ECONOMICS.
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Economic Rewards to Motivate Blood Donations
Fellow: Mario Macis Abstract: The position and guidelines of the World Health Organization (WHO) and several national blood collection agencies for nearly 40 years have been based on the view that offering economic incentives to blood donors is detrimental to the quantity and safety of the blood supply (1). The guidelines suggest that blood should be obtained from unpaid volunteers only (2). However, whether economic incentives positively or negatively affect blood donations (and other prosocial activities) has remained the subject of debate since the positions were established (2–8). Evidence consistent with the WHO position came originally from uncontrolled studies using nonrandom samples and, subsequently, from surveys and laboratory studies indicating that economic incentives can “crowd out” (decrease) intrinsic motivations to donate and can attract “worse” donors (9). This evidence arguably affected policies, such as bans on compensation for blood and organ donations in many countries. Surveys allow for a variety of hypothetical manipulations on large samples, and laboratory experiments parallel laboratory health research methods by enabling researchers to carefully control the setting, randomize the assignment of treatment, and identify causal effects. Because compensation is illegal in many countries and observing blood donations is often costly (as only a small share of subjects invited to donate actually do so), surveys and laboratory studies retain an important role for addressing many questions (10). Yet it is unusual for health policy to rely only on such evidence. Complementary, randomized field trials are the norm and are recommended before policies are affected (11). With a few early exceptions based on small, nonrepresentative samples (12), field trial evidence on how economic incentives affect blood donations has been absent. But field-based evidence from large, representative samples has recently emerged. The results are clear and, on important questions, opposite to the uncontrolled studies, surveys, and laboratory evidence preceding them. |
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Paying for Kidneys? A Randomized Survey and Choice Experiment
Fellow: Mario Macis Abstract: We conducted a randomized survey with 2,666 US residents to study preferences for legalizing payments to kidney donors. We found strong polarization, with many participants supporting or opposing payments regardless of potential transplant gains. However, about 18 percent of respondents would switch to favoring payments for sufficiently large increases in transplants. Preferences for compensation have strong moral foundations; participants especially reject direct payments by patients, which they find would violate principles of fairness. We corroborate the interpretation of our findings with a choice experiment of a costly decision to donate money to a foundation that supports donor compensation. |
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Sacred Values? The Effect of Information on Attitudes toward Payments for Human Organs
Fellow: Mario Macis Abstract: Are attitudes about morally controversial (and often prohibited) market transactions affected by information about their costs and benefits? We address this question for the case of payments for human organs. We find in a survey experiment with US residents (N=3,417) that providing information on the potential efficiency benefits of a regulated price mechanism for organs significantly increased support for payments from a baseline of 52 percent to 71 percent. The survey was devised to minimize social desirability biases in responses, and additional analyses validate the interpretation that subjects were reflecting on the case-specific details provided, rather than just reacting to any information. |
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Hayek on complexity, uncertainty and pandemic response
Fellow: Mark Pennington Abstract: This paper draws on Hayek’s distinction between simple and complex phenomena to understand the nature of the challenge facing policymakers in responding to the new coronavirus pandemic. It shows that while government action is justifiable there may be few systemic mechanisms that enable policymakers to distinguish better from worse policy responses, or to make such distinctions in sufficient time. It then argues that this may be a more general characteristic of large-scale public policy making procedures and illustrates the importance of returning to a market-based political economy at the earliest convenience. Keywords: Hayek, Pandemics, Complexity, Uncertainty, Public policy |
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Robust Political Economy and the Priority of Markets
Fellow: Mark Pennington Abstract: This essay offers a “nonideal” case for giving institutional priority to markets and private contracting in the basic structure of society. It sets out a “robust political economy” framework to examine how different political economic regime types cope with frictions generated by the epistemic limitations of decision-makers and problems of incentive incompatibility. Focusing on both efficiency arguments and distributive justice concerns the essay suggests that a constitutional structure that prioritizes consensual exchange is more likely to sustain a cooperative venture for mutual advantage. Keywords: Nonideal theory, robust political economy, markets, democracy, comparative institutions |
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Hayekian Political Economy and the
Limits of Deliberative Democracy Fellow: Mark Pennington Abstract: Inspired by Habermasian critiques of liberalism, supporters of deliberative democracy seek an extension of social democratic institutions to further a reinvigorated communicative rationality against the ‘atomism’ of market processes. This paper offers a critique of deliberative democratic theory from a Hayekian perspective. For Hayek, the case against the social democratic state rests with the superior capacity of markets to extend communicative rationality beyond the realm of verbal discourse. |