The last big locust crisis, in north-west Africa, lasted from 2003 to 2005 and caused an estimated $2.5bn worth of damage to harvests. Getting it under control cost almost $600m, with donors footing much of the bill. That is enough to cover preventive measures in the same region for 170 years, say experts. But prevention does not attract much funding. “This is a Catch-22,” says Keith Cressman, the Senior Locust Forecasting Officer at the FAO. “Donors are interested in funding big emergencies, big problems.” And governments, unlike locusts, move slowly. East Africa is reeling from an invasion of locusts, the Economist, 1 February
So it goes. We pay attention to fast-moving problems that make a vivid visual impact. Slow-moving, unglamorous problems that cry out for policy initiatives go neglected. Prevention of emergencies, like locusts, are one example; climate change, and loss of habitat for the world's animal and plant life are others. By the time their worst effects are known and we belatedly respond, the problems have taken on overwhelming dimensions.
We respond to events if they are fast moving enough. That is a failure, in that early response to less obvious problems would be more efficient. But it's a failure too in that we are wedded to responding to noticeable events. We do not have policies that to deal with unknowable disasters whose provenance and scale we cannot foresee. We need to recognise that the maintenance of the status quo is worth targeting, even if we cannot foresee how it is threatened and especially if we cannot think about how best to go about dealing with those threats.
This is where Social Policy Bonds can play a role. They can motivate people not only to solve visible but slow-moving problems, but also to work so as to prevent those unforeseeable problems. Take, for instance, the threat of nuclear conflict. We know one would be catastrophic but we have so few ideas about how to lower the threat level that we devote far more ingenuity (and quite possibly, funding) into digital marketing strategies for dog-food, or into developing new flavours for potato crisps. There are well-intentioned, hard-working people working to reduce threats like nuclear conflict, but their resources are limited by our historic and inefficient practice of responding only to events that are actually occurring. And we have no mechanism for rewarding the institutions that are working for peace in ways according to how well they do so. This means they are not as motivated as they otherwise might be, but more importantly that these bodies do not receive funding commensurate with the importance of their goal. Everybody in the world would suffer grievously from a nuclear exchange, but there is no means by which we can currently channel our well-founded fears into ways that will help avoid one. We have to rely on bodies such as the United Nations, non-governmental organisations, and philanthropists, most of which are - inevitably, and in common with all organisations - pre-occupied with self-perpetuation.
The answer could be Nuclear Peace Bonds. Targeting nuclear catastrophe they would be backed by governments, NGOs, philanthropists and anybody with a strong interest in human well-being. Floated on the open market they would become redeemable for, say, $1m each only after a thirty-year period during which no (lethal) nuclear explosion takes place. Floated on the open market, they might initially fetch just $10000 each, if the market thinks the probability of thirty years’ nuclear peace is low. But these bonds would be tradeable: their value would rise and fall according to how likely people think the peace target will be reached.
Initial investors would buy the bonds and do whatever they can to increase that probability. Even helping existing ways of monitoring nuclear material might see the value of their bonds double. Others, with expertise in different areas, would buy their bonds and do what they can to raise the value of the bonds still further. At every stage, the bonds would be in the hands of those most able to bring about nuclear peace. The bondholders’ goal is exactly congruent with society’s: they make money only by achieving society’s goal. At every stage of every process required to achieve that goal, incentives will motivate people to be as efficient as possible.
Rather than encourage endless speculation about what projects will make the world more peaceful the bonds would, in effect, contract out the achievement of world peace to the market. They would encourage a wide range of adaptive projects, whose sole criterion for funding would be that they would raise the probability of world peace being achieved. In this way, the governments and others who back the bonds would do what they are best at: articulating society’s goals and raising the revenue for their achievement. At the same time, the market would be doing what it is best at: allocating resources as efficiently as possible.
If nuclear peace sounds too lofty a goal, then we could start by aiming for something like peace in the Middle East. The same principle would work for natural disasters or climate change. In every case, we'd be rewarding the successful achievement of a sustained, desirable outcome, even if it's as unglamorous as maintaining the status quo in the shape of nuclear peace. It is a shame that few people seem to think along these lines.
My short piece on Nuclear Peace Bonds is here. The links in the right-hand column of that page point to papers on similar themes: Conflict Reduction, Disaster Prevention, and Middle East Peace