Curbing the Epidemic

Why did the World Bank produce a report on tobacco?

What are the topics covered in this report?

For whom is this report intended?

How was the report produced?

Who are the authors of this report and its background papers?

What are the sources of data used in the report?

What is the World Bank’s Policy on Tobacco?

 

While the effects of tobacco on health are less and less disputed, attention has turned increasingly to the economic arguments for and against tobacco control. However, the debate usually occurs in the absence of empiric and systematic analyses of the economics of tobacco control. The World Bank, with its comparative advantage in economic and inter-sectoral analyses, can help fill that gap: hence this report. It is the first comprehensive examination of the fiscal, trade, regulatory, agricultural and industrial aspects of global tobacco use and control. While it is not intended as an operational guide to tobacco control, the report aims to inform the global debate by covering important issues that most societies and policymakers face when they think about tobacco or its control.

This report outlines effective policy interventions to reduce smoking in developing countries. It discusses tobacco use and its consequences both on health and on the economy, and highlights the relationship between smoking and poverty. It examines how tobacco differs from other consumer goods and spells out a rationale for government involvement in tobacco control. It provides an evidence-based review of policies to reduce demand for cigarettes, including taxation, the provision of information about the health consequences of smoking, comprehensive bans on advertising and promotion, and regulatory changes. The report concludes that raising tobacco taxes and introducing a package of other demand-reducing measures could substantially cut the number of smoking-related deaths worldwide.

Next, the report critically reviews the impact of measures to reduce the supply of tobacco, for example through crop substitution, or through trade restrictions, and concludes that these are unlikely to be effective. However, it concludes that one supply-side intervention-tough controls on cigarette smuggling-would reap rewards.

Critically, for policymakers, the report discusses the impact of tobacco control programs on economies: on jobs, tax revenue and on individual consumers. It concludes that many of the concerns that have deterred policymakers from acting to control tobacco in the past are unfounded or exaggerated. It provides new evidence on the cost-effectiveness of control interventions, concluding that raising taxes is a particularly effective way to achieve health returns on modest investment. Finally, it outlines broad recommendations for national and international action, including future research directions.

The report’s audience will be officials in Ministries of Finance, Commerce, Trade and Health in low- and middle-income countries and in development agencies, as well as academic economists, epidemiologists, those working in tobacco control programs, and health planners.

This report was conducted in close partnership with WHO. Seventeen analytic papers commissioned by the WB constitute the background for this report and most will be published next year in a separate volume, Tobacco Control in Developing Countries- (Oxford University Press). Earlier outlines for the report were critically reviewed by policymakers from developing countries at workshops sponsored by the World Bank and WHO. These workshops were held in June 1996 in Washington, DC; in August 1997 in Beijing, China; and in February 1998 in Cape Town, South Africa. The background papers for the report have undergone two rounds of external, anonymous peer review and one Technical Review Workshop. The second review workshop will be in June 1999. The report itself has been reviewed extensively within the World Bank on three occasions, and by an external panel convened by the US Centers for Disease Control and Prevention.

This report and it background papers were produced by an international team of economists, public health specialists, social scientists, public policy and legal experts from the World Bank and academic institutions in many different countries.

The report and its background papers draw on several data sources including: (i) recently published estimates of global deaths and disability from the Global Burden of Disease Project; (ii) recent indirect estimates of tobacco-attributable mortality from industrialized countries; (iii) the WHO mortality database; (iv) World Bank data on tobacco production, trade, prices, and taxes, including an ongoing survey in selected countries; (v) various pricing data from the tobacco industry; (vi) Bank literature, country reports, and databases; and (vii) summaries of the literature, such as those by the Cochrane Collaboration and the WHO’s Tobacco Free Initiative.

Since 1991 the World Bank has had a formal policy of not lending for tobacco production and encouraging tobacco control. The policy contains five main points. First, the Bank’s activities in the health sector discourage the use of tobacco products. Second, the Bank does not lend directly for, invest in, or guarantee investment or loans for, tobacco production, processing or marketing. Third, the Bank does not lend indirectly to tobacco production activities, to the extent that this is practicable. Fourth, tobacco and its related processing machinery and equipment cannot be included among imports financed under loans. Fifth, tobacco and tobacco-related imports may be exempt from borrowers’ agreements with the Bank to liberalize trade and reduce tariffs.