Fortune News | Jul 18,2020
May 28 , 2022
By Bjorn Lomborg ( Bjorn Lomborg is the president of the Copenhagen Consensus and visiting fellow at Stanford University's Hoover Institution. )
Showing where each Birr does the most good means that the politicians and their officials can pick more of the really effective programmes, and slightly fewer of the less so, with additional data from economic science, writes Bjorn Lomborg (PhD), president of the Copenhagen Consensus and visiting fellow at Stanford University's Hoover Institution.
Despite having a substantial public budget, Ethiopia does not have enough funds to do everything its citizens would like. In that respect, Ethiopia is no different from any other country, rich or poor: it has to prioritise between many worthy opportunities.
In every country, the main role of the government and parliament is to prioritise policy options and investments. Hopefully, these policies will be the ones that deliver the greatest benefit for each Birr spent. These could be enormously influential investments in health, such as rotavirus vaccinations, or in education, such as structured teacher plans.
However, as everywhere else in the world, policies are often driven by other considerations that can dramatically reduce effectiveness. This could be driven by special interest groups and vocal minorities highlighting their preferred options. For instance, fertiliser subsidies definitely help the individual farmer, but overall, such a policy delivers only small returns for society. And media will often push exciting interventions, even if their returns are dubious. For instance, giving each child a cheap laptop was long seen as an exciting and crucial pathway to educating children in the 21st century. Now, some studies show that not only is this an expensive option, but also one that delivers zero benefits — actually, the children possibly become slightly less attentive.
Data and economic science can provide a handy input to help the government and citizens cut through the noise from interest groups and assist with allocating resources to improve the budgeting process.
Cost-benefit analysis – an approach that uses rigorous, cross-sectoral economic analysis to establish what could be achieved by spending additional money in different areas – is rarely used by any government in the world in a broad, transparent fashion. Why? It requires large numbers of academics, well-organised inputs and the collection of considerable data, and it creates analytical results that can upset some vested interest groups.
Projects under the Copenhagen Consensus Centre [of which the author is the president] have helped state and national governments zero in on the most powerful investments. In India, we collaborated with Tata Trusts, the nation's oldest philanthropy, while in Bangladesh we worked with BRAC, the world's biggest NGO. These local inputs make sure that the policies examined are the most relevant to each country.
Another project that could be transformative is being carried out for the Bill & Melinda Gates Foundation to investigate how nations can best spend resources within the conversation of the so-called Sustainable Development Goals.
What could such an investigation achieve for Ethiopia?
The country has huge opportunities ahead – but also challenges which could impact prosperity if not navigated carefully.
A rapid assessment for Uganda points to the types of research that could help Ethiopia. We worked with Uganda's National Planning Authority to examine each of the interventions suggested in the new Uganda Budget Strategy, undertaking a rapid assessment to quickly evaluate the costs and benefits of each initiative, based on the academic literature.
This report highlighted the vast benefits of opening schools unconditionally and keeping them open to improve future earnings for Ugandan children. The research also showed the huge benefits of prioritising healthcare spending on specific communicable diseases like malaria and tuberculosis. Among all the competing claims on the healthcare budget, there is enormous value in focusing additional resources on these areas where relatively tiny investments can generate vast results.
It also showed areas that should not be prioritised, such as software skills development training, which sounds sensible and often attracts attention but typically has low returns, given the vast global competition in this area.
The Uganda research pointed to the potential benefits of region-wide policies such as reducing non-tariff barriers across Africa, which could boost GDP across the region by 2.2pc or 5.2 billion dollars.
Showing where each Birr does the most good does not offer the last word in budgetary decision-making. Nor does it supplant politicians. It merely ensures that citizens and politicians are better informed. Decisions on how to allocate scarce resources should always remain the domain of elected politicians.
But this input means that the politicians and their officials can pick more of the really effective programs and slightly fewer of the less so, with additional data from economic science. Uganda's National Planning Authority Executive Director Joseph Muvawala said that the Copenhagen Consensus report would be "core in guiding Government in the reprioritisation" of actions for its next National Development Plan.
Ethiopia should consider embracing the same opportunity. Ethiopian and international academics should be brought together to map out what really works and highlight where the next Birr can be spent best.
PUBLISHED ON May 28,2022 [ VOL 23 , NO 1152]
Fortune News | Jul 18,2020
Sunday with Eden | Mar 23,2019
Viewpoints | Apr 22,2023
Fortune News | May 11,2019
Radar | Jul 09,2022
Radar | Mar 13,2021
Radar | Apr 30,2022
Fortune News | Apr 06,2019
Radar | Jul 18,2021
Fortune News | Feb 25,2020
Photo Gallery | 68994 Views | May 06,2019
Photo Gallery | 60822 Views | Apr 26,2019
Fortune News | 52815 Views | Jul 18,2020
Fortune News | 52577 Views | Sep 01,2021
Commentaries | May 27,2023
Life Matters | May 27,2023
My Opinion | May 27,2023
Sunday with Eden | May 27,2023
Agenda | May 27,2023
Editorial | May 27,2023
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Recent headlines seem to augur a global debt crisis. The United States is teetering on the precipice of a self-inflicted default. Egypt,...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
May 27 , 2023
Tauted as a somnolent giant, Ethiopia's financial scene now stirs, roused by favourab...
May 20 , 2023
The pungent irony wafting from Pretoria last week was hard to miss. Cyril Ramaphosa,...
May 13 , 2023
In March this year, Kamala Harris, the United States Vice President, visited Ghana, T...
May 6 , 2023
The history of the Ethiopian labour movement dates back to the 1940s, marked by perio...
May 27 , 2023
In a triumph over the trials of the pandemic, a rising tide of construction costs and inflation, Zemen Bank has opened a stunning 32-storey...
May 27 , 2023 . By BERSABEH GEBRE
Meqelle is in an animated bid to reclaim control of the management of companies under the Endowment Fund...
May 27 , 2023 . By BERSABEH GEBRE
Officials at the Addis Abeba City Administration have recently changed the title transfer fees following...
May 27 , 2023 . By MUNIR SHEMSU
The absence of technological equipment to control the contraband trade near national borders and low-qual...
Or see contact page