A Freakonomics Quorum: How to Save the African Rhino?

A reader named James Thompson recently sent in a request for help in solving a wildlife conservation problem. We decided to put the question to a set of diverse, smart people we know or tracked down, who might have particular insights to this particular problem.

As such, we bring you the inaugural Freakonomics quorum, composed of the following group: the Columbia University economist Ray Fisman; Houston Zoo director and International Rhino Foundation Board member Rick Barongi (who recently spent ten days visiting Zimbabwean and Botswanan rhino conservation projects); University of Chicago economist and TED Conference speaker Emily Oster; and Brian Mullaney, president and co-founder of the SmileTrain charity. Sadly, nobody suggested the first solution that came to my mind: flood the Zimbabwe market with fake rhino horns.

Here is Thompson’s question and, below it, the quorum’s responses:

I am an Australian veterinarian who is a member of the SAVE Foundation of Australia, which is a wildlife conservation group that works on African wildlife conservation projects — some in conjunction with World Wide Fund for Nature and the International Rhino Foundation. We are raising funds and there is internal debate on whether we spend the money in a corrupt, economically distressed country like Zimbabwe, where rhinos are under severe poaching threat, or Botswana, a neighbouring stable, well-run, minimally corrupt country where poaching stresses are less high. Are there any tools we can use to make the decision as to which would ultimately protect more rhinos?

Secondly, are there better models for rhino conservation than:

a) Intensive protection zones with a shoot-to-kill policy? (Rhino horn trade strictly illegal.)
b) Legalisation of the rhino horn trade using horns safely removed from legally immobilised rhinos under strict government control? (The southern white rhino is relatively prolific and well managed within South Africa).

Ray Fisman:

The basic economic notion that governs the Zimbabwe-versus-Botswana choice, and every other trade-off in life, is marginal analysis. That is, you would like to compare the incremental impact of additional aid dollars on rhino survival in the two countries, and spend your dollars where this incremental impact per dollar is greatest.

But where is the incremental impact of an aid dollar greater: Corrupt but very needy Zimbabwe, or relatively clean but comfortably well-off Botswana? This is a question that development economists ask not just about rhinos, but development aid generally, and different economists reach very different conclusions. One view is that the incremental benefit of a mere penny of aid money is greater to a poor Zimbabwean earning less than a dollar a day than a dollar would be for his relatively rich neighbor in Botswana.

So even if 98 percent of assistance is stolen, we’re still better off channeling our aid dollars to Zimbabwe. Most academic economists would take issue with this view: by continuing to channel resources into corrupt countries, not only are we failing to maximize the impact of our aid dollars; we may even be encouraging the continuation of corrupt regimes, who see no punishment for bad behavior. The idea of rewarding good behavior is motivation for the U.S. government’s Millennium Challenge Account, which gives aid money to poor countries that meet certain conditions of government honesty and functionality.

But you need not simply choose between Zimbabwe and Botswana. Suppose you feel that anti-poaching programs in Botswana don’t need your money (so extra aid dollars simply go towards oak paneling in game wardens’ offices, for example), and dollars shipped to Zimbabwe would be stolen at a rate of 99.5 cents on the dollar. Why not effectively put the funds in escrow to finance future conservation projects in Zimbabwe, in the event that the country mends its wayward and corrupt ways? Or alternatively, why put all of your rhino aid dollars in one basket? If it is feasible, you may consider running pilot aid projects in both countries and scaling up the efforts that are generating better rhino conservation returns.

Rick Barongi:

Why Support Rhino Conservation in Zimbabwe? We all know that Zimbabwe has enormous financial and ethical problems, but this should not deter conservation organizations from supporting wildlife protection programs.

Getting the money and resources to the “front lines” and avoiding governmental corruption is a challenge, but the alternative is far worse. Waiting for the political climate to change may be too late to save the approximately five hundred black rhinos that reside in the national parks, conservancies and Intensive Protection Zones of Zimbabwe.

