Loading summary

Transcript45 lines

[00:00]
Dr. Susan Erickson
Mint is still $15 a month for premium wireless. And if you haven't made the switch yet, here are 15 reasons why you should 1.
[00:08]
Dr. Miranda Melcher
It's $15 a month.
[00:09]
Dr. Susan Erickson
2. Seriously, it's $15 a month. 3. No big contracts. 4. I use it.
[00:15]
Dr. Miranda Melcher
5.
[00:16]
Dr. Susan Erickson
My mom uses it. Are you. Are you playing me off? That's what's happening, right? Okay, give it a try@mintmobile.com Switch upfront.
[00:23]
Dr. Miranda Melcher
Payment of $45 per three month plan $15 per month equivalent required. New customer offer first three months only, then full price plan options available, taxes and fees extra. See mintmobile.com.
[00:32]
Dr. Susan Erickson
Up a sweat Working on.
[00:35]
Dr. Miranda Melcher
Your passion and endless action? Ditch the glitch with Liquid IV's new energy multiplier, Sugar free refreshing flavors like strawberry, kiwi and BlackBerry lemonade. Scientifically formulated to support physical energy, hydration.
[00:52]
Dr. Susan Erickson
Focus, mood and social stamina. Liquid IV's new energy multiplier Sugar free hydrating energy. Tap the banner to learn more. Ford BlueCruise Hands Free highway driving takes the work out of being behind the wheel, allowing you to relax and reconnect while also staying in control. Enjoy the drive in BlueCruise enabled vehicles like the F150 Explorer and Mustang Mach E. Available feature on equipped vehicles. Terms apply. Does not replace safe driving. See Ford.com BlueCruise for more details.
[01:31]
Commercial Announcer
Welcome to the New Books Network.
[01:36]
Dr. Miranda Melcher
Hello, and welcome to another episode on the New Books Network. I'm one of your hosts, Dr. Miranda Melcher, and I'm very pleased today to be speaking with Dr. Susan Erickson about their book titled Investable When Pandemic Risk Meets Speculative Finance, published by MIT Press in 2025. This book takes us behind the scenes, behind a whole bunch of different scenes, actually, to understand a type of international financial instrument that might sound really boring and dry. Maybe that's on purpose. We'll talk about it. But the point here is that this thing that might seem just technical actually has a whole bunch of impacts. We're going to talk about real life impact to actual humans on the ground. We're going to talk about impact in terms of how we think about data, how we think about money, how we think about aid. And all of this is buried in all sorts of, I imagine, incredibly long PDFs and behind many layers of security and boardrooms. And so, Susan, I'm so pleased to welcome you onto the podcast to tell us about what you've excavated from behind these barriers and brought to us today.
[02:40]
Dr. Susan Erickson
Randall, it's wonderful to be here. Thank you.
[02:42]
Dr. Miranda Melcher
Can you please start us off before we get behind into all of those rooms. Em, can you introduce yourself a little bit and tell us why you decided to write this book?
[02:52]
Dr. Susan Erickson
Sure. So I'm an anthropologist by training and an expert in the political economy of health. And I've worked in both very wealthy and very poor communities. I've spent most of my research life in Germany and Sierra Leone working to figure out how data and money and technology move, if you can say that in communities as artifacts of governance. And so how does this mix increase and decrease people's likelihood of being hale and hearty, healthy and well over the course of their lifetimes? And so for the last 15 years, I've developed a special interest in greed as an organizing principle. I just am very curious about why and how it became so culturally common to assume that humans need to be financially incentivized to help each other as opposed to organizing ourselves politically in ways that would intentionally and by design curb greed. Know when enough is enough. Like when did a billion dollars not become enough for individual. And as an anthropologist of health, I study how humans organize themselves to keep or fail to keep each other well. I analyze what people and communities and nations do and don't do about the cold, hard fact that human beings get sick over their life course. And rather than focusing on the viral, bacterial or genetic origins of sickness, my attention is really on the money and the politics because, well, for one thing, impoverishment and bad government can truly make you sick. There's certainly enough money in the global system for everyone to have at least decent primary healthcare when they need it. But it's the politics and the money systems that get in the way of that. As for why I wrote the book, fundamentally, when I first learned about catastrophe bonds, the idea of them made me kind of sick. And I was at a lunchtime talk in a university and a speaker started bragging about this new idea he had introduced at the World bank to address funding for weather catastrophes like hurricanes. He was arguing that we should make them investable, by which he meant that the risk of them should be sold to private investors through special insurance devices. He wanted to get catastrophe management out of government hands and into private ones. And the way to incentivize private investors was to give them a chance to earn a hefty rate of return, hefty rate of interest in exchange. So he's basically saying, I'm going to appeal to your investor greed. That's how we'll fix the problems of humanitarian aid. And all the while I was sitting there imagining the selling off of units of human suffering to rich people who would buy them for a chance to make money. And then fast forward 10 years. I'm a mid career medical anthropologist with expertise in the global political economy of health. By this time and around 2014, during the West African, African outbreak of Ebola, I started hearing about Ebola bonds. And I remembered this lunchtime talk. There was a British venture capitalist who went on MSNBC to talk about Ebola bonds and there was mention of them on Bloomberg News. And then I got a copy of a not yet public document out of the World Bank. And by this time Jim Young Kim, a fellow anthropologist, was the World bank president. And I learned that he was pursuing this new form of financialized aid that sounded a lot like what I had heard about Ebola bonds. These Ebola bonds, which became the pandemic bonds, are an exemplary of decades long turns towards financialization of global health. And with a bit of the greed kind of spicing, spicing the progress, if you can call it that, as a way to provide financial help.
[06:47]
Dr. Miranda Melcher
You've just mentioned there a whole bunch of things that I'm hoping and expecting we're going to talk about in more detail. So that's a really useful foundation for our conversation and I think also a useful explanation of how books come to be. It's never sort of one moment, it's the kind of this and then this and then this and they all sort of pile up together. But before we go further, I want to make sure we understand exactly what it is that you're talking about. So you've mentioned catastrophe bonds and Ebola. We're talking here about pandemic bonds, essentially. So what actually are they and how do they fit into our otherwise existing notions about how money for health emergencies works?
[07:28]
Dr. Susan Erickson
So let me just back up a bit and talk about when the World bank introduced the pandemic bonds, it really was responding to a very real problem, and that is that countries, both rich and poor ones, do not plan and prepare very well for pandemics. COVID 19 of course cost the world tens of trillions of dollars. Poor countries have the challenge of not having enough fungible cash or credit to spend in a pandemic emergency. And the bonds were one attempt to remedy that shortfall. But you've asked the most challenging question to deliver in a sound bite, which is what are the pandemic bonds? And quite frankly, they're pretty complicated. Obviously I've written a whole book about them. See chapter two for all the geeky details. But in short, from an investor's perspective. They were two tranches of three year bonds. One tranche offered 11.5% interest per year and another offered the more risky tranche offered 14% interest per year. And they were set up to either make money for investors or release that same money if a pandemic hit. And there were all of these data criteria that had to be met before the money was released for a pandemic. So when Covid hit, they did provide $132 million of investor money for pandemic response. And that money was spread out over 64 countries, each country receiving an average of $3 million each. Which of course, as we know, is not a lot during an emergency. Yes, very small. And here's another way to describe them. So the pandemic bonds were a financial instrument designed by a committee to provide funds to poor countries in the event that a pandemic in the vague hope that poor people would receive the care that they need. But of course, the bonds were not about a healthcare intervention or implementation. They were only about the money for it. And they were only ever about the money, even though they weren't always sold that way. They were never about the staff stuff, space and systems, those four S's that Paul Farmer talks about that are necessary for emergency care and pandemic. I do want to just quickly add that one of the most disturbing findings in my research was that when I opened the black box of the modeling that was used to assess and price the risk for the bonds, I found that they were modeling for investor loss, not for public health success. And it was the modeling for the bonds that was to determine the chance for whether or not the investors would lose their money or the money would go to pandemic response. But yeah, that's, that's really at the heart of the book, telling that story about how to incentivize investors so that they would put up the money, but also creating very, very high thresholds, very stringent criteria before the money was actually released.
[10:31]
Dr. Miranda Melcher
Yeah, that's actually, I think, where I'd like to go next, which is sort of, it's one thing to come up with an idea for a financial instrument like this, but as you've just described, there are bunch of ways that it could have just sort of stayed an idea phase and not made it into a functional financial product. So how did that happen? How did it go from being just an idea of tying all these things together to being actually a thing that people really put money into?
[10:58]
Dr. Susan Erickson
