Investing to Save Lives

post by thejp · 2020-07-31T09:37:17.443Z · score: 7 (4 votes) · EA · GW · 2 comments

I understand that donating can save lives in developing countries, perhaps as low as hundreds of dollars per life saved.

If that's true, is the limiting factor really getting enough funding, or is it something else like logistically getting vitamins, anti-mosquito nets, etc to the people?

And if funding really is a limiting factor, why isn't there an investment organization that one could buy bonds from, which would then save people's lives as a loan, and ask them to repay it back over a medium term time frame? I know that labor in developing countries is poorly compensated, but if the cost to save a life is really just hundreds of dollars, then surely the labor could pay that back profitably over some time frame?

Is there something like this already?

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comment by EdoArad (edoarad) · 2020-07-31T15:27:14.668Z · score: 2 (1 votes) · EA(p) · GW(p)

This is a nice idea which, if developed in a particular way, can lead to microcredit. This is the concept of giving small loans to individuals in developing countries, with comparatively little interest rate (though still larger than what we have at developed countries). There has been analysis by the EA community of microcredit, such as this report by SoGive [EA · GW], which you might be interested in.

Another thing that comes to mind is trying to sell products such as bednets directly to locals. They cost about $4-5 per net, which includes all the costs of manufacturing, distribution etc. That means that to get profit and to handle sales would (probably) cost some more. That's seems like a good bargain, but when the absolute poverty line is at about $2 a day, that makes it tough to save up. I imagine problems might show up because if you want to have bednets in the quality of AMF, these would cost much more than bednets of poorer quality and I'm not sure that the consumers could really tell the difference. Note that it's not that bednets by themselves save lives, but rather that they help mitigate some risks. For people in extreme poverty there is a wide range of risks to manage and possibilities for investments (say a steel roof instead of straw or an ox for farming), and it is actually not clear that buying a good bednet is actually the best use of money or that they understand it.

From the little I know of life in extreme poverty, the situation around loaning is complicated. Generally, interest rates are sky high - something enormous like 200% per few weeks, if I remember correctly -  and there is a big risk that people can't pay back. There is also a real difficulty in the infrastructure involved, and possible corruption.

I'm interested in hearing out people more knowledgeable than myself.

comment by brb243 · 2020-07-31T16:58:54.477Z · score: 1 (1 votes) · EA(p) · GW(p)

(reference to a Nigerian social impact bond here) "Investors can opt to purchase Babban Gona’s Raise Out of Poverty bond (ROPO). ROPO is Nigeria’s first social impact bond that enables investors attain a reasonable return on their investment" I wonder if social impact bonds have been considered by EA - or, if these are not where EA has comparative advantage, at least static.

Perhaps social impact bonds create additional impact for every bond purchased - room for investment is limited only by the capacity of persons to increase their income. This contrasts with impact investment to specific companies (e. g. those that are competitive at gaining capital) where additional investment may displace someone else's investment - research by Founders Pledge.

Also, check out this comment [EA(p) · GW(p)].