Poaching is on the rise, and crippling wire snares are being removed from rhino feet and necks in almost all of the protected areas. Were it not for the courageous efforts of a few conservation heroes, the rhino population in Zimbabwe would be in much worse shape.

A key role of the International Rhino Foundation is to visit these rhino conservation hot spots and to evaluate the need and urgency, while also determining the best method of getting funds and equipment to the field conservation staff. We deal directly with responsible wildlife authorities to ensure that all funds are utilized for the intended purposes. We have very good contacts in Zimbabwe, despite the current political and economic turmoil.

Botswana has a much smaller population of black rhinos (six animals) and they are not in any immediate danger, compared to the Zimbabwe populations. This country also has greater financial resources to protect their wildlife.

Conservation Models:
There is no one best rhino conservation strategy that works in all countries. We must constantly evaluate the changing political and wildlife landscapes. There are many variables that must be factored into an international conservation program. The white rhino conservation model that works so well in South Africa would not be effective in Zimbabwe. Some of the major considerations are: governmental stability, local community support, in-country agencies/non-government agencies, and the expertise and commitment of the local conservationists. Conservation in these “corrupt and economically distressed countries” cannot afford to wait for a better time and a less corrupt administration. Ignoring countries in their most critical time of need is not a viable conservation strategy.

Emily Oster:

This is a great set of questions with a lot of good economic content.

Let me address first the issue of which place you should think about investing your money. As with any decision like this, you need to know first what you are trying to maximize. I am going to assume that what you are interested in is total rhino survival. Given that survival is what you want, and you have some fixed amount of money, you want to use the money in whatever way gets you the most rhinos saved – maximize rhinos per dollar. To get here, we don’t use much economics.

Now let’s think about your two areas: Zimbabwe and Botswana. To really answer this specific case, I would need to know more about the enforcement technologies in both places. But I can imagine a scenario like the following: if I send a ranger out in Zimbabwe, there is a good chance that he will find a poacher, but also a good chance that the poacher will be able to buy him off. If I send one out in Botswana, there is less chance of finding a poacher, but once one found, he will be punished.

And let’s further assume that we actually know about all of these probabilities – the probability of finding a poacher in each place, and the probability of the poacher getting away with it even if found. If you know that, we can figure out what to do with your money.

One possibility is that you are forced to allocate all of your money to one country or another. In that case, you should simply figure out – based on the probabilities discussed – what the total poachers captured will be in each place, given your funding, and allocate the money there.

A more interesting scenario, from an economic perspective, is one in which you have the option to allocate money to both places. The key to deciding how to allocate is that you want to think about the marginal value of the last dollar you put in, not the average value of all dollars. That is, you should allocate the money such that if you had one more dollar, you would be indifferent between giving it to Zimbabwe or Botswana. This is pretty well illustrated by thinking about the decision process. Let’s talk in terms of rangers hired, rather than dollars, just for simplicity. When you think about allocating the first dollar, you think about the value of the first ranger in each place. Let’s say that it’s higher in Botswana because, even though there aren’t that many poachers, with just one ranger his chance of finding one is high, and poachers get prosecuted for sure. So the first dollars are spent on a ranger for Botswana.

Then you think about the second ranger. The return to this ranger in Botswana is lower than for the first, because there is congestion: more rangers per poacher means less chance of any individual ranger catching one (although the total chance will be larger). The return to that second ranger in Zimbabwe, however, is the same as it was when we were thinking about the first ranger, since we have not put any rangers there. That means that even if Botswana dominated when we were thinking about the first ranger, Zimbabwe may dominate when we think about the second, since the return in Zimbabwe stayed the same and the return in Botswana has gone down. So maybe the second ranger goes to Zimbabwe.

You can keep deciding this way until all of your money is used up. The key is that at each decision you think NOT about the average value of a ranger in each place, but the value of the next (the marginal) ranger. In this way, you can maximize your total number of animals saved.