Well, I have a chapter called Personality Matters and It very much mattered that the president of the World bank at the time, Jim Young Kim, who's a anthropologist and physician, had been made by Barack Obama the president of the World Bank. And, you know, he was used to personal and career successes in his life. I tell his story and, you know, he was rightfully distressed about the world's neglect of Ebola in West Africa on his clock. And he made the pandemic bonds one of the signature accomplishments of his presidency. The bonds took about two years to develop, and they were issued in 2017 with a maturity date of 2020. And he was president until February of 2019. And Covid triggered the bonds in May of 2020. But back to Jim Kim. I just have to say, being president of the World bank, of course, is obviously a position of great power. And when I asked people if the bonds would have existed with him, if that translation as you. The idea to the instrument would have happened without him, most people said emphatically, no, no way. And I also have to admit, though, I was truly loathe to write about him as a fellow anthropologist, but he was so central to the pandemic bond story that I conclude my chapter on him. Well, I was not shy about concluding that he squandered what I saw as a rare opportunity to promote primary care systems around the world, which would be an excellent and efficacious first line of defense against future infectious disease. Instead, he very literally made pandemics infestible.
[12:49]
Dr. Miranda Melcher
So were these designed to be for public health at all, or were they meant to be for public health and all these other things, or where did public health play into how these were constructed?
[13:02]
Dr. Susan Erickson
They were looking for new ways to fund. The World bank was definitely looking for new ways to fund pandemics. And yes, the target was delivering money for pandemic care. And when you ask the World bank, did they succeed at this, they say, yes, we've raised $132 million of previously untapped money that could go to the service of pandemic care. But when you actually unwind the bonds, as I did in my research, and look at the data and modeling, what gets revealed, you know, those are typically topics that are dull as dirt for most people, but when you unwind, for an anthropologist, they're just artifacts, right? And so when you unwind, what is revealed by the choices that got made in terms of the data that they used as well as the modeling that was deployed, what you find is that the models were primarily geared towards assessing investor loss rather than public health success. And so you know, there's. There's kind of. There's many stories within my stories in. In terms of. In terms of the book. But that, to me is. Is one of the most important, I think, takeaways relative to what the anthropological research could reveal, that when you unpack these models, they tell a story because humans had to make choices along the lines of their priorities.
[14:33]
Dr. Miranda Melcher
Yeah, I think that's a story we want to go into a bit more detail about. So what are some of these decisions and triggers and things that are built into the models and the calculations that they're making?
[14:44]
Dr. Susan Erickson
So the bonds were meant to release money for care after threshold criteria were met. And these criteria themselves were quite controversial among the people who knew what was being designed, how the. How the bonds were being designed. And this includes people in the World Bank. I actually ended up talking to many people, some retired, some who were sure not to meet me on World bank grounds, you know, in coffee shops in Washington, D.C. or even in. In Sierra Leone, in Freetown. I met with people from the World bank. And there were people, some of whom were actually in the position of being required to promote them, who were very critical about these particular criteria. So, for example, one of the criteria was that there 12 weeks needed to pass before the money could be released. Well, 12 weeks is three months. And in the case of infectious disease, that's a very long time. And, you know, the beginning of those 12 weeks, you might have an opportunity to actually work on contagion, public health contagion strategies. But three months, that's a. As we know, certainly with COVID Right. We got announced on 31 December in 2019, and then declared a public health emergency in March. The money wasn't released by the World bank for these bonds until May. And so when you also think about what it actually takes to get money up and running and becoming effective, May was way late. So 12 weeks was a really long time. Two or more countries needed to be effective. So when Ebola broke out within the Congo, for example, the money couldn't be released even though the death counts, which was another of. Well, it was the most controversial criteria that a certain number of people needed to die before the bottom bonds could get triggered. In the Congo, a lot of people died certainly past the threshold, but it hadn't crossed borders yet. And so that not crossing of borders meant that the money couldn't be released, even though there was serious death and infection within Congo. One of the countries that was affected that was just experienced a pandemic had to be a World bank designated poor country. And then the spread of infection had to reach a certain statistically determined growth rate. And this was one of the aspects that took a very long time to assess. Because if you actually think about what data is available during a pandemic and if you imagine an under resourced hospital or clinic in a poor country and you imagine people struggling actually to keep people alive and themselves in Sierra Leone, for example, the country that I am most familiar with because I've long done research there, know a third of the healthcare workers died of Ebola themselves. And so when you imagine the data collection in an environment like that that was supposed to be in the moment in order to trigger the money for this bond, you can start to imagine how impractical the data criteria actually were. Unreasonable. I would even, I would even say so yeah, this, that was how they were supposed to work by design. I can also add that the World bank got a lot of grief for setting death as one of the primary criteria for whether or not the bonds would get released.
[18:14]
Commercial Announcer
I'm Christian McCaffrey, pro running back and Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the Internet last year and I think this season's lineup is even cooler. You and so does my wife who keeps stealing all my hoodies Stay fit for the season and Abercrombie's newest arrivals shop NFL by Abercrombie in the app, online and in store.
[18:44]
Dr. Susan Erickson
This episode is brought to you by State Farm. Checking off the boxes on your to do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone or using the award winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there.
[19:10]
Commercial Announcer
Lowe's knows how to help make your home holiday ready for less. Get Select Style Selections vinyl flooring for just $1.99 per square foot and have it installed before the festivities begin. Our team can help you every step of the way. See a Lowe's Red Best Associate or visit Lowes.com HolidayInstall to get started. Lowe's we help you save basic Install only. Date restrictions apply. Subject to availability. Install by independent contractors. See Associate for details. Contiguous us Only.
[19:39]
Dr. Miranda Melcher
Yeah, I'd like to hear more about that because as you're listing out these criteria, there are some pretty obvious ones that would Raise eyebrows, obviously death count being one of them. So how much were these criteria sort of publicly known versus hidden away in black boxes when this whole thing was created?
[19:56]
Dr. Susan Erickson
Well, they had to be publicly known in order for the World bank to convince the investors that they had stringent enough criteria that the investors wouldn't lose their money at the first death. And so, you know, in investment worlds, that kind of information, you know, there was, there was a 386 page, what they call prospectus at the World bank that detailed all of the different rules and regs, terms and conditions of the pandemic bonds. And so it was very well laid out in terms of what the criteria would be. And when journalists, and certainly science journalists got a hold of what some of the criteria were, many were appropriately disgusted and wrote about it. And you know, I have to, this is just an aside, but I was truly intrigued by how carefully the folks at the World bank were tracking the criticisms of the pandemic bonds. The pandemic bonds were so public and started taking such a kind of enigmatic aspect of what the World bank was doing. And you know, the prospectus started making its circulation around in, in certain circles, including anthropological ones, to my benefit. But how well known were they? Well, in order to get investors to invest, you have to lay these kinds of terms out. So they were certainly known in the financial world. They were also a reason why some investors did not invest. And I talked to those folks too and they simply said, yeah, the data, the data collection doesn't make any sense. The criteria doesn't make any sense, or at least not enough sense for us to risk millions of dollars in these bonds.
[21:44]
Dr. Miranda Melcher
Before we get to the investors that did choose to use these instruments. I wonder if we can talk a little bit more about what you mentioned in terms of your research on the ground in Sierra Leone. Because it's one thing to look at, for example, a massive PDF like that prospectus and go, hang on, that doesn't quite make a lot of sense. Which clearly sounds like it had questions enough that that alone would raise some eyebrows. But you, as you mentioned, have been on the ground in some of these situations where these kinds of bonds would have, or in fact used. So is there anything further you want to tell us about your anthropological work in that context and how it made you evaluate what was being attempted with this pandemic bond?
[22:25]
Dr. Susan Erickson
