Tobacco Free Initiative (TFI)

Economics

Few people now dispute that smoking is damaging to health on a global scale. However, many governments have avoided taking action to control tobacco use—through measures such as higher taxes, comprehensive bans on advertising and promotion, or restrictions on smoking in public places—because of concerns that their interventions might have harmful economic consequences. The World Bank examined in a 1999 Report, Curbing the Epidemic, Governments and the Economics of Tobacco Control, the economic questions that policymakers must address when contemplating tobacco control. This report demonstrates that the economic fears deterring policymakers from taking action are largely unfounded. Policies that reduce the demand for tobacco, such as a decision to increase tobacco taxes, do not cause long-term job losses in the vast majority of countries. Further, despite fears to the contrary, higher tobacco taxes do not reduce overall tax revenues; rather, revenues climb in the short and medium term following an increase in tobacco taxes. Thus, such demand reduction policies could bring unprecedented health benefits without any detriment to national economies.

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WHO Prevention of Noncommunicable Diseases (PND)
Noncommunicable Diseases and Mental Health
20 Avenue Appia
1211 Geneva 27
Switzerland
Telephone: +41 22 791 4426
Fax: + 41 22 791 4832
E-mail: tfi@who.int