In the cold light of day we'd probably be indifferent between, say, war deaths in the middle east and war deaths in Africa. We'd allocate our scarce conflict-reduction resources to where they could do most good. But our actual policy priorities don't reflect rationality; they are largely a function of where the media happen to be able to film footage for television. So the middle east commands our attention while Africa languishes. It's too early to say what the response to the cyclone in Burma will be: it does seem to be a case where a comparatively small aid effort now could save many lives.
A Social Policy Bond regime could formalise our rationality and give it more scope. A global body such as the United Nations, or a group of philanthropists could issue Social Policy Bonds that target world deaths from large natural disasters over, say, five years. 'Large' could mean any disaster that kills more than 500 people, regardless of where it happens. Say that the number of people killed in these disasters averages 50000 a year. The 'Disaster Relief Bonds' could pay up if the number falls below 30000. In the first instance, this would generate incentives for investors to prevent loss of life by, for example, installing warning systems or supplying emergency information. The key point is that bondholders would look rationally at where they could expect to save the largest number of lives per dollar spent.
Bondholders could also intervene after a disaster has struck. Again, they would allocate resources rationally and impartially, and independently of the type of media footage.
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