Yeah, well, there's a lot of stories here. So, you know, as a 20 year old, after university I went to Sierra Leone as a volunteer and worked in clinics and in Schools. And I had a motorcycle while I was there and very much enjoyed riding around on the, on the roads of Sierra Leone, which is first of all a very beautiful country. But there's two seasons. There's the rainy season, the dry season, and the dry season, best motorcycle riding ever. The rainy season. It's like riding in concrete. And so I start my data chapter, which I have to say is my favorite chapter, with a story of a face plant on a particular muddy road. And just the minute the World bank made data in poor countries the criteria for triggering millions of dollars, then I felt it very personally what it is to have to travel these roads and collect data. And there are folks called enumerators, that's both men and women, usually about 20 to 30 years old, riding motorcycles in both the rainy season and the dry season, collecting data from small vil villages. They get sent out by NGOs or the government of Sierra Leone to collect data. And you know, they, they. It is an exceptionally fraught aspect of data health collection. But I have to say I live in Canada and if you travel to the north, it is also difficult, you know, in any, in many rich countries to collect data in rural areas. But the case that I, I use Sierra Leone as, as a, something of a case study because I'm so familiar with it. And, you know, I lived in Sierra Leone for two years in my 20s and then have gone back repeatedly now as an anthropologist. And yeah, the data collection is just an exceptionally fraught process. And if you think about adding the overlay of a pandemic and the stresses and strains on a healthcare system, any pandemic anywhere, of collecting data that can then be used for a Wall street bond, you can see the complications.
[24:45]
Dr. Miranda Melcher
Well, you can see the complications. And those of us who are listening to this and have read the book can see the complications. But clearly some investors didn't see the complications or saw them and were okay with it. So let's talk about the actual issuing of these things. Who invested in these bonds? When were they done? Like, what was the plan? Once we go from idea to real option on the table, who said yes?
[25:11]
Dr. Susan Erickson
So it was primarily there were a lot of pension funds. The bonds had to be, had to be invested in by what's called institutional investors as opposed to retail investors. Like, if you and I were going to invest in something, we would be as individuals, we would be considered retail investors, mom and pop investors. But they were really going after the, you know, the World bank wanted kind of the whales of Wall street in terms of their investor class. And so that included pension funds. There's folks who only trade catastrophe bonds, which is the type of bond that the pandemic bonds are, and asset fund managers, hedge funds, private Equity. There were 26 original investors. But quite frankly, the day after the, the bond went live, it could have been a completely different set of folks because there was buying and selling of the bonds after the fact. And so we do know the identities of some of, of, of these folks, but just as a, as general categories, it's the folks that I, that I just mentioned.
[26:14]
Dr. Miranda Melcher
Interesting. That definitely tells you kind of what the goals were in terms of the creation of these bonds, even more than everything you've been telling us already. And you mentioned earlier that some of these bonds did actually get paid out. So what happened there? Who, who got money when, for what?
[26:30]
Dr. Susan Erickson
So there were two different bonds, a class A and class B. And they were class A was considered less risky. There was less of a likelihood that the investors would lose their money. And in class A, when you tally up their gains, because they were getting interest every six months, when you tally up their gains and compare that to their losses, they ended up making class a investors about 3% a year. So not a, not a, not a spectacular return, not the 11.5% interest annually that they were expecting. Now the class B bond investors, they were expecting a 14% interest gain and in fact they lost all of the money. They were considered the higher risk bonds, so that's why they had the higher level of interest. But they did lose all of their money.
[27:30]
Dr. Miranda Melcher
And so is this going to continue? Are we going to have another round of pandemic bonds or was this a one off experiment never to be repeated?
[27:39]
Dr. Susan Erickson
Well, they did. The World bank did actually identify and say that they were starting to recruit data analytics firms for a pandemic bond 2.0, which they then canceled when the realities of COVID hit and more and more was publicly revealed about the bonds. They really don't like bad publicity, of course. Whether the World bank will try it again I think remains to be seen. But the insurance linked securities portion of Wall street is the place to keep an eye on. Because for example, In February of 2025, just this past February, I was in New York City for Insurance Links securities conference and met with people that I had met with in their research for my book and asked them the same question, how likely is it? And some of them were quite frank and simply said we're waiting for people's memories to fade. Because in fact there is a need for certain kinds of risks to be covered with this kind of model, we may tweak the criteria, the triggers. We would, you know, they might not use death, they might actually make the bonds available for pandemic preparedness if certain benchmarks are met. So there is some kind of tweaking that can happen to make these bonds more appealing to lots of different communities and groups. But you know, one of the biggest problems is going to be if they still, if the World bank does try this again and uses their model. Well, it's that the design requires that rich countries put up the money for investor interest. And when the bank first started designing the bond, they had like 20 people who they. 20 countries, sorry, that they were in conversation with about putting up the money to give to investors so that they might be induced to raise this money. It turned out that of the 20, only Germany and Japan ended up donating money to pay investors. And of course this was a problem actually in Germany where health advocates were rightly arguing that the money could have easily been donated directly to the countries rather than following the complicated and circuitous route of the pandemic bonds design. And so whether or not they'll be able to get a hefty portion, many hundreds of millions of dollars in reserve to pay out to investors whether or not rich countries will do that. Germany's a hard no. Japan didn't like the bad publicity. So whether or not there will be another round coming out of the World bank remains to be seen. But I think the model, when you talk to the insurance linked securities folks, they tend to say that the World bank proves something, that the mechanics, the World bank made the mechanics work and that that was instructional and interesting and replicable. And so one of my main concerns as somebody who follows global health is that we've been basically since the 1880s kind of in transition. In the 1880s there was an increased interest then over the next couple decades in universal healthcare providing care. The government provided care and designed different of course, kinds of. The UK has a certain kind of system, Germany has a certain kind of system, Canada has a certain kind of system in terms of a universal availability of healthcare. And you know, there's problems everywhere. But on the other hand you've also got the model of the US which is very ad hoc. They have a definitely a mixed social, socialist and for profit kind of model. But it leaves a lot of people, of course a lot of people fall through the cracks in the U.S. system. So you know that that move from universal healthcare to more welfare minded of the 1930s kind of healthcare to then a privatization in the 70s and 80s as an active part of healthcare design to now what we've got is kind of an outgrowth of the privatization. In terms of financialization, that trajectory is on a pretty heady course and it's built a lot of steam. And so whether or not there will be a turning back from that, as there was a bit in the pandemic, there was. Governments kind of took over in terms of we're going to provide free vaccines, we're going to provide masks and tests and you know, but that's been walked back. And so what does it look like in the future? I mean, I am currently seeing just more and more moves towards financialization in the way that the pandemic bonds were trying to model. So it probably won't look exactly like those bonds. But you know, capitalism is insidiously creative in terms of how it comes up for new with new ways to make money. And this making money on money as opposed to from wage labor or product production, you know, this is a new kind of turn in global economy.
[32:58]
Dr. Miranda Melcher
Well, you've certainly helped us figure out what to pay attention to going forward, so that's definitely helpful. And in that vein, what might you be working on as we move into the future with this book out in the world off your desk? Any newer upcoming projects that you want to flag or highlight?
[33:15]
Dr. Susan Erickson
Yeah, I have new money to look at how people, okay, this probably won't surprise me how people are going to make money on planetary health concerns, especially, you know, looking at the modeling and the data for wildfire. So that's one project I have money for. And then I'm also interested because I've long been interested in different aspects of technology and big data. I'm looking at how AI will be deployed to assess wildfire risk because there's just all kinds of new possibilities. Right. I mean, as a nerd, you know, it's a very exciting time to try to figure out what these modalities look like and unpack them so that people understand them and then figure out whether they themselves want to actually critique them and make policy changes. I mean, for me, one of the most interesting aspects of studying the pandemic bonds was the resistance that public health folks had to thinking about this. I cannot tell you the number of people that came up to me after I would give talks and would just say, this is such a depressing topic. I really don't want to know about this. But. But you know, this is the way of the world and so there needs to be anthropologists, I think, like me, who are interested in saying, okay, first we need to understand these things, and then we need to figure out, perhaps hopefully, how to do policy differently.
[34:42]
Dr. Miranda Melcher
Well, anyone who wants to find out more about pandemic bonds and what's actually happening with them can of course read the book we've been discussing titled Investable When Pandemic Risk Meets Speculative Finance, published by MIT Project Press in 2025. Susan, thank you so much for joining me on the podcast.
[34:59]
Dr. Susan Erickson
Oh, Rand, it's such a pleasure. Thank you so much.
[35:15]
Commercial Announcer
And Doug, here we have the Limu.
[35:18]
Dr. Susan Erickson
Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.
[35:31]
Dr. Miranda Melcher
Uh, limu is that guy with the binoculars watching us?
[35:34]
Commercial Announcer
Cut the camera.
[35:35]
Dr. Miranda Melcher
They see us.
[35:35]
Dr. Susan Erickson
Only pay for what you need@libertymutual.com Liberty Liberty Liberty. Liberty Savings Ferry unwritten by Liberty Mutual Insurance Company and affiliates. Excludes Massachusetts.

