their perspectives. In this case, UCLA political scientist Michael Intriligator pumped up the paranoia, warning that terrorists might get THE bomb. And then where would we be? In his paper, Intriligator suggested that enough fissile material is missing to cause concern. On the other hand, former U.N. chief weapons inspector Hans Blix told the New Scientist earlier this month, "The risk of terrorists getting [nukes] is pretty small, because trafficking has not been enormous. Maybe a kilo of highly enriched uranium has gone missing from Russia, but their security has got much better."

In his perspective paper, Claremont-McKenna College economist Brock Blomberg tried a different set of calculations and basically came up with the same benefit cost ratios as Sandler, except he found that boosting Interpol's budget was a marginal benefit at most. After the session, I asked Sandler and Blomberg how we could go about dismantling the costly and largely ineffective post 9/11 counterterrorism measures in the U.S. They both looked bemused. Sandler opined that maybe one day some of the hassles at the airport will go away, but didn't foresee any lessening of border controls. Blomberg simply noted that once these things are established they never go away. So, for years to come, we're set to waste billions of dollars on security measures that we know are not cost effective. Sandler observed, "It is human nature to overspend on unlikely catastrophic events." All too true. On the other hand, it's unlikely that the Copenhagen Consensus will endorse counterterrorism spending as a high priority.

The next big issue was how to address the security challenges in conflict-prone countries. The chief presenter was Oxford University economist Paul Collier, the director of the Center for the Study of African Economics and author of The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It (2007). At the first Copenhagen Consensus conference in 2004, Collier offered a number of ambitious proposals for preventing both intranational and international conflicts but, he told me ruefully, the experts in 2004 didn't put them on the top priority list. So this time Collier decided to concentrate on a more modest set of proposals that aim to prevent violence from erupting anew in post-conflict countries.

Collier argued that his proposals address the fundamental need for security on which all of the other Copenhagen challenges are built. One cannot effectively deliver food, medicine, education, gender equality, and so forth if a country is tearing itself apart. Civil wars are economic development in reverse. Civil wars occur in the poorest least hopeful countries in the world and last on an average of seven years. Total losses range between $60 billion to $250 billion per civil war and it takes 14 years for the economies of countries to recover from the conflict. Statistics show that post-conflict countries have a 40 percent chance of falling back into violence within ten years of halting an earlier conflict. Collier also noted that coups are less damaging than civil wars to the prospects of countries, costing about $8 billion per regime change. Collier declared that "democracy is not a guarantee against coups, economic development is." He added that at low income levels democracy even makes insurrection more probable.

Collier argued for a package of proposals in which international peace keeping forces would be deployed at the conclusion of civil wars. He estimated that this would cost $850 million per year and reduce the risk of a resurgent civil war over ten years by 30 percent, yielding benefits of $75 billion. In that case, the benefits of $75 billion would clearly outweigh the costs of $8.5 billion in peace keeping expenses. Another low-cost proposal is over-the-horizon guarantees that there would be international military intervention on behalf of democratically elected governments threatened by rebellion. A relatively small number of peace keepers could operate a permanent base in a post-conflict country to which much larger forces could be dispatched quickly whenever a threat arises. Collier assumes that such arrangements could avoid three out of four new civil wars in low-income countries over a decade. He estimates that such guarantees would cost $2 billion annually. Avoiding just one civil war would result in benefits in excess of $60 billion.

In his perspective paper, Andrew Mack, director of the Human Security Report project at Simon Fraser University in Canada, noted that violent conflict around the world has been dropping rapidly since 1990. The number of conflicts is down 40 percent, coups down 40 percent, and genocides down 80 percent. What accounts for this "explosion of peace?" Mack attributes it to the fact that international peace making efforts led by the U.N. have become more effective after the end of the Cold War. Peace making via third party mediation is up 400 percent. In addition, Mack noted that coups have become less lucrative for would-be tyrants because aid donors are refusing to shovel money at countries in which coups occur. For example, the Foreign Assistance Act prohibits most forms of U.S. economic and military assistance to countries whose elected head of state is deposed by a military coup. Since 1990, this provision has been invoked against the Central African Republic, Cote d'Ivoire, Comoros, Gambia, Guinea Bissau, and Niger. Mack is skeptical of proposals for international military interventions, noting the failure to stop the Rwandan genocide in 1994 and the ongoing conflicts in Darfur.

The third session dealt with proposals on how to alleviate hunger and malnutrition. Sue Horton from Wilfred Laurier University in Canada was the main presenter. She began by pointing out that 75 percent of the world's malnourished children live in Southern Asia and sub-Saharan Africa. She estimated that about 2.8 million children die each year from malnutrition and argued that 700,000 of these deaths could be averted by low cost nutritional interventions. Between 100 and 140 million children are vitamin A deficient; 633 million people suffer from goiter due to lack of iodine; and two billion suffer from iron deficiency. In addition, new research is showing that zinc deficiency compromises children's immune responses. All of these micronutrient deficiencies reduce physical and cognitive abilities.

To highlight the importance of micronutrients, Horton cited a 2008 longitudinal study in Guatemala which followed up with men who had received supplements when they were three years old and younger between 1969 and 1977. Amazingly, the men who had received supplements below age three had wage rates which were 34 to 47 percent higher than those of controls, and annual incomes which were 14 to 28 percent higher.

Horton offered a set of proposals which would expand micronutrient supplementation for vitamin A and zinc in South Asia and sub-Saharan Africa; increase micronutrient fortification of cereals and salt with iodine and iron; further research to breed new grains that deliver more micronutrients (biofortification); expand deworming programs; and offer nutrition education, especially on the benefits of breast feeding, to women in developing countries. Horton calculated that implementing these solutions would cost $1.2 billion per year and yield $15 billion in benefits. Apparently, due to some misunderstanding, she didn't realize that the Copenhagen Consensus process gives her $15 billion to allocate annually. With that amount of money, her proposals could be scaled up considerably. From the point of view of cost-effectiveness, Horton pointed out that these projects can be administered by non-governmental organizations if governments are too incompetent to do so. Her proposals may well move to the top of the Copenhagen Consensus priority list.

Commenters of both perspectives favored Horton's solutions, but wanted to expand them. One of the chief measures for child malnutrition is "stunting," that is, being significantly smaller than average for one's age cohort. Emory University nutritionist Reynaldo Martorell noted that a recent study which looked at well-nourished children in Accra, Ghana; Muscat; Oslo, Norway; New Delhi, India; and Davis, California, found no significant differences in growth rates and body length between children under age five.

Tuesday's Copenhagen Consensus sessions will consider solutions for air pollution, diseases, sanitation and water, and global warming.

Ronald Bailey is reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

Disclosure: Danish taxpayers are paying my travel expenses to attend CC08. There are no conditions placed upon my reporting.