Australia to Compensate Organ Donors

Australia once again proves that it is a world leader in innovative public policy with an experimental plan to compensate (living) organ donors.

Workers who want to donate a kidney will be offered up to six weeks’ paid leave under a federal government plan to reduce the waiting list for life-saving organs.

Health Minister Tanya Plibersek and parliamentary secretary for health and ageing Shanye Neumann say the government will put up $1.3 million over two year for a trial that will be reviewed in 2015.

Ms Plibersek says living donors will be paid six weeks on minimum wage, totalling up to $3600, to help take the financial pressure off before and after the major surgery.

…the scheme is one step towards bridging the gap between the number of kidney donors and recipients.

The proposed experiment does, however, contains a peculiar restriction which is worth highlighting because it illustrates a tension between economics and ethics, at least ethics as conventionally understood (e,g, Michael Sandel). The compensation “will only be available to donors who have a job.”

The idea, I believe, is to avoid any hint of “exploitation” or “pecuniary coercion.” The problem is that another word for pecuniary coercion is incentive. Thus, the goal is to increase the supply of organs without creating an incentive to supply organs, at least not a strong incentive. To help navigate this invisible line the amount paid is low and the only people who can receive compensation are the ones who don’t need the money. In short, the plan discriminates against the unemployed so that no one can accuse the government of exploiting the unemployed by giving them too much money.

Nevertheless, although the amount is small and restricted, Australia’s willingness to experiment with the idea of compensation in order to save lives is laudable and potentially groundbreaking.

Hat tip: Andrew Leigh.

Addendum: For other innovative approaches to the worldwide shortage of transplant organs see my articles here and here.


So when this doesn't actually increase the number of available kidneys, this will be the argument, yes? Australia isn't a real example of organ markets, therefore its failure is not evidence against organ markets. No true Scotsman, and all that.

No. And yes. If you eliminate the people with financial incentive, then don't be surprised if a financial incentive doesn't work. But what matters is whether the prices will clear the market. Kidneys will just have to be a little more expensive and the poor a little poorer since you don't really own your kidneys if you need the money.

Think about what it would take for you to just barely part with a kidney. That's probably about what the price should be. For me, assuming there would be open-access in the future for myself and family, it is probably $10-20k. If there will always be the ability to buy, then that allows you to pay-it-forward in a sense without fear that you are giving up the option on your spare kidney. Donors should of course get kidney credits and bumped to the top of the waiting list. What $3600 does by itself, considering it is below the rational threshold (no surgery is risk-free for example) and limited to only those who don't need the money and barely covers time off of work, is grease the wheels for family and friends to give to one another. So, it does not increase that much the likelihood of stranger-to-stranger donations. So no, it has no features of an actual market, but it is in that direction, if only accidentally so.

Please explain how this is a "market" when the government has fixed the price? This is in essence a price floor and price ceiling. Either the government has magically picked the equilibrium price (yes I realize Proggers believe this to be possible) or the market will remain in disequilibrium one way or the other.

I have to quibble with the framing of the law's restrictions. The law without the restrictions would give a strong incentive for the very poor to sell their organs, even if they find the idea terrifying, simply because they can't find a better way to feed themselves (or their familiy) for a few months. That kind of incentive can be a form of coercion. That's a real ethical issue that needs to be dealt with somehow, not just a symptom of CYA-behavior by the Australian government.

But in reality it's not. Noone is going to start eating poor people's kidneys. Well, not a significant number anyway. And so, when is the government going to fix this almost unrelated coercive poverty problem?

Women can sell their eggs currently, but I'm not aware of this problem in that market.

We also need to ban all jobs.

Allowing jobs would give a strong incentive for the very poor to accept a job, even if they find the idea terrifying, simply because they can’t find a better way to feed themselves (or their familiy) for a few months.

You win the internet today!

Right, because everyone knows poor people don't have jobs because they don't want them. Jobs are being given away at will to anyone who asks for them!

And comparing selling eggs to selling kidneys? Please don't make me laugh.

The left doesn't even get how crappy jobs really are exploitive. It's one reason I don't trust them.

Jon, Australia doesn't have "very poor" people who might need to sell their organs. We have universal social security. It's not generous, but nobody starves.

Fair enough -- I don't know much about Australia's safety net or poverty statistics. I'm thinking of the problem more generally. In the US anyway, there is a nontrivial percentage of the population in deep poverty. I find programs like this to be very problematic in that context. If there were a universal basic income in the US, most of my concerns would go away.

Please explain how a country extorts the poor for their organs? The only way that the "coercive" narrative works is that a country intentionally withholds opportunity so that people are poor and they have no recourse but to "sell" their organs. Why wouldn't a country like that just steal the organs, for example?

Speaking about the "intentions" of a country doesn't make any sense for the most part. All we can do is examine the policies in place and look at the incentives they create.

Current US policies allow a significant fraction of the population to live in high poverty. Collectively, we have chosen not to spend enough money on the poor to assure everyone basics like food and shelter, or alternatively you could argue that we spend enough money, but in the wrong ways. Obviously this is a subject of heated debate. In the end though, that doesn't really matter.

The incentives in this situation are pretty clear. Once you get below some income threshold, there is a strong incentive to sell your organs and risk lifelong health complications in exchange for cash. Would it be a better outcome for impoverished people to take payment for organ donation rather than continue the status quo? Possibly, but it's often true that giving in to extortion is a better outcome than the alternative. That is not an argument favoring exortion.

Surely you realize that I would rather lose my kidney than die or have my entire family die of starvation?