Summary7 min read

Podcast Summary

Podcast: New Books Network
Episode: Susan Erikson, "Investable! When Pandemic Risk Meets Speculative Finance" (MIT Press, 2025)
Host: Dr. Miranda Melcher
Guest: Dr. Susan Erikson
Date: September 20, 2025

Episode Overview

This episode dives into Dr. Susan Erikson’s new book, Investable! When Pandemic Risk Meets Speculative Finance (MIT Press, 2025). Dr. Erikson and host Dr. Miranda Melcher unpack the rise of pandemic bonds—complicated financial instruments introduced to manage risk during health emergencies. The conversation reveals how these bonds, while seemingly technical, have profound real-world impacts on healthcare, public policy, and vulnerable populations. The episode critically examines the intersection between aid, global health, financial incentives, and the politics behind distributing care during pandemics.

Key Discussion Points & Insights

1. Author Background and Motivation for the Book

[02:51]

Dr. Erikson is an anthropologist specializing in the political economy of health, with experience in Germany and Sierra Leone.
Her research explores how money, data, and technology function as artifacts of governance and shape health outcomes.
She became interested in the concept of "greed as an organizing principle," questioning why human cooperation is now driven by financial incentives instead of political efforts to curb greed.
The catalyst for the book was hearing about catastrophe bonds at a university talk, which she found morally troubling. This idea evolved into pandemic (and Ebola) bonds, financializing the risk and response to pandemics.

Quote:

"I was sitting there imagining the selling off of units of human suffering to rich people who would buy them for a chance to make money."
— Dr. Susan Erikson [05:44]

2. What Are Pandemic (Catastrophe) Bonds?

[07:28]

Pandemic bonds were steered by the World Bank to address poor preparation and funding shortcomings for pandemics, especially in poorer countries.
Structured in two tranches:
- Tranche A: 11.5% annual interest, lower risk
- Tranche B: 14% annual interest, higher risk
Bonds would pay high interest unless a pandemic occurred and predefined criteria (“triggers”) were met, in which case the invested money would be deployed for aid.
When COVID-19 hit, the bonds unlocked $132 million across 64 countries (about $3 million per country), a trivial amount during a global emergency.
A critical issue: the models underpinning the bonds were designed to calculate investor risk/loss, not public health outcomes.

Quote:

"They were modeling for investor loss, not for public health success."
— Dr. Susan Erikson [09:34]

3. From Idea to Implementation

[10:57]

Jim Yong Kim, then President of the World Bank, was pivotal in moving the idea from concept to reality.
Kim, an anthropologist and physician, saw the bonds as a solution to the criticism of slow Ebola response but ultimately prioritized financial innovation over robust public health systems.
Erikson believes personality and leadership were decisive in the bond’s creation.

Quote:

"I conclude my chapter on him... he squandered what I saw as a rare opportunity to promote primary care systems around the world... instead, he very literally made pandemics investible."
— Dr. Susan Erikson [12:07]

4. Design Flaws: Criteria and Triggers

[14:44]

To release funds, strict and controversial triggers had to be met:
- At least 12 weeks must pass (delay before aid could be triggered)
- Outbreak must cross borders (multi-country spread)
- Minimum number of deaths
- At least one affected country had to be a designated poor country
- Predefined growth rates of infection
The 12-week delay and death requirements were especially criticized as impractically insensitive to on-the-ground reality.

Quote:

"In the case of infectious disease, that's a very long time... the beginning of those 12 weeks, you might have an opportunity to actually work on contagion... but three months—that’s... way late."
— Dr. Susan Erikson [15:40]

5. Data, Black Boxes, and Public Knowledge

[19:56]

The rules and criteria were set out in a 386-page prospectus for transparency with potential investors—but few outside financial circles understood or saw it.
Science journalists and some investors saw the flaws and either criticized or declined to participate.
Public knowledge remained limited due to the complexity and sheer volume of the documentation.

Quote:

"They were certainly known in the financial world. They were also a reason why some investors did not invest. And I talked to those folks, too..."
— Dr. Susan Erikson [21:27]

6. Anthropological Perspective: Data Collection in Crisis

[22:25]

Erikson draws on her extensive fieldwork in Sierra Leone, describing the immense challenges of data collection (e.g., unreliable roads, enumerators traveling on motorcycle in arduous conditions).
She notes the disconnect between the World Bank’s data demands and the realities of emergency healthcare in under-resourced countries.

