How to set priorities?

We can’t do everything. So how do we choose what to do, and what not to do?

Bjorn Lomborg applied this question to the setting of global priorities.

He identified a list of the top problems the world faces, and then got a ‘Dream Team’ of leading economists to rank them. “If we had $50bn to spend, what would be best to spend it on?”

The answers they came up with may surprise you.

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There are three reasons for posting this talk.

The first is to ask ourselves whether we agree with him, and if not why not?

The second is to ask whether there are other ways of prioritising these kinds of projects — not just financial return. Would it make sense to look at the size of the potential downside of not carrying out a project, as well as the potential upside of carrying it out? Do we need to include the probabilities of downside/upside as well as the size? And are there other outcomes that human beings might value, as well as purely dollars?

Third, it is interesting to notice that part of his reason for not prioritising climate change (paraphrased) is that “by 2100 the poor Bangladeshi farmers will be a lot richer and so won’t mind so much about their land being flooded.”

Post 2008 that now looks a lot less likely that it once did. But the point is not whether he was right or wrong. The point is that his decision-making contained some significant unstated assumptions.

In a world that is changing rapidly, where old assumptions are breaking down and Greek government debt and sub-prime mortgages are not the low-risk investments we once thought they were, it is important to a) be aware of the assumptions that are included in your decision-making, and b) test whether those assumptions are valid.

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