False choices. Death or kidney donation is not a decision someone in Australia would be faced with. And rightfully so.

Exactly... but that is the choice given by the commenter I responded to.

Isn't the real ethical issue that needs to be dealt with the government coercing my entire family to death of starvation, as well as coercing a sick person to death for lack of a kidney, because they feel squeamish about how poor I am?

And if you did get coerced out of your kidney, as long as you progressed in life you'd be able to buy one back if you ever needed it, which you wouldn't, from the thriving kidney market.

I thought the poor were only downtrodden because they lacked the resources to improve their lives. Someone needs to explain why (option to sell kidney) < (forbidden from selling kidney). Until they do, my assumption will be that they just don't want to let the poor buy their way out of dependence.

If that's your concern, from memory one of the Volokh Conspiracers suggested a solution: restrict paid kidney donors to people with household incomes in the top 50% of their country's population.

Maybe they should restrict organ recipients to those who don't really need it either. How dare we exploit people who need organs.

Is that Andrew Leigh the member of Parliament?

Yes. One of Australia's best economist and now a member of parliament. Had a great econ blog too before entering politics but stopped posting after getting elected.

He still has a blog. Granted there is a lot of political stuff on it but this speech from yesterday is a good example of how he fuses his economic past with political future;

So, maybe we should set up the test now on how to measure the effectiveness and efficiency of the program before it is implemented:

1. Number of organs harvested without compensation today v. number of organs havested without compensation (volunteers) and those harvested with compensation.

2. Look look at the effect of compensation on voluntarism--do people now cease to give because they believe others will think they gave because of the money, and not altruism; do volunteers believe the market will supply the organs and therefore don't; does the status of volunteerism decline because people think you are doing it for the money; how does the volunteer harvesting community encourage voluntarism when there is compensation; what is the amount of total advertising now that you've added a compensation model (ie, is there more total advertising, which could increase both volunteering and pecuniary harvesting.

3. What are the characteristics of the supply side: age, income, etc. and how does the mix change. Is there a different supply elasticity for a kidney than for another organ?

4. Do people become reckless because they can always buy a replacement organ (farfetched).

5. Will they give a vistors visa for an organ? Citizenship? Ice cream? Do you get a finder's fee or a bonus?

6. What should we add to the model?

The other thing to watch for is if they decide to discontinue the money program, or limit how much the state will pay, will there be an opportunity to elicit volunteerism since you shifted the domain to money.

Moral of the story, if you sell a kidney, don't piss it all away.

When a new person is transplanted on to a heart, the heart will typically be unable to pay for the person.

So why doesn't some small country (perhaps a tropical island country with nice weather and beach resorts) legalize organ sales and set up a donor registry and kidney-transplant industry? Dying people could get organs. Poor people could get life-transforming amounts of money (as well as a nice vacation they'd never otherwise enjoy).

Or a cruise ship. The Carnival Convalescence.

My understanding is that the current shortage of organs is not so much caused by the shortage of organ donors but by the inefficiencies/mismanagement of the distribution systems (waiting lists) which are usually run by bureaucrats and other third-party evaluators who have no actual incentive to allocate organs to the most needed patients. Think about it this way: There are millions if not tens of millions of people have organ donor status stamp on their driver's licenses but when they actually been rolled into hospitals, the doctors have little clue as to which organ is most needed on the market right now and therefore most available organs will go to waste.

The solution I think is to create some sort of market mechanism in the distribution system where supply and demand information will be more easily available to hospitals and patients across the country. You don't have to pay organ donors for such system to work, you just need to allow some form of monetary incentives for "organ brokers" who successfully match supply and demand.

There might be a case for "pecuniary coercion" but kidneys ain't it. You sell something you don't need. Suddenly you are instantly richer even if you don't sell your kidney. Let's say you do. And by some extremely rare twist of fate you need a kidney in a way that only kills the kidney you have left. Because if you get a disease that destroys both kidneys you are actually no worse off and substantially better off than otherwise (my relative got an acute disease that destroyed both kidneys, she could have been in that situation and had $3600+ in her pocket, you feel me). So, you loose only the one kidney by some rare disease that only kills one kidney. What do you do? Exactly what you do today, dialysis, to waiting list, to receiving one of the plentiful kidneys from the thriving kidney market that now reduces the cost of routine kidney replacement surgery, except you ride in style with the money you used from your kidney years ago to pay for those last couple semesters of college and got a good job.

Sometimes when this issue pops up I get the feeling I'm arguing with my wife. She has no actual reason that I can't have a Ski-doo, and she'd even enjoy it, she just wants something totally unrelated in return. I wish we'd sold gay marriage 10 years ago for a new 100 year lease on guns.

NOTE: The US has a program, NLDAC, that compensates living donors for travel costs. It does not pay for lost wages.

Cadavers Cruise Lines here we come!


my names are Robert Lawson, a 38 years old, the doctor confirm that my two kidney well OK that i can use one kidney, and i want to give out one of them to who ever needs it, because in my life i made a var that i will save life know matter what it will take from me. of what use it is to me if i can not help that one ding soul. do not ask me why, because it is what i have made up my mind to do.
i pray that you will not die but live.

You can contact me on Email:

Mr Lawson.

Dear Sir

Have a good day. I want co-operation for very poor people some money it is
will spend for surgical treatment, food, cloth and dwelling-place etc.
Please help me a very good social work.



Bogra-5800, Bangladesh.


I am 36 years, i want to donate one of my kidney contact .

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