Third World R&D

Jeffrey Sachs, an economist at Harvard University, makes a compelling case in the latest edition of The Economist for changing the way the world’s richest nations regard the poorest. Though his arguments are on a larger and more dramatic scale, they will sound familiar to those heard in Maine.

The 700 million people in the world’s 30 poorest nations (called Highly Indebted Poor Countries or HIPCS) are falling further behind the richest, according to Mr. Sachs, because “for myriad reasons, the technological gains in wealthy countries do not readily diffuse to the poorest ones.” That is, absent research and development of their own, the poorest nations cannot take advantage of gains made elsewhere because those gains are not geared to their needs. Missing out on R&D in Maine results in the relative discomfort of low-wage jobs; in places such as sub-Saharan Africa, the result is something else entirely — malnourishment, sickness and disease. The life expectancy in HIPCS is only 51 years.

And a state like Maine can address its shortcomings directly — by setting aside public money for research and development. Unfortunately, that’s not so easy for the poorest nations, which have no infrastructure to begin with and a flight of their most able scientists and engineers to more developed countries. Wealthier nations have tried to help, for instance, through loans from the International Monetary Fund or by trying to solve health disasters through the World Health Organization. These groups, however, are not equipped to solve monumental problems like malaria, which kills between 1 million and 2.5 million people a year.

They are ill equipped, Mr. Sachs argues, for three reasons. Science follows the market — drug producers will not invest hundreds of millions of dollars into an effective malaria vaccine without an assurance that someone will buy it at a price that produces a sizable profit. Second, the larger scientific community the higher its productivity, meaning that Third World scientists without such a community are unlikely to make the breakthroughs on their own. Third, science requires a public-private partnership, as Maine has well concluded.

One solution offered by Mr. Sachs is for wealthier nations to provide incentives to pharmaceutical companies instead of direct loans to impoverished nations. Devise a malaria vaccine (or one for AIDS) and the industrialized world will ensure that it is purchased. Ditto for highly productive seed types especially suited for tropical locations.

The point, of course, is to allow poor nations to become healthy enough to provide for themselves. The increasing numbers of desperately poor people suggests the current modes of help are not working as well as they might. Incentives that target technological improvements to reduce the effects of poverty are an idea worth pursuing.