The second question you asked was about regulation of trading versus prohibition. In general, this depends a little bit on your goals, I think, as well as on the regulatory situation. There are some activities that we tend to think are good to ban – murder is a good example – simply because no amount of it is okay. There are other activities – say, prescription drug use – which we regulate but do not ban, largely because some of them are good, even if totally unrestricted use might not be. If your feeling is that no rhino horn removal is acceptable in some moral sense, you may have no choice but to ban. If your goal, on the other hand, is preservation of the species, you may well be better off with a form of regulation, which means some hunting but (hopefully) limits the chance of extinction.

How well regulation works, however, does depend a lot on the circumstances that the country faces. A good example, I think, is prostitution. It is legal in some places, like Amsterdam, where it seems to go on with relatively little abuse of the participants and limited spread of disease. It’s also legal in places with less strong regulatory environments (Thailand, Cambodia) where it goes along with more abuse and more disease, and significant non-regulated activity. If the regulatory body is not able to enforce things, you could end up with the legal horn removal plus no reduction in illegal hunting, which would presumably be the worst of both worlds.

A final note on this: if one was in favor of regulation, there is more than one way to do it. From the wording of the question, it seemed like you were discussing quantity regulation. Price regulation is another way to go – in short, taxes. High custom duties or taxes could, in theory, raise the price enough to lower demand to the same level you could get through regulation. Depending on how these are executed, they could be more efficient.

Brian Mullaney:

Our charity always prioritizes places where the need is greatest, regardless of other challenges. We do this because:

1. The greater the need, the greater the impact.
2. We are confident that we can come up with strategies, practices and innovations that can overcome obstacles such as corruption, violence, poverty, etc.

One of the biggest problems that very poor and very corrupt countries face is that people write them off as hopeless and move on to easier countries to work in.

Many people asked us why we even bothered to bring our free cleft surgery programs to Africa since the continent has so many “bigger” medical problems. Thankfully for the 2,000+ children we have operated on in 18 months, we ignored this advice. It is true that Africa has much “bigger” medical problems than cleft lip and palate. The difference is we have the cure for clefts today and can help every single child with a cleft – while most of the “bigger” medical problems are still in search of a cure.

I don’t have any idea when the major players in Africa will figure out how to solve malaria, TB, AIDS, River Blindness, corruption, violence, etc. or how many billions of dollars it will cost. I do know that we have a program that can help every single child with a cleft in Africa – and the world – today for $250 per child. With a simple surgery that takes as little as 45 minutes and has a 99.99% success rate.

When I was in Northern Uganda recently, I visited a 10-year-old girl upon whom we had operated at her home, a frail, thatched hut with a mud floor that she and her mother and six brothers sleep in every night. (The father had died of AIDS months earlier.) They showed me a bowl in which they light a fire every night to fill the hut with smoke, as a means of keeping out mosquitoes. Of course it doesn’t work, and each of the children has had malaria several times. $1.5 trillion in aid has poured into Africa over the past 50 years to tackle the “bigger problems,” and yet nobody has figured out how to get this family a simple, $4 insecticide-treated anti-malarial net.

Somehow, we figured out in our first 12 months how to get this 10-year-old a $250 cleft surgery. So my advice would be: don’t be afraid to go to the most difficult places and tackle the toughest challenges. I would recommend that you focus where the need is greatest — Zimbabwe — and where your work will have the greatest impact. You can figure out how to overcome whatever obstacles you face. We wish you luck.

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  1. Pablo says:

    Readers might also be interested in a related op-ed in the NY Times last year, entitled: “Sell the Tiger to Save It”:

    “At present there is no incentive for forest dwellers to protect tigers, and so poachers, traffickers and unscrupulous traders prevail. The temptation of high profits, in turn, attracts organized crime; this is what happens when government regulations subvert the law of supply and demand.”

