May 7, 2018

Economists, please note: The Bloomberg Summers Task Force on Fiscal Policy for Health is Important

Published by: Evan Blecher, PhD


Recently, former New York mayor and CEO of Bloomberg L.P., Michael Bloomberg, and Larry Summers, former US Treasury Secretary and Chief Economist of the World Bank and currently professor of economics at Harvard University, announced the launch of a new Task Force on Fiscal Policy for Health to promote the use of fiscal policy as a tool to reduce the global burden of non-communicable diseases. Taskforce members announced so far include many leaders from the global economic policy-making world, including several former and current Ministers of Finance, central bank governors, global development experts, and a number of high-profile economists. The taskforce is going to consider how to better use taxes on tobacco, alcohol and sugary drinks to reduce the economic and health burden of non-communicable diseases. But, how is this taskforce different to other similar initiatives and why is this one important?

This new task force, led and staffed by key thought leaders in economics, is a unique opportunity to discuss taxes on tobacco, alcohol and sugary drinks in the economics profession, and will go a long way to engage economic, tax and fiscal policy makers.

Some personal context: I’m an economist who has worked my entire career on tobacco taxes. However, much of this work has occurred within the public health world. Among this community, the importance of tobacco taxation is a given and well understood. However, tobacco tax policy is not determined in the public health policy space, but rather in the economic, tax and fiscal policy space. Most economists, whether working in academia, government, international organizations or civil society, do not consider tobacco tax an important issue.

Yet, the reality is quite different. Nearly all countries levy an excise tax on cigarettes, and $328 billion is collected annually in tobacco excise taxes. However, tobacco taxation is not a mainstream issue in economics. Scrap that, for the most part, it’s a fringe issue. Yet, smoking is the number one modifiable risk factor globally, and given the immense power of tobacco taxation as a policy tool, it should be a major topic of interest for economists. As should alcohol and sugary drink taxes.

While other similar endeavors like the WHO Commission on Ending Childhood Obesity and the WHO Independent High Level Commission on Non-communicable Diseases have or are likely to touch on similar issues, these platforms are not led and staffed by economists and economic thought leaders. Furthermore, they have distinct missions that are not focused on improving tax policy, but rather on “specifying which approaches and combinations of interventions are likely to be most effective in tackling childhood and adolescent obesity in different contexts around the world” and “establishing an independent platform to mobilize stakeholders to identify innovative recommendations for accelerating the response on NCDs”. The narrow focus on this new task force complements the WHO initiatives, is designed to influence thinking in the economics profession, and is likely to be disseminated and discussed by economists. Furthermore, that this task force runs concurrently with the WHO Independent High Level Commission on Non-communicable Diseases is opportunistic and both are likely to influence each other.

A case in point, one can look at the response to the announcement on social media where more economists engaged on the discussion begun by a few tweets from Larry Summers and other task force members than I’d seen before. They were discussing important considerations such as tax structures, the distributional consequences of taxes, the nature and size of externalities, and the use of revenues. While these topics are not new to me or people who engage on these issues regularly, it was apparent that these topics were being discussed by a wide range of economists who had never thought about these in the context of taxes on tobacco, alcohol and unhealthy foods. Potentially, the announcement itself has probably done a lot to raise the profile of this work amongst economists. That in itself is already a win!