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.


Pablo

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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dadakim

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.

bmc

Fascinating piece

pparkman

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.

egretman

Isn't it strage that there is no one model, economic or otherwise, for solving these problems yet? Any of us could sit here and reel off 1000 examples of greed, poaching, and habitat loss effects on endangered species over the last 100 years.

Yet, there is no one solution or even list of solutions, even after billions of dollars and untold good intentions. People like James Thompson set out anew each time full of good will and ineffective groping of the darkness.

That speaks volumes.

frankenduf

perhaps socializing profits made from legalizing/regulating the (white) horn trade could bolster a needed strong PR campaign to control the market

clsand99

I believe that if someone is determined to spend money to save these animals, then he should build a nice, modern hotel & advertise in Western Europe & America for "safari" tours of the fabulous & endangered rhino. May even need to subsidize this tourism by keeping costs below expenses. By keeping costs low, he'd ensure a constant stream of wealthy visitors, who will spend a lot of money in the local markets, where tourism dollars will make the locals insist that the rhinos be protected. In other words, you have to have the locals on your side here. And you can't expect them to be on your side without a financial incentive that is greater than the financial incentive to look the other way, or to actually be actively involved themselves in the illegal poaching.

egretman

The really sad aspect of all of this is that James Thompson, despite all obvious good will, is just talking about saving the Rhino as DNA. Yes, and maybe enough habitat to keep them out of the zoo.

But African wildlife is or was not that! It was wildlife as spectacle. The Africa we all see on TV. Vast open places. Millions of animals. The wonder of it all.

How many of you look at a fenced in group of 100 American Buffalo and feel the wonder of the American great plains. No one!

But their DNA is saved. Whoooohoooo! Or should I say, whoooped-dee-doooo?

ThisManMustBeStopped

Has anyone figured out the market value of all the real property in Zimbabwe? It has to have decreased dramatically in value since Mugabe started his "land reforms".

Buying Zimbabwe and having it annexed by Botswana would certainly sidestep the problem of which country to give the money to.

bodracir

I have to agree with pparkman. The answers by the economists left me with a feeling that they grabbed a textbook (Emily Oster's response is fascinating and theoretically flawless but at the same time extremely naive if she thinks those principles can be put in practice in this situation) and produced suggestions based on checkmarks they had placed there while in grad school; the problem: no insight into the true issues faced by those who are trying to solve this problem. (The suggestion of putting the money on an escrow to finance future projects is hilarious... the rhinos will be gone by then!)

In any case, this "consult the experts" idea is great. I just wish they had discussed the conservation models in greater length. I get the feeling that the legalisation model would work well if enough horns can be put in the market, and also assuming that rhinos can have a normal life without them.

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lnhlst

It's not Botswanan, it's Batswana (plural) or Motswana (singular) (both adjective and noun).

egretman

My impression is that the non-economists gave advice which was much more useful

I don't know, but I do know that economic solutions to wildlife problems have been all the rage in the last 20 years or so. So the fact that Dubner's little exercise results in some shallow economic thinking that comes from 400 word essays on the topic is not a real surprise.

The question that should have been explored is,

Have economic solutions to wildlife been successful? If so, where and how?

CDButler

Why doesn't one of the governements simply sell the rights to manage the rhinos. A private company could profit from selling the rhino and their various products and then it would be in their vested interest to preserve the rhino. Theres no threat of extinction to cows and chicken.

tmitsss

Why not get on of the Drug companies selling ED treatment to sponsor the Rhino's. I was hopeful that Viagra would save the Rhino, thinking a real drug would displace the mythical.

kentavos

1. Criticism of economists as stuffy academics with no real world experience is both unhelpful and immature.

2. The question is poorly framed and ill-suited for a one way response. You would have to know how the money would be spent to properly decide where the greater impact would occur.

3. The real benefit that the panel and this forum could offer is by brainstorming alternative methods of conservation, like 'ThisManMustBeStopped' and 'clsand99' did.

hhadzimu

CDButler
I was going to say the exact same things. Legalization of the trade and property rights to animals would help conservation in two ways. [In case we're wrong, keep a few on a reservation.] But first, the profit incentive will drive private owners to properly manage their animals for highest long-term profit. Rhinos aren't particularly well-suited for domestication, but they can be managed in the wild, and as long as someone is making money off them, they will be alive. Isn't that the goal?
Secondly, instead of flooding the market with fake rhino horns, as Dubner suggested, it would increase the supply of legitimate horns, dropping the price from its black market high, lowering the incentive to poach the animals that remain in the wild.
Surprised, to be honest, that this wasn't raised by our distinguished panel. [Emily, I'm a big fan!]

egretman

A private company could profit from selling the rhino...There's no threat of extinction to cows and chicken.

Well, rhinos don't lay eggs and they are hell on fences. If wildlife people really thought that they were saving the rhino by making them “cows and chickens”, they would all kill themselves

But first, the profit incentive will drive private owners to properly manage their animals for highest long-term profit

Are you guys economists? Private property is the basis of all capitalist thinking. Private property ownership is not respected in the problem areas. Who do you buy from? How do you keep it? Believe me, if buying the habitat was all that was needed. It would have been done a long time ago. Bunch of white people buying Africa. Yeah, that will work!

Doug

"My impression is that the non-economists gave advice which was much more useful"

I'm not sure I agree with this comment. The economists certainly framed and discussed the issue more accurately. The issue is to save more rhinos.

The non-economists talk about Zimbabwe having more issues, and need, and therefore that is where the money should go.

I think economic argument of putting the money where you get the greatest marginal return is the right answer.

Many non-profit strategies are emotionally based, and it's easy for them to loose focus on the goal. The goal is to save rhino, then let's do that. Let's not delude ourselves into thinking that attempts to save rhinos in Zimbabwe will help solve problems of government corruption, and other social ills in that country.

Maybe Zimbabwe is the place to spend the resources, but it is the marginal return analysis that will help decide that. If corruption or other forces are too great that there is no benefit to the rhino from spending the resources there, then the decision seems easy.

Focus on the rhinos, people!!

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athorny

Coming from a Zimbabwean family with a great love of the bush and formerly involved in commercial farming, I have the following comments:

Rick Barongi is on the right track when he talks about 'conservation heroes' and their contacts on the ground.

These 'conservation heroes' like the Travers on Imire farm in Wedza relied on tourism to help support their conservation efforts. They are the only farm left in the Wedza area and this tourism has dried up. Direct support of conservancies, outside of government channels, can allow effective help to go directly where it is needed.

hhadzimu - you have an assumption that rhino's are not suitable to domestication. While obviously not ideal and not in the wild, the Travers have raised about 8 orphaned calves into a herd that has bred. The herd is marshalled daily into a pen for protection by former cattle herders.

As with many many aid initiatives, aid that goes via government is questionable, at best. Aid that goes directly to the beneficiaries is always going to be more beneficial.

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procrastinating_econ

"I think economic argument of putting the money where you get the greatest marginal return is the right answer."

This is obviously the right 'methodology' to go about, but not really an answer.
First of all, why the heck is saving rhinos so important? In terms of marginal analysis there are better ways to invest that money even in terms of development needs etc!

Given that the person/organization doing the spending decides this normatively, then we can try to find the optimal strategy for saving them.

But if the money has to be generated via charity, then I would recommend the donors to think carefully about which charity to give the money to. And I am also not so sure how important is it to save Rhinos when compared to other social issues!

So Fisman, Oster etc, etc have done the easy job in this case. The hard part is to figure out how should one make these normative decisions! But unfortunately, standard economic theory doesn't have much of a clue about it.

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