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Despite medical strides in preventing the rejection of transplanted human organs, thousands of Americans who require such transplants face a life or death crisis because of the current methods of procuring organs from recently deceased individuals. Under existing public policy, the rising success rates for transplants of kidneys, hearts, livers, lungs, pancreases, and other organs have created a marked shortage in the number of available cadaveric organs. As a result, a growing backlog of patients have been placed on official waiting lists for needed organs. The shortage and backlog have generated heated public debate about how to manage and resolve the problem of the undersupply of such organs.

In this study, David L. Kaserman and A. H. Barnett trace how the current organ shortage grew from a public policy based more on accident than design. The earliest transplants were of kidneys donated by a living relative, so no shortages or waiting lists existed. In addition, in 1984 Congress passed the National Organ Transplant Act, which prohibits payment to organ donors to increase the supply of organs for transplantation.

Kaserman and Barnett show that Congress’s prescription of a market for organ procurement has been an abject policy failure. They demonstrate how a market system with procurement firms making for-fee arrangements with living donors for post-death extraction or with relatives of deceased potential donors would create supplies that over time would meet demands and save thousands of lives at relatively low costs to the transplant recipients and insurance companies.

The AEI Evaluative Studies series series aims to promote greater understanding and continuing review of major activities of the federal government. Each study focuses on a government program or policy in operation by examining its purposes, administration, costs, and effectiveness and then recommends practical reforms for improved performance.

David L. Kaserman is the Torchmark Professor and chairman of the Department of Economics at Auburn University. A. H. Barnett is a professor in, as well as the chairman of, the Department of Economics, International Studies, and Public Administration at the American University of Sharjah in the United Arab Emirates.