Right now, the international community is frantically working to contain the West African Ebola outbreak. But long after the current epidemic is brought under control, Ebola could continue to have profound economic effects on West Africa. A recent World Bank report found the outbreak could cost West African nations $32.6 billion by the end of 2015. That's around 2.5 times the annual GDP of Sierra Leone, Liberia, and Guinea, together.
Mead Over, a senior fellow at the Center for Global Development, was one of the co-authors of that report. He spoke to Vox about the uniquely heavy economic effects of an infectious disease.
Danielle Kurtzleben: How do you think the containment is going?
Mead Over: I think the international community is still trying its best to play catch-up. I think the effort that's being extended is extraordinary and commendable, but the scale-up of Ebola treatment units and of contact tracing looks to me from the outside as if it continues to be linear: you build one unit, and then you build another unit and build a third unit, and that makes three, and that's a linear progression.
Whereas, as we know, epidemics spread in a non-linear fashion; they are exponential. Each patient creates two patients. Each of those creates two more, and each of those two more.
So as long as the epidemic continues to spread exponentially and intervention linearly, despite the prodigious effort, the international community is not doing enough to contain the epidemic.
DK: What would "enough" look like? More spending? More doctors?
MO: I think that so far, I have not noticed that the funding itself is constrained. I think the constraint has been the sheer difficulty of building out the Ebola treatment centers, and particularly staffing them.
What I still don't understand is whether the international community has a plan for how to put properly trained, properly motivated, properly paid, and properly relieved health personnel in the Ebola treatment units.
So that's part of the answer. But the other part of the answer is that it's mathematically impossible for a linear progression to catch up to an exponential one, so we need to do something to ensure that the progression of the epidemic, in terms of new cases, slows down in other ways, other than through the construction of treatment units.
DK: You've written about how Ebola has both direct and indirect economic effects. Could you explain how those different pathways work?
MO: Health economists talk about direct and indirect effects with ordinary disease, like cancer or diarrhea, where the direct effect is the treatment expense, or it could be also the prevention expense, and indirect effect is actually the lost labor.
In the case of an epidemic like SARS, H1N1, or Ebola, there's an additional effect beyond the direct and indirect effects. and that additional effect can be summarized by the term "aversion behavior." Aversion behavior is behavior that people engage in which leads them to do things differently than they would in the absence of the epidemic and reduces economic activity.
We can talk about this as fear, but it's only partly fear, because some people will, for example, stay away from a place of work because they fear infection. But other people will stay away from that same place of work because they know it will be inactive due to other people's fear.
Some people might fear to be tourists in Liberia because they are themselves afraid of infection. But the tourist companies, some of them, are traded on the public stock market. There will be other people who avoid or sell the shares in those tourism firms not because they themselves are afraid, but because they anticipate the fear of others.
Aversion behavior can be extraordinarily detrimental to economic growth. And in the case of the SARS epidemic there was one estimate by Lee and McKibben that the total economic impact of the epidemic was $40 billion, even though there were only 800 deaths. And almost all of that $40 billion was due to aversion behavior, not to what economists call the direct and indirect effects of the epidemic on those 800 people.
So this aversion behavior, in the case of these rapidly spreading, fear-inducing epidemics, accounts typically for the vast majority of the economic impact.
[At the World Bank] we classified as domestic aversion behavior things like a reduction in labor force participation due to fear or the anticipation of others' fear. And we classified as an international aversion behavior a reduction in the capacity utilization of capital that we observed was being caused by the owners of factories not being willing to continue the factories' activity at its usual pace, because either they're not in the country and can't supervise, or they might fear that others might not buy a product from Liberia at this time.
DK: How do you stop that aversion behavior?
MO: Our paper concluded that the international community should do its best to fund what I might call health-secure transportation links to other countries.
In other words, we argued against the travel ban on the grounds that that would exacerbate the international aversion behavior.
I actually think the domestic aversion behavior [within West African nations hit hardest by the epidemic] will dissipate over time, due to the natural human tendency to become habituated to risky environments. So I think people will start going back to school, start going back to work, and so forth.
