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The shortage in market-inalienable human organs: a consideration of 'nonmarket' failures
American Journal of Economics and Sociology, The, July, 1998 by Emanuel D. Thorne
The donative system's reliance on exhortation is especially striking in that exhortation is the sole means of procuring market-inalienable goods. Moreover, for some market-inalienable goods, possibly including organs, the number of goods procured will be directly related to the exhortation effort expended. The costly exhortation activities used by procurement agencies to secure supply ought to be viewed, therefore, as a production technique that is an alternative to expropriating or paying donors directly.
Organs are one of a class of goods that differ from conventional goods in that people respond to campaigns that exhort them to donate when markets are banned. The conventional view of what happens when the price of a good like gasoline is fixed below market equilibrium is that competition for the good encourages consumers to undertake wasteful activities, such as queuing, that would be unnecessary in a market. As with gasoline, when the price of human organs is set at zero, activities that some may deem wasteful are observed. However, the "wasteful" activity by demanders of organs includes exhorting suppliers to donate. Whereas exhorting suppliers to donate a good like gasoline is not likely to yield much success, individuals do respond to pleas for donations of human organs. Thus, exhorting suppliers to donate a market-inalienable good like an organ may not merely redistribute supply; it may also enlarge supply, even beyond what a market would generate.
Exhortation will produce a supply that exceeds the market supply when the cost to procurers of supply garnered by exhortation is lower than the cost of market-generated supply. How can this happen? Part of the answer lies in what motivates donors to respond to exhortation campaigns. Donors respond to exhortation for reasons that may include a sense of duty, responsibility, love, undefined psychological reward, utility, and so on. Exhortation by procurers can be thought to supply these donors with information. Because information elicits supply, the number of organs supplied under a market ban should depend on the level of effort expended on exhortation. The other part of the answer depends on the behavior of procurers designed to appeal to these motives. The approach outlined here focuses not on the efficiency of donor motives (i.e., altruism vs. self-interest) but rather on the efficiency of the actions of procurers that appeal to these motives (i.e., exhortation vs. payments).
The nature of the donative system and its reliance on exhortation is complex, but for the purposes of this theoretical essay, it is sufficient to accept that (1) exhortation is an important feature of the donative system, (2) considerable sums of money are spent exhorting people to give, and (3) for some goods and services people respond to exhortation by donating. Whatever the motive for donation, exhortation elicits supply and there is no theoretical basis for asserting that the supply generated by exhortation must be smaller than market supply.