Quote:

"The minute the World Bank made data in poor countries the criteria for triggering millions of dollars, then I felt it very personally..."
— Dr. Susan Erikson [23:19]

7. Who Invested and What Happened?

[25:11]

Investors: Primarily institutional—pension funds, hedge funds, specialized catastrophe bond traders, and asset managers; 26 original investors, with active secondary trading afterward.
Outcomes:
- Class A: Investors received moderate returns (~3% annually)
- Class B: Higher-risk investors lost their entire investment

8. The Future of Pandemic Bonds

[27:39]

The World Bank considered a “Pandemic Bond 2.0” but cancelled their plans after public criticism soared during COVID-19.
Industry insiders suggest similar models may resurface with tweaks, as the demand for innovative risk transfer persists. Some are “waiting for people’s memories to fade” to try again.
Key challenge: persuading rich countries to subsidize investor payouts; appetite for this has shrunk.
Erikson situates pandemic bonds in the broader historical shift toward financialization and privatization of healthcare, expressing skepticism about a meaningful policy reversal.

Quote:

"Capitalism is insidiously creative in terms of how it comes up for new...ways to make money. And this making money on money...this is a new kind of turn in global economy."
— Dr. Susan Erikson [32:45]

9. What’s Next? Erikson’s Future Work

[33:15]

Erikson is now researching speculative finance and data modeling around planetary health, particularly wildfire risk and the role of AI.
She notes widespread public health resistance to confronting finance-driven aid models, emphasizing the need for more anthropological scrutiny.

Quote:

"There needs to be anthropologists, I think, like me, who are interested in saying, okay, first we need to understand these things, and then...figure out...how to do policy differently."
— Dr. Susan Erikson [34:10]

Notable Quotes & Memorable Moments

"I was sitting there imagining the selling off of units of human suffering to rich people who would buy them for a chance to make money."
— Dr. Susan Erikson [05:44]
"They were modeling for investor loss, not for public health success."
— Dr. Susan Erikson [09:34]
"I conclude my chapter on him... he squandered what I saw as a rare opportunity to promote primary care systems."
— Dr. Susan Erikson [12:07]
"In the case of infectious disease, that's a very long time... three months—that’s... way late."
— Dr. Susan Erikson [15:40]
"[The criteria] were a reason why some investors did not invest. And I talked to those folks, too..."
— Dr. Susan Erikson [21:27]
"Capitalism is insidiously creative in terms of how it comes up for new with new ways to make money."
— Dr. Susan Erikson [32:45]
"There needs to be anthropologists...interested in saying, okay, first we need to understand these things, and then...figure out...how to do policy differently."
— Dr. Susan Erikson [34:10]

Timestamps for Major Segments

Introduction and Author Background: [01:35–06:47]
What Are Pandemic Bonds?: [07:28–10:31]
From Idea to Implementation & Role of Leadership: [10:31–12:48]
Were These for Public Health?: [12:48–14:32]
Criteria and Triggers Deep Dive: [14:32–18:14]
Data Transparency & Black Box Nature: [19:38–21:44]
On-the-Ground Data Challenges in Sierra Leone: [22:25–24:44]
Who Invested & Their Returns/Losses: [25:11–27:30]
Future of Pandemic Bonds & Global Health Financialization: [27:39–32:57]
Erikson’s New Research Directions: [33:15–34:42]

Tone and Language

The tone is candid, critical, and often personal. Dr. Erikson combines vivid storytelling from her anthropological fieldwork with sharp political-economic analysis, making complex financial instruments understandable and their ethical stakes vivid for listeners.

Conclusion

This episode offers a richly informed critique of pandemic bonds and their implications for global health, finance, and ethics. Dr. Erikson exposes how high finance increasingly shapes the fate of public health interventions, urging a more critical, anthropologically informed approach in policy and aid. For those interested in global health, disaster finance, or the human consequences of speculative markets, this conversation is both illuminating and provocative.