But the international aversion behavior, which is the avoidance of trade with those countries and the attempt to ban travel to and from them, I'm afraid might persist for a long time, and I'm very discouraged by that.
I think that for many years, Africa had the reputation as being the dark continent and the place where wars and disease happen, and therefore investors were not interested in Africa. Over the last decade, we've seen a dramatic change in that. Investors have become much more interested, to the point where Liberia was growing at 11 percent a year.
So what I fear myself is that the aversion behavior on the international scene might persist.
In our modeling [at the World Bank], we did not consider that possibility. We assumed that the aversion behavior would dissipate. And by the last half of 2015, things would have returned to normal.
For that to happen, I really do think that we have to see not only a dramatic reduction in the number of new cases of Ebola — to the point where people are reaching effective, safe treatment — but we also have to see a continuation of transportation and trade with these countries so that the rest of the world becomes used to the fact that it's possible to do business there safely.
DK: Is this outbreak a good argument for more international health aid spending?
MO: One place to start is the following: after the SARS epidemic in 2003, there was an enormous international interest in protecting the world from another pandemic or from an even worse pandemic caused by the spread of zoonotic disease — that is, a disease that originates in the animal kingdom
The donor community started a project called the Global Project on Avian Influenza, GPAI, at the World Bank. The purpose of the fund was to provide additional money over and above what countries were using for their most pressing, urgent needs, that could be used to provide what most poor countries couldn't do on their own, which is disease surveillance.
That fund took off in 2003, but according to the World Bank's evaluation of that fund, the donors walked away from it starting in the year 2008. By 2012, 2013, and 2014, the only bilateral donor left was the US, and even the US's contributions were waning. The attention span of the international community was just too short.
The reason why that project made such good sense is because the chances of a zoonotic outbreak are small in any given country. But a poor country that tries to protect itself from a zoonotic outbreak will be generating benefits not only for itself but for all the rest of the world. In fact, the vast majority of benefits of avoiding an outbreak of Ebola would not have been to Guinea, even though that's where the outbreak occurred. The vast majority of the benefits would have been to Liberia and Sierra Leone and the U.S. and the rest of the world that's now engaged in frantically trying to control this epidemic.
Now, I'm sure we'll see tremendous interest in the donor community in doing whatever is necessary to protect against future episodes of this sort. What I fear is the donor community will lose interest six or seven years from now, and then the capacity will still not be there, and we'll have another outbreak, possibly one that's much worse. And not necessarily of Ebola — it could be of another disease.
A broader answer to your question: I think there's still a very interesting question which will be sorted out in the next couple of years, and that is, do we need to have world-class health systems in every poor country in order to protect the world against future Ebola events?
Or is it possible to build stronger health systems that are not quite as expensive as world-class systems would be and focus particularly on their capacity to do disease surveillance and to manage outbreaks?
There'll be interest groups who will argue for the former, because they strongly believe, perhaps on human rights grounds, that we need to spend as much as is necessary to assure equal health care in Washington, DC, and in Monrovia.
But there will be another set of interest groups that will argue that there are many, many other uses for these precious foreign assistance dollars, such as roadbuilding and working on other diseases like AIDS, and that we need to find a cost-effective way to do disease surveillance and protect against future outbreaks.
DK: Where do you fall in that debate?
MO: As an economist, I tend to favor cost-effective approaches. But on this one, I'm not really sure what it means to have a cost-effective approach. Perhaps it would be better to design a system of early warning on strange diagnoses by having regional experts travel around and search for unusual cases of disease, and perhaps one could also add to that a kind of a regional disaster response team, such as the one that CDC is now using in the US to respond to outbreaks in various parts of the country.
And doing so might go a long way towards protecting against future outbreaks of this sort.
The thing is that if the outbreak gets out of hand, what I just described would not be enough. Because as we see in the case of Ebola, having high-quality treatment and personnel who are trained to protect themselves is actually a large part of the prevention effort.
So it would work as long as you go there early and you're able to stamp out the disease before there are a more than a handful of cases. Beyond that, we're going to need these high-quality treatment centers, which are more expensive.
This interview has been edited for length and clarity.