Stephanie Farley

There are about two civil wars a year, said Vernon Smith, who spoke last night to an auditorium full of people at the Kansas Union. Smith, who co-won the Nobel Memorial Prize in Economic Sciences in October 2002, spoke about—among other things—why civil wars occur. Countries that have a greater amount of resources, income and growth rate have a higher chance of civil war.

Vernon Smith, Nobel Memorial Prize winner in Economic Sciences, returned to his alma mater, the University of Kansas, last night and identified the world's biggest problems.

In his lecture, entitled, "World Issues and the Role of the Economist," Smith discussed his answer to the question posed to him at a recent conference, "How would you spend $50 billion on the world's most pressing issues?"

The issue was to find what could be done to deliver solutions, he said.

At the Copenhagen Consensus, eight economists gathered to discuss and evaluate the world's biggest challenges. The conference took place in May 2004.

The group spent five days discussing 10 scientific papers that contained 36 possible solutions to challenges written for the consensus. The panel reviewed the challenges and produced a prioritized list of opportunities to solve the world's top 10 challenges in the next four years.

The first four challenges on the list, AIDS/HIV, providing micronutrients, free trade and malaria, were considered to be "very good projects," meaning they were issues with feasible solutions.

"It was important to emphasize the thing you maybe have some practical effect on," he said. "The average person doesn't understand that a lot of problems can't be solved with money."

focused on the differences between on how the group ranked the challenges and how he ranked the challenges, specifically, the No. 1 challenge.

"I ranked malaria higher than HIV/AIDS with no consideration that solving one is more important, but I actually think we can do something about malaria," he said. "HIV/AIDS is so daunting, and I saw the same amount of money spent on malaria saving more lives."

He also said he did not think the group gave a high enough rating for free migration. He said he thought free migration was just as important as free trade.

People were concerned that the panel didn't rate climate change high enough, he said.

"But it is a much more longer-run problem compared with these pressing problems that need immediate attention," he said.

One potential problem with delivering aid to foreign countries was getting past corrupt governments, he said.

"There's a role, and I don't know for who, for some sort of contracting, in which one uses leverage to require governments to submit to monitoring and measurement of what is delivered," he said.

There will be a follow-up to the consensus in 2008, which will have an evaluation of the past four years, but there are no formal steps that will be taken to follow through with the decisions made at the 2004 consensus.

Smith said the group may include both old and new participants in the consensus.

Smith received the Nobel Memorial Prize in Economic Sciences in October 2002. He received the award "for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms," according to www.nobelprize.org.

He said he was first invited to nominate someone for the award in 1978, which gave him his first hint that he had also been nominated.

To be able to nominate someone, the person must be a previous winner, a department head or a previous nominee, Smith said.

"I was not a previous winner or a department head, which meant that someone had nominated me," he said. "That's the first hint I had of interest in me."

Twenty-four years later, Smith won the award.

This was the first lecture sponsored by the Center for Applied Economics at the School of Business and was funded by the Fred C. and Mary Koch Foundation.