Loading summary

Transcript45 lines

[00:00]
Dr. Susan Erickson
Mint is still $15 a month for premium wireless. And if you haven't made the switch yet, here are 15 reasons why you should 1.
[00:08]
Dr. Miranda Melcher
It's $15 a month.
[00:09]
Dr. Susan Erickson
2. Seriously, it's $15 a month. 3. No big contracts. 4. I use it.
[00:15]
Dr. Miranda Melcher
5.
[00:16]
Dr. Susan Erickson
My mom uses it. Are you. Are you playing me off? That's what's happening, right? Okay, give it a try@mintmobile.com Switch upfront.
[00:23]
Dr. Miranda Melcher
Payment of $45 per three month plan $15 per month equivalent required. New customer offer first three months only, then full price plan options available, taxes and fees extra. See mintmobile.com.
[00:32]
Dr. Susan Erickson
Up a sweat Working on.
[00:35]
Dr. Miranda Melcher
Your passion and endless action? Ditch the glitch with Liquid IV's new energy multiplier, Sugar free refreshing flavors like strawberry, kiwi and BlackBerry lemonade. Scientifically formulated to support physical energy, hydration.
[00:52]
Dr. Susan Erickson
Focus, mood and social stamina. Liquid IV's new energy multiplier Sugar free hydrating energy. Tap the banner to learn more. Ford BlueCruise Hands Free highway driving takes the work out of being behind the wheel, allowing you to relax and reconnect while also staying in control. Enjoy the drive in BlueCruise enabled vehicles like the F150 Explorer and Mustang Mach E. Available feature on equipped vehicles. Terms apply. Does not replace safe driving. See Ford.com BlueCruise for more details.
[01:31]
Commercial Announcer
Welcome to the New Books Network.
[01:36]
Dr. Miranda Melcher
Hello, and welcome to another episode on the New Books Network. I'm one of your hosts, Dr. Miranda Melcher, and I'm very pleased today to be speaking with Dr. Susan Erickson about their book titled Investable When Pandemic Risk Meets Speculative Finance, published by MIT Press in 2025. This book takes us behind the scenes, behind a whole bunch of different scenes, actually, to understand a type of international financial instrument that might sound really boring and dry. Maybe that's on purpose. We'll talk about it. But the point here is that this thing that might seem just technical actually has a whole bunch of impacts. We're going to talk about real life impact to actual humans on the ground. We're going to talk about impact in terms of how we think about data, how we think about money, how we think about aid. And all of this is buried in all sorts of, I imagine, incredibly long PDFs and behind many layers of security and boardrooms. And so, Susan, I'm so pleased to welcome you onto the podcast to tell us about what you've excavated from behind these barriers and brought to us today.
[02:40]
Dr. Susan Erickson
Randall, it's wonderful to be here. Thank you.
[02:42]
Dr. Miranda Melcher
Can you please start us off before we get behind into all of those rooms. Em, can you introduce yourself a little bit and tell us why you decided to write this book?
[02:52]
Dr. Susan Erickson
Sure. So I'm an anthropologist by training and an expert in the political economy of health. And I've worked in both very wealthy and very poor communities. I've spent most of my research life in Germany and Sierra Leone working to figure out how data and money and technology move, if you can say that in communities as artifacts of governance. And so how does this mix increase and decrease people's likelihood of being hale and hearty, healthy and well over the course of their lifetimes? And so for the last 15 years, I've developed a special interest in greed as an organizing principle. I just am very curious about why and how it became so culturally common to assume that humans need to be financially incentivized to help each other as opposed to organizing ourselves politically in ways that would intentionally and by design curb greed. Know when enough is enough. Like when did a billion dollars not become enough for individual. And as an anthropologist of health, I study how humans organize themselves to keep or fail to keep each other well. I analyze what people and communities and nations do and don't do about the cold, hard fact that human beings get sick over their life course. And rather than focusing on the viral, bacterial or genetic origins of sickness, my attention is really on the money and the politics because, well, for one thing, impoverishment and bad government can truly make you sick. There's certainly enough money in the global system for everyone to have at least decent primary healthcare when they need it. But it's the politics and the money systems that get in the way of that. As for why I wrote the book, fundamentally, when I first learned about catastrophe bonds, the idea of them made me kind of sick. And I was at a lunchtime talk in a university and a speaker started bragging about this new idea he had introduced at the World bank to address funding for weather catastrophes like hurricanes. He was arguing that we should make them investable, by which he meant that the risk of them should be sold to private investors through special insurance devices. He wanted to get catastrophe management out of government hands and into private ones. And the way to incentivize private investors was to give them a chance to earn a hefty rate of return, hefty rate of interest in exchange. So he's basically saying, I'm going to appeal to your investor greed. That's how we'll fix the problems of humanitarian aid. And all the while I was sitting there imagining the selling off of units of human suffering to rich people who would buy them for a chance to make money. And then fast forward 10 years. I'm a mid career medical anthropologist with expertise in the global political economy of health. By this time and around 2014, during the West African, African outbreak of Ebola, I started hearing about Ebola bonds. And I remembered this lunchtime talk. There was a British venture capitalist who went on MSNBC to talk about Ebola bonds and there was mention of them on Bloomberg News. And then I got a copy of a not yet public document out of the World Bank. And by this time Jim Young Kim, a fellow anthropologist, was the World bank president. And I learned that he was pursuing this new form of financialized aid that sounded a lot like what I had heard about Ebola bonds. These Ebola bonds, which became the pandemic bonds, are an exemplary of decades long turns towards financialization of global health. And with a bit of the greed kind of spicing, spicing the progress, if you can call it that, as a way to provide financial help.
[06:47]
Dr. Miranda Melcher
You've just mentioned there a whole bunch of things that I'm hoping and expecting we're going to talk about in more detail. So that's a really useful foundation for our conversation and I think also a useful explanation of how books come to be. It's never sort of one moment, it's the kind of this and then this and then this and they all sort of pile up together. But before we go further, I want to make sure we understand exactly what it is that you're talking about. So you've mentioned catastrophe bonds and Ebola. We're talking here about pandemic bonds, essentially. So what actually are they and how do they fit into our otherwise existing notions about how money for health emergencies works?
[07:28]
Dr. Susan Erickson
So let me just back up a bit and talk about when the World bank introduced the pandemic bonds, it really was responding to a very real problem, and that is that countries, both rich and poor ones, do not plan and prepare very well for pandemics. COVID 19 of course cost the world tens of trillions of dollars. Poor countries have the challenge of not having enough fungible cash or credit to spend in a pandemic emergency. And the bonds were one attempt to remedy that shortfall. But you've asked the most challenging question to deliver in a sound bite, which is what are the pandemic bonds? And quite frankly, they're pretty complicated. Obviously I've written a whole book about them. See chapter two for all the geeky details. But in short, from an investor's perspective. They were two tranches of three year bonds. One tranche offered 11.5% interest per year and another offered the more risky tranche offered 14% interest per year. And they were set up to either make money for investors or release that same money if a pandemic hit. And there were all of these data criteria that had to be met before the money was released for a pandemic. So when Covid hit, they did provide $132 million of investor money for pandemic response. And that money was spread out over 64 countries, each country receiving an average of $3 million each. Which of course, as we know, is not a lot during an emergency. Yes, very small. And here's another way to describe them. So the pandemic bonds were a financial instrument designed by a committee to provide funds to poor countries in the event that a pandemic in the vague hope that poor people would receive the care that they need. But of course, the bonds were not about a healthcare intervention or implementation. They were only about the money for it. And they were only ever about the money, even though they weren't always sold that way. They were never about the staff stuff, space and systems, those four S's that Paul Farmer talks about that are necessary for emergency care and pandemic. I do want to just quickly add that one of the most disturbing findings in my research was that when I opened the black box of the modeling that was used to assess and price the risk for the bonds, I found that they were modeling for investor loss, not for public health success. And it was the modeling for the bonds that was to determine the chance for whether or not the investors would lose their money or the money would go to pandemic response. But yeah, that's, that's really at the heart of the book, telling that story about how to incentivize investors so that they would put up the money, but also creating very, very high thresholds, very stringent criteria before the money was actually released.
[10:31]
Dr. Miranda Melcher
Yeah, that's actually, I think, where I'd like to go next, which is sort of, it's one thing to come up with an idea for a financial instrument like this, but as you've just described, there are bunch of ways that it could have just sort of stayed an idea phase and not made it into a functional financial product. So how did that happen? How did it go from being just an idea of tying all these things together to being actually a thing that people really put money into?
[10:58]
Dr. Susan Erickson
