31 March 2015

Diversity and biodiversity

Jonathan Franzen writes about biodiversity and whether the emphasis on climate change is diverting worthwhile effort and resources away from conservation. He visits Costa Rica and looks at conservation efforts in the northern dry-forest region of Guanacaste:
The question that most foreign visitors to Guanacaste ask is how its model can be applied to other centers of biodiversity in the tropics. The answer is that it can’t be. Our economic system encourages monocultural thinking: there exists an optimal solution, a best conservation product, and once we identify it we can scale it up and sell it universally. As the contrast between Amazon Conservation and the A.C.G. [Área Conservación de Guanacaste] suggests, preserving biological diversity requires a corresponding diversity of approach. Carbon Capture:Has climate change made it harder for people to care about conservation?, Jonathan Franzen, 'New Yorker', dated 6 April
This is something I've been advocating for years: to solve our biggest, most complex social and environmental problems we urgently need diverse, adaptive approaches. Social Policy Bonds would encourage such approaches in ways that current policy cannot. Yes, we need some high-level direction as to which objectives we should pursue, and yes, we need some broad system of revenue raising to finance the achievement of some of these goals. But we do not need top-down, one-size-fits-all, programmes based on fossilised science that have been tried, tested and (for the most part) failed. The world is too complex for that.

A Social Policy Bond regime would reward those who achieve such long-term goals as maintaining or increasing biodiversity, without stipulating how these goals shall be achieved. Government, or a group of governments or non-governmental bodies or philanthropists could work together to articulate society's goals and raise revenue for their achievement. But the actual achieving would be done by bondholders (or people paid by bondholders) who would be motivated to form a coalition of interests entirely devoted to achieving society's goals with maximum efficiency. This coalition would probably vary in composition and structure over time, as would the projects it initiates. But at any one time, the market for the bonds would ensure that only the most efficient programmes will be implemented.

22 March 2015

The role of government? To extract revenue

David Graeber began this piece by writing about Ferguson in the US, and the criminalisation, in the US, of violations of administrative codes:
Almost every institution in America—from our corporations to our schools, hospitals, and civic authorities—now seems to operate largely as an engine for extracting revenue, by imposing ever more complex sets of rules that are designed to be broken. And these rules are almost invariably enforced on a sliding scale: ever-so-gently on the rich and powerful (think of what happens to those banks when they themselves break the law), but with absolute Draconian harshness on the poorest and most vulnerable. Ferguson and the Criminalization of American Life, David Graeber, 19 March
I don't think this should greatly surprise us. Government, like any other big organization, has as its one over-arching goal that of self-perpetuation. Like churches, trade unions, universities or any other institution, governments usually start out meaning well, and are staffed by hard-working and, often, individually ethical employees. But at some point the organization's stated objectives are forgotten and we end up with scenarios similar to that which Mr Graeber describes. Government bodies don't face the discipline of markets or competition and if they limit their corrupt behaviour to the less powerful, they can get away with it indefinitely.

Social Policy Bonds are a means by which any organization trying to achieve social goals will always be focused entirely on those goals. The very structure and composition of the organizations would be determined, dynamically, by their need to achieve society's goals as efficiently as possible. And it is society's goals that they would be achieving: their own goals, including that of self-perpetuation, would be subordinated to those goals set by society and targeted by Social Policy Bonds. It's a stark contrast between a bond regime that articulated society's wishes and rewards those who achieve them, and today's world, in which even those bodies charged explicitly with looking after the public interest end up in conflict with it. Or, as Mr Graeber concludes:
Most Americans no longer feel that the institutions of government are, or even could be, on their side. Because increasingly, in a very basic sense, they're not.

06 March 2015

Tried, tested and failed

Concluding a piece about the growing dangers arising from nuclear proliferation the Economist says:
But for now the best that can be achieved is to search for ways to restore effective deterrence, bear down on proliferation and get back to the dogged grind of arms-control negotiations between the main nuclear powers. The unkicked addiction, 'the Economist', dated 7 March
My question is twofold: who will do the searching and what incentives will they have to get it right? On present trends we can be pretty sure that responsibility for a nuclear exchange-free world will fall to nationalist politicians, corrupt bureaucrats (national or United Nations), well-meaning bureaucrats (same) or well-meaning, dedicated but underfunded people working for non-governmental organizations. The same people, in short, who have collectively brought us, let's be factual, to the brink of nuclear catastrophe.

It's not just the identity of these people that's the problem; it's also that they have little financial incentive to maintain nuclear peace. They are not paid according to performance. So they have little incentive to explore innovative ways of forestalling proliferation or use of nuclear weapons that might do a better job than the existing, tried tested and failed methods.

I can't suggest 'ways to restore effective deterrence' but I can suggest a way that would encourage others to find such ways, and reward those that are successful. We could issue bonds that become redeemable only after a sustained period - thirty years, say - of nuclear peace. It would be up to the resulting coalition of motivated bondholders to explore the best ways of taking all the steps necessary to bring about that goal. These would probably include measures that existing bodies, because of their status or their short time horizons, do undertake nowadays, including, for example, building trust between schoolchildren of all nationalities and religions. Approaches encouraged by such Conflict Reduction Bonds would be diverse, because one single approach will not work, and adaptive, because the most effective measures are likely to change with time.  For a longer essay click here, and for the application of the Social Policy Bond principle to the Middle East click here.