In a heap of burnt and powdered elephant tusks, you can see so much of social science.

If you visit Nairobi National Park, you will see rhinos, hippos, and giraffes, all within sight of the city skyline. You also will see an organized site showing several large mounds of burnt and powdered elephant tusks. They are a tribute to the elephant, and along with the accompanying signs, a condemnation of elephant poaching.

Starting in 1989, the government had confiscated a large number of tusks from the poachers, and as part of their anti-poaching campaign they burnt those tusks and placed the burnt ashes on display in the form of mounds. There are also several signs telling visitors that it is forbidden to take the ashes from the site.  There have since been subsequent organized tusk burns.

In essence, the government is trying to communicate the notion that the elephant tusks are sacred, and should not be regarded as material for either commerce or poaching or for that matter souvenir collecting. “We will even destroy this, rather than let you trade it.” In economic terminology, you could say the government is trying to shift the supply and demand curves by changing norms in the longer run.

The economist of course is tempted to look beneath the surface of such a policy. If the government destroys a large number of elephant tusks, the price of tusks on the black market might go up. The higher tusk price could in turn motivate yet more poaching and tusk trading, thus countermanding the original intent of the policy.

This scenario, whether the most relevant equilibrium or not, is not just fantasy. Economics Nobel Laureate Michael Kremer (with co-author Charles Morcom) has a well-known paper simply called “Elephants.” In that research, symbolic goods and the sacred are put aside and they take an “incentives only” approach to elephant tusk policy. The abstract runs like this:

Many open-access resources, such as elephants, are used to produce storable goods. Anticipated future scarcity of these resources will increase current prices and poaching. This implies that, for given initial conditions, there may be rational expectations equilibria leading to both extinction and survival. The cheapest way for governments to eliminate extinction equilibria may be to commit to tough antipoaching measures if the population falls below a threshold. For governments without credibility, the cheapest way to eliminate extinction equilibria may be to accumulate a sufficient stockpile of the storable good and threaten to sell it should the population fall.

The key sentence there, for our purposes, is that the government might end up selling its stock of tusks on the open market, to deter speculators.  And thus, in that scenario, you do not want to be burning the tusks.

The Kremer and Morcom policy analysis (is it a recommendation? I am not sure) would of course involve the non-credible government in the market for elephant tusks. Periodically wiping out the speculators would have its benefits, for the economic reasons outlined in their paper. At the same time, a government playing around in that market would have a much harder time making the case that elephants and elephant tusks are something sacred. Such a government would have a much harder time making the case that the tusks never should be traded.

Which is better? The policy conducted by the Kenyan government, or the policy described in Kremer and Morcom?

From this distance, I do not pretend to know. I can also see that an anti-poaching government may not have credibility now, but it may wish to invest in “the sacred” for a pending future where its credibility is greater. Treating elephants and elephant tusks as sacred, even if counterproductive in some short runs, may contribute to establishing the credibility of said government. And indeed part of the credibility of today’s Kenyan government (while decidedly mixed) comes from its ability to keep many of the nature reserves up and running in good order. Many of the animals are coming back, and tourism continues to increase.

Many non-economists think only in terms of the sacred and the symbolic goods in human society. They ignore incentives.  Furthermore, our politics and religious sects encourage such modes of evaluation.

Many economists think only in terms of incentives, and they do not have a good sense of how to integrate symbolic goods into their analysis. They often come up with policy proposals that either offend people or simply fall flat.

Wisdom in balancing these two perspectives is often at the heart of good social science, and not just for elephant tusks. And who exactly is an expert in that?

The post Elephant tusks, incentives, and the sacred appeared first on Marginal REVOLUTION.


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