Well, I have a chapter called Personality Matters and It very much mattered that the president of the World bank at the time, Jim Young Kim, who's a anthropologist and physician, had been made by Barack Obama the president of the World Bank. And, you know, he was used to personal and career successes in his life. I tell his story and, you know, he was rightfully distressed about the world's neglect of Ebola in West Africa on his clock. And he made the pandemic bonds one of the signature accomplishments of his presidency. The bonds took about two years to develop, and they were issued in 2017 with a maturity date of 2020. And he was president until February of 2019. And Covid triggered the bonds in May of 2020. But back to Jim Kim. I just have to say, being president of the World bank, of course, is obviously a position of great power. And when I asked people if the bonds would have existed with him, if that translation as you. The idea to the instrument would have happened without him, most people said emphatically, no, no way. And I also have to admit, though, I was truly loathe to write about him as a fellow anthropologist, but he was so central to the pandemic bond story that I conclude my chapter on him. Well, I was not shy about concluding that he squandered what I saw as a rare opportunity to promote primary care systems around the world, which would be an excellent and efficacious first line of defense against future infectious disease. Instead, he very literally made pandemics infestible.
[12:49]
Dr. Miranda Melcher
So were these designed to be for public health at all, or were they meant to be for public health and all these other things, or where did public health play into how these were constructed?
[13:02]
Dr. Susan Erickson
They were looking for new ways to fund. The World bank was definitely looking for new ways to fund pandemics. And yes, the target was delivering money for pandemic care. And when you ask the World bank, did they succeed at this, they say, yes, we've raised $132 million of previously untapped money that could go to the service of pandemic care. But when you actually unwind the bonds, as I did in my research, and look at the data and modeling, what gets revealed, you know, those are typically topics that are dull as dirt for most people, but when you unwind, for an anthropologist, they're just artifacts, right? And so when you unwind, what is revealed by the choices that got made in terms of the data that they used as well as the modeling that was deployed, what you find is that the models were primarily geared towards assessing investor loss rather than public health success. And so you know, there's. There's kind of. There's many stories within my stories in. In terms of. In terms of the book. But that, to me is. Is one of the most important, I think, takeaways relative to what the anthropological research could reveal, that when you unpack these models, they tell a story because humans had to make choices along the lines of their priorities.
[14:33]
Dr. Miranda Melcher
Yeah, I think that's a story we want to go into a bit more detail about. So what are some of these decisions and triggers and things that are built into the models and the calculations that they're making?
[14:44]
Dr. Susan Erickson
So the bonds were meant to release money for care after threshold criteria were met. And these criteria themselves were quite controversial among the people who knew what was being designed, how the. How the bonds were being designed. And this includes people in the World Bank. I actually ended up talking to many people, some retired, some who were sure not to meet me on World bank grounds, you know, in coffee shops in Washington, D.C. or even in. In Sierra Leone, in Freetown. I met with people from the World bank. And there were people, some of whom were actually in the position of being required to promote them, who were very critical about these particular criteria. So, for example, one of the criteria was that there 12 weeks needed to pass before the money could be released. Well, 12 weeks is three months. And in the case of infectious disease, that's a very long time. And, you know, the beginning of those 12 weeks, you might have an opportunity to actually work on contagion, public health contagion strategies. But three months, that's a. As we know, certainly with COVID Right. We got announced on 31 December in 2019, and then declared a public health emergency in March. The money wasn't released by the World bank for these bonds until May. And so when you also think about what it actually takes to get money up and running and becoming effective, May was way late. So 12 weeks was a really long time. Two or more countries needed to be effective. So when Ebola broke out within the Congo, for example, the money couldn't be released even though the death counts, which was another of. Well, it was the most controversial criteria that a certain number of people needed to die before the bottom bonds could get triggered. In the Congo, a lot of people died certainly past the threshold, but it hadn't crossed borders yet. And so that not crossing of borders meant that the money couldn't be released, even though there was serious death and infection within Congo. One of the countries that was affected that was just experienced a pandemic had to be a World bank designated poor country. And then the spread of infection had to reach a certain statistically determined growth rate. And this was one of the aspects that took a very long time to assess. Because if you actually think about what data is available during a pandemic and if you imagine an under resourced hospital or clinic in a poor country and you imagine people struggling actually to keep people alive and themselves in Sierra Leone, for example, the country that I am most familiar with because I've long done research there, know a third of the healthcare workers died of Ebola themselves. And so when you imagine the data collection in an environment like that that was supposed to be in the moment in order to trigger the money for this bond, you can start to imagine how impractical the data criteria actually were. Unreasonable. I would even, I would even say so yeah, this, that was how they were supposed to work by design. I can also add that the World bank got a lot of grief for setting death as one of the primary criteria for whether or not the bonds would get released.
[18:14]
Commercial Announcer
I'm Christian McCaffrey, pro running back and Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the Internet last year and I think this season's lineup is even cooler. You and so does my wife who keeps stealing all my hoodies Stay fit for the season and Abercrombie's newest arrivals shop NFL by Abercrombie in the app, online and in store.
[18:44]
Dr. Susan Erickson
This episode is brought to you by State Farm. Checking off the boxes on your to do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone or using the award winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there.
[19:10]
Commercial Announcer
Lowe's knows how to help make your home holiday ready for less. Get Select Style Selections vinyl flooring for just $1.99 per square foot and have it installed before the festivities begin. Our team can help you every step of the way. See a Lowe's Red Best Associate or visit Lowes.com HolidayInstall to get started. Lowe's we help you save basic Install only. Date restrictions apply. Subject to availability. Install by independent contractors. See Associate for details. Contiguous us Only.
[19:39]
Dr. Miranda Melcher
Yeah, I'd like to hear more about that because as you're listing out these criteria, there are some pretty obvious ones that would Raise eyebrows, obviously death count being one of them. So how much were these criteria sort of publicly known versus hidden away in black boxes when this whole thing was created?
[19:56]
Dr. Susan Erickson
Well, they had to be publicly known in order for the World bank to convince the investors that they had stringent enough criteria that the investors wouldn't lose their money at the first death. And so, you know, in investment worlds, that kind of information, you know, there was, there was a 386 page, what they call prospectus at the World bank that detailed all of the different rules and regs, terms and conditions of the pandemic bonds. And so it was very well laid out in terms of what the criteria would be. And when journalists, and certainly science journalists got a hold of what some of the criteria were, many were appropriately disgusted and wrote about it. And you know, I have to, this is just an aside, but I was truly intrigued by how carefully the folks at the World bank were tracking the criticisms of the pandemic bonds. The pandemic bonds were so public and started taking such a kind of enigmatic aspect of what the World bank was doing. And you know, the prospectus started making its circulation around in, in certain circles, including anthropological ones, to my benefit. But how well known were they? Well, in order to get investors to invest, you have to lay these kinds of terms out. So they were certainly known in the financial world. They were also a reason why some investors did not invest. And I talked to those folks too and they simply said, yeah, the data, the data collection doesn't make any sense. The criteria doesn't make any sense, or at least not enough sense for us to risk millions of dollars in these bonds.
[21:44]
Dr. Miranda Melcher
Before we get to the investors that did choose to use these instruments. I wonder if we can talk a little bit more about what you mentioned in terms of your research on the ground in Sierra Leone. Because it's one thing to look at, for example, a massive PDF like that prospectus and go, hang on, that doesn't quite make a lot of sense. Which clearly sounds like it had questions enough that that alone would raise some eyebrows. But you, as you mentioned, have been on the ground in some of these situations where these kinds of bonds would have, or in fact used. So is there anything further you want to tell us about your anthropological work in that context and how it made you evaluate what was being attempted with this pandemic bond?
[22:25]
Dr. Susan Erickson
