Trafficking (in all its forms) is high on the agenda in one of Europe’s most important capitals, Berlin. As I can attest from my stay here this week, traffic itself is currently worse than ever. And it was bad to begin with.
First, the French president, François Hollande, flew to the German capital to powwow with Chancellor Angela Merkel regarding the Euro crisis, which led to numerous street closures.
Then, Greek Prime Minister Antonis Samaras arrived to join them (traffic disruptions got worse) and to discuss, one expects, his threat to Germany, France and Europe that a Greek exit from the Eurozone would have chaotic effects on other countries.
One issue mentioned was that Greece would not have the resources anymore to deal with immigration flows should no more bailout help for his country be forthcoming. Greece is a major entry point for the illegal immigration of Africans to Europe, and the specter of Greece letting them freely move on to other European countries ruffled more than a few feathers in Paris and Berlin.
Even so, one of the most discussed trafficking issues in Germany right now is related to a different topic, organ donation and organ transplants.
Earlier this year, a scandal was discovered in which a well-respected leader of a well-known hospital had provided favors to rich patients in need of liver transplants. As a result, organ donations have dramatically decreased in Germany over the last few months, likely resulting in unnecessary deaths of individuals waiting for a life-saving transplant.
The situation is so dire the German federal minister of health, Daniel Bahr, has called for a crisis meeting scheduled for Monday to discuss the ethical issues involved.
He would do well to also promote a debate on the economic issues. A recent paper by three American economists demonstrates that various policies developed in U.S. states to encourage organ donation and bone marrow transplants have had some positive effects on the latter but not the former.
Still, theses results (the title of the paper is: Removing financial barriers to organ and bone marrow donation: The effect of leave and tax legislation in the U.S.) indicate that the design of the reward mechanism matters greatly. The incentives analyzed here include extended (paid) leave from work and/or tax-benefits.
As it turns out, there is another economic — or should one say, human — incentive that has even greater impact.
Two economists from Harvard and the University of Pennsylvania conducted laboratory experiments in which changes in the management of the organ waiting list are simulated (no real donors were involved). Their study has the title “Organ allocation policy and the decision to donate” (an early version is posted here: http://bit.ly/NKAP1i).
Profs. Kessler and Roth conclude “an organ allocation policy giving priority on waiting lists to those who previously registered as donors has a significant positive impact on registration.” This, once more, shows how powerful incentives can be when people maximize their own well-being and how this can be utilized by policy-makers to increase overall efficiency of allocation mechanisms in society.
Thus, whether it is rescuing the Euro, traffic jams or trafficking in organs — the lessons are the same. One should carefully consider the economic incentives involved or risk veering dangerously off course.
Dr. Michael Reksulak teaches economics and public finance in Georgia Southern University’s College of Business Administration. He may be reached by email at mreksula@georgiasouthern.edu.