OPINION: Ebola and Irrational Exuberance for Social Impact Bonds and Social Enterprise
Wednesday, October 1, 2014
The well-respected New York Times columnist Nicholas Kristof penned a compelling analysis about the failure of the response to the Ebola epidemic. He argues that “it’s imperative to stop infectious diseases early,” emphasizing the importance of childhood vaccines and other early interventions, and he worries that efforts to finance responses to Ebola will come at the cost of diverting funding from providing vaccines or fighting hunger.
Clearly a major need in the countries facing the Ebola epidemic is investment in order to build modern health systems and to remedy shortages in human resources such as trained doctors and nurses. For example, prior to the outbreak of the Ebola epidemic, there were fewer than 200 doctors available for Liberia’s nearly 4 million people; since the outbreak, the number of doctors has dropped to about 50 as doctors have fled the country. Kristof argues that tons could be done if the U.S. invested in health rather than our ever-expanding military.
However, Kristof’s argument includes an odd diversion to suggest the “market failure” that explains dysfunctional government efforts, whether fighting Ebola or reducing prison recidivism, could be addressed by “new financial instruments—social impact bonds…[that] pay for job training or early education programs and then earn a financial return for investors when the government saves money.” Is Kristof hinting that social impact bonds could be used as a tool for dealing with the health issues facing countries in West Africa, or even confronting Ebola?