Yeah, well, there's a lot of stories here. So, you know, as a 20 year old, after university I went to Sierra Leone as a volunteer and worked in clinics and in Schools. And I had a motorcycle while I was there and very much enjoyed riding around on the, on the roads of Sierra Leone, which is first of all a very beautiful country. But there's two seasons. There's the rainy season, the dry season, and the dry season, best motorcycle riding ever. The rainy season. It's like riding in concrete. And so I start my data chapter, which I have to say is my favorite chapter, with a story of a face plant on a particular muddy road. And just the minute the World bank made data in poor countries the criteria for triggering millions of dollars, then I felt it very personally what it is to have to travel these roads and collect data. And there are folks called enumerators, that's both men and women, usually about 20 to 30 years old, riding motorcycles in both the rainy season and the dry season, collecting data from small vil villages. They get sent out by NGOs or the government of Sierra Leone to collect data. And you know, they, they. It is an exceptionally fraught aspect of data health collection. But I have to say I live in Canada and if you travel to the north, it is also difficult, you know, in any, in many rich countries to collect data in rural areas. But the case that I, I use Sierra Leone as, as a, something of a case study because I'm so familiar with it. And, you know, I lived in Sierra Leone for two years in my 20s and then have gone back repeatedly now as an anthropologist. And yeah, the data collection is just an exceptionally fraught process. And if you think about adding the overlay of a pandemic and the stresses and strains on a healthcare system, any pandemic anywhere, of collecting data that can then be used for a Wall street bond, you can see the complications.
[24:45]
Dr. Miranda Melcher
Well, you can see the complications. And those of us who are listening to this and have read the book can see the complications. But clearly some investors didn't see the complications or saw them and were okay with it. So let's talk about the actual issuing of these things. Who invested in these bonds? When were they done? Like, what was the plan? Once we go from idea to real option on the table, who said yes?
[25:11]
Dr. Susan Erickson
So it was primarily there were a lot of pension funds. The bonds had to be, had to be invested in by what's called institutional investors as opposed to retail investors. Like, if you and I were going to invest in something, we would be as individuals, we would be considered retail investors, mom and pop investors. But they were really going after the, you know, the World bank wanted kind of the whales of Wall street in terms of their investor class. And so that included pension funds. There's folks who only trade catastrophe bonds, which is the type of bond that the pandemic bonds are, and asset fund managers, hedge funds, private Equity. There were 26 original investors. But quite frankly, the day after the, the bond went live, it could have been a completely different set of folks because there was buying and selling of the bonds after the fact. And so we do know the identities of some of, of, of these folks, but just as a, as general categories, it's the folks that I, that I just mentioned.
[26:14]
Dr. Miranda Melcher
Interesting. That definitely tells you kind of what the goals were in terms of the creation of these bonds, even more than everything you've been telling us already. And you mentioned earlier that some of these bonds did actually get paid out. So what happened there? Who, who got money when, for what?
[26:30]
Dr. Susan Erickson
So there were two different bonds, a class A and class B. And they were class A was considered less risky. There was less of a likelihood that the investors would lose their money. And in class A, when you tally up their gains, because they were getting interest every six months, when you tally up their gains and compare that to their losses, they ended up making class a investors about 3% a year. So not a, not a, not a spectacular return, not the 11.5% interest annually that they were expecting. Now the class B bond investors, they were expecting a 14% interest gain and in fact they lost all of the money. They were considered the higher risk bonds, so that's why they had the higher level of interest. But they did lose all of their money.
[27:30]
Dr. Miranda Melcher
And so is this going to continue? Are we going to have another round of pandemic bonds or was this a one off experiment never to be repeated?
[27:39]
Dr. Susan Erickson
Well, they did. The World bank did actually identify and say that they were starting to recruit data analytics firms for a pandemic bond 2.0, which they then canceled when the realities of COVID hit and more and more was publicly revealed about the bonds. They really don't like bad publicity, of course. Whether the World bank will try it again I think remains to be seen. But the insurance linked securities portion of Wall street is the place to keep an eye on. Because for example, In February of 2025, just this past February, I was in New York City for Insurance Links securities conference and met with people that I had met with in their research for my book and asked them the same question, how likely is it? And some of them were quite frank and simply said we're waiting for people's memories to fade. Because in fact there is a need for certain kinds of risks to be covered with this kind of model, we may tweak the criteria, the triggers. We would, you know, they might not use death, they might actually make the bonds available for pandemic preparedness if certain benchmarks are met. So there is some kind of tweaking that can happen to make these bonds more appealing to lots of different communities and groups. But you know, one of the biggest problems is going to be if they still, if the World bank does try this again and uses their model. Well, it's that the design requires that rich countries put up the money for investor interest. And when the bank first started designing the bond, they had like 20 people who they. 20 countries, sorry, that they were in conversation with about putting up the money to give to investors so that they might be induced to raise this money. It turned out that of the 20, only Germany and Japan ended up donating money to pay investors. And of course this was a problem actually in Germany where health advocates were rightly arguing that the money could have easily been donated directly to the countries rather than following the complicated and circuitous route of the pandemic bonds design. And so whether or not they'll be able to get a hefty portion, many hundreds of millions of dollars in reserve to pay out to investors whether or not rich countries will do that. Germany's a hard no. Japan didn't like the bad publicity. So whether or not there will be another round coming out of the World bank remains to be seen. But I think the model, when you talk to the insurance linked securities folks, they tend to say that the World bank proves something, that the mechanics, the World bank made the mechanics work and that that was instructional and interesting and replicable. And so one of my main concerns as somebody who follows global health is that we've been basically since the 1880s kind of in transition. In the 1880s there was an increased interest then over the next couple decades in universal healthcare providing care. The government provided care and designed different of course, kinds of. The UK has a certain kind of system, Germany has a certain kind of system, Canada has a certain kind of system in terms of a universal availability of healthcare. And you know, there's problems everywhere. But on the other hand you've also got the model of the US which is very ad hoc. They have a definitely a mixed social, socialist and for profit kind of model. But it leaves a lot of people, of course a lot of people fall through the cracks in the U.S. system. So you know that that move from universal healthcare to more welfare minded of the 1930s kind of healthcare to then a privatization in the 70s and 80s as an active part of healthcare design to now what we've got is kind of an outgrowth of the privatization. In terms of financialization, that trajectory is on a pretty heady course and it's built a lot of steam. And so whether or not there will be a turning back from that, as there was a bit in the pandemic, there was. Governments kind of took over in terms of we're going to provide free vaccines, we're going to provide masks and tests and you know, but that's been walked back. And so what does it look like in the future? I mean, I am currently seeing just more and more moves towards financialization in the way that the pandemic bonds were trying to model. So it probably won't look exactly like those bonds. But you know, capitalism is insidiously creative in terms of how it comes up for new with new ways to make money. And this making money on money as opposed to from wage labor or product production, you know, this is a new kind of turn in global economy.
[32:58]
Dr. Miranda Melcher
Well, you've certainly helped us figure out what to pay attention to going forward, so that's definitely helpful. And in that vein, what might you be working on as we move into the future with this book out in the world off your desk? Any newer upcoming projects that you want to flag or highlight?
[33:15]
Dr. Susan Erickson
Yeah, I have new money to look at how people, okay, this probably won't surprise me how people are going to make money on planetary health concerns, especially, you know, looking at the modeling and the data for wildfire. So that's one project I have money for. And then I'm also interested because I've long been interested in different aspects of technology and big data. I'm looking at how AI will be deployed to assess wildfire risk because there's just all kinds of new possibilities. Right. I mean, as a nerd, you know, it's a very exciting time to try to figure out what these modalities look like and unpack them so that people understand them and then figure out whether they themselves want to actually critique them and make policy changes. I mean, for me, one of the most interesting aspects of studying the pandemic bonds was the resistance that public health folks had to thinking about this. I cannot tell you the number of people that came up to me after I would give talks and would just say, this is such a depressing topic. I really don't want to know about this. But. But you know, this is the way of the world and so there needs to be anthropologists, I think, like me, who are interested in saying, okay, first we need to understand these things, and then we need to figure out, perhaps hopefully, how to do policy differently.
[34:42]
Dr. Miranda Melcher
Well, anyone who wants to find out more about pandemic bonds and what's actually happening with them can of course read the book we've been discussing titled Investable When Pandemic Risk Meets Speculative Finance, published by MIT Project Press in 2025. Susan, thank you so much for joining me on the podcast.
[34:59]
Dr. Susan Erickson
Oh, Rand, it's such a pleasure. Thank you so much.
[35:15]
Commercial Announcer
And Doug, here we have the Limu.
[35:18]
Dr. Susan Erickson
Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.
[35:31]
Dr. Miranda Melcher
Uh, limu is that guy with the binoculars watching us?
[35:34]
Commercial Announcer
Cut the camera.
[35:35]
Dr. Miranda Melcher
They see us.
[35:35]
Dr. Susan Erickson
Only pay for what you need@libertymutual.com Liberty Liberty Liberty. Liberty Savings Ferry unwritten by Liberty Mutual Insurance Company and affiliates. Excludes Massachusetts.