South-Western College Publishing - Economics  
Turkish Treasures Delight Archaeologists
Subject Positive externalities
Topic Market Failure, Regulation, and Public Choice
Key Words Dam project, employment, cultural treasures, economic development
News Story

In southern Turkey on the banks of the Euphrates River lies a small town called Belkis. A local dam project is nearing completion. Soon the dam will be completely filled, bringing electricity, irrigation and employment to the community.

However, in the construction zone archaeologists have recently discovered the remains of hundreds of richly decorated villas that formed part of the ancient city of Zeugma-Apamea, an affluent outpost of the Roman Empire. They have found a three-foot bronze statue of Mars, twelve floors of mosaics, and an archive of 65,000 Roman seals used for binding documents.

The excavation will not be completed when the dam is filled. Many Westerners are critical of Turkey's attitude toward cultural treasures. However, Turkey sees the dam as vital to economic development and says that it would cost $30 million to halt the fill.

Perhaps the lessons of the Aswan Dam project in Egypt could be heeded. When two temples built by Ramses II at Abu Simbel were threatened, an international consortium led by Unesco moved them to higher ground.

(Updated July 1, 2000)

1. Draw a diagram of the market for cultural treasures in Turkey. Show the marginal private cost and the marginal private benefit curves. Mark the private equilibrium price and quantity.
  a) Why is the marginal private cost curve so high in the case of Turkey? (Think about the opportunity costs of excavating cultural treasures.)
  b) Why is the marginal private benefit curve so low?
  c) What do (a) and (b) imply for the amount of cultural treasures that Turkey wants to preserve?
2. Many people outside Turkey are anxious that the site at Belkis be fully excavated because they value the cultural treasures very highly.
  a) Is the marginal social benefit greater or less than the marginal private benefit? Explain your answer.
  b) Draw the marginal social benefit curve on your diagram. What is the socially optimal level of cultural treasures? How does it compare to the private optimal level?
  c) Shade in the area representing deadweight loss. What does it imply?
3. The final question raised by the news story is how to mediate the concerns of the Turkish people and the archaeologists and others who value cultural treasures highly.
  a) Would an economist advise that the excavation should continue until all the treasures had been found? Explain.
  b) How would an economist induce the Turkish government to permit a socially optimal amount of cultural treasures before filling the dam? Refer to your diagram.
Source "Before the Deluge," The Wall Street Journal, May 19, 2000.

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