    “But tiger-breeding facilities will ensure a supply of wildlife at an affordable price, and so eliminate the incentive for poachers and, consequently, the danger for those tigers left in the wild. With selective breeding and the development of reintroduction techniques, it might be possible to return the tiger to some of its remaining natural habitats. And by recognizing the rights of the local villagers to earn legitimate revenue from wildlife sources, the tiger could stage a comeback.”

    http://select.nytimes.com/search/restricted/article?res=FA081FF83C5A0C768DDDA10894DE404482

    The idea is that instead of pricing the tiger at zero and creating a profit opportunity for poachers, instead use property right to enable the business of tiger farming. Similiar approaches had a positive impact with the US bison in the 19th century. As Lynn Kieslig puts it:

    “Defining property rights over resources that have value, including wildlife, increases the likelihood that they will avoid extinction due to poaching.”

    http://www.knowledgeproblem.com/archives/001719.html

    It also would have been great to get Richard Leakey for this forum. He’s fantastic.

    http://www.amazon.co.uk/Wildlife-Wars-Battle-Kenyas-Elephants/dp/0333745663

    http://en.wikipedia.org/wiki/Richard_Leakey

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  2. Pablo says:

    Readers might also be interested in a related op-ed in the NY Times last year, entitled: “Sell the Tiger to Save It”:

    “At present there is no incentive for forest dwellers to protect tigers, and so poachers, traffickers and unscrupulous traders prevail. The temptation of high profits, in turn, attracts organized crime; this is what happens when government regulations subvert the law of supply and demand.”

    “But tiger-breeding facilities will ensure a supply of wildlife at an affordable price, and so eliminate the incentive for poachers and, consequently, the danger for those tigers left in the wild. With selective breeding and the development of reintroduction techniques, it might be possible to return the tiger to some of its remaining natural habitats. And by recognizing the rights of the local villagers to earn legitimate revenue from wildlife sources, the tiger could stage a comeback.”

    http://select.nytimes.com/search/restricted/article?res=FA081FF83C5A0C768DDDA10894DE404482

    The idea is that instead of pricing the tiger at zero and creating a profit opportunity for poachers, instead use property right to enable the business of tiger farming. Similiar approaches had a positive impact with the US bison in the 19th century. As Lynn Kieslig puts it:

    “Defining property rights over resources that have value, including wildlife, increases the likelihood that they will avoid extinction due to poaching.”

    http://www.knowledgeproblem.com/archives/001719.html

    It also would have been great to get Richard Leakey for this forum. He’s fantastic.

    http://www.amazon.co.uk/Wildlife-Wars-Battle-Kenyas-Elephants/dp/0333745663

    http://en.wikipedia.org/wiki/Richard_Leakey

    Thumb up 0 Thumb down 0
  3. dadakim says:

    this comment is for James – for the microlevel issues (translation: for the handling “on the ground” once you allocate how much to each country), i strongly suggest reading Politicians and Poachers by Clark Gibson. His work has focused mostly on Zambia, but I think at the local level, his work will be really informative for your questions. best of luck – i’m glad to see someone is working hard for rhinos – they are magnificent animals.

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  4. dadakim says:

    this comment is for James – for the microlevel issues (translation: for the handling “on the ground” once you allocate how much to each country), i strongly suggest reading Politicians and Poachers by Clark Gibson. His work has focused mostly on Zambia, but I think at the local level, his work will be really informative for your questions. best of luck – i’m glad to see someone is working hard for rhinos – they are magnificent animals.

    Thumb up 0 Thumb down 0
  5. bmc says:

    Fascinating piece

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  6. bmc says:

    Fascinating piece

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  7. pparkman says:

    My impression is that the non-economists gave advice which was much more useful, and significantly less patronizing than the economists.

    And the good answers agree that you confront the problem rather than theorize around it.

    Thumb up 0 Thumb down 0
  8. pparkman says:

    My impression is that the non-economists gave advice which was much more useful, and significantly less patronizing than the economists.

    And the good answers agree that you confront the problem rather than theorize around it.

    Thumb up 0 Thumb down 0