One advantage of centralized grantmaking though is that it can convey more information, due to the experience of the grantmakers. In particular, centralized decision-making allows for better comparisons between proposals. This can lead to only the most effective projects being carried out, as it would be the case with startups if one were to restrict himself to only top venture capitalists.
Do you have any evidence for this? There’s definitely evidence to suggest that decentralized decision making can outperform centralized decision making; for example, prediction markets and crowdsourcing. I think it’s dangerous to automatically assume that all centralized thinking and institutions are better than decentralized thinking and institutions.
I recall reading that top VC’s are able to outperform the startup investing market, although it may have a causal relationship going the other way around. That being said, the very fact that superforecasters are able to outperform prediction markets should signal that there are (small groups of) people able to outperform the average, isn’t it?
On the other hand prediction markets are useful, I’m just wondering how much of a feedback signal there is for altruistic donations, and if it is sufficient for some level of efficiency.
I recall reading that top VC’s are able to outperform the startup investing market, although it may have a causal relationship going the other way around.
Yep, there’s definitely return persistence with top VCs, and the last time I checked I recall there was uncertainty around whether that was due to enhanced deal flow or actual better judgement.
That being said, the very fact that superforecasters are able to outperform prediction markets should signal that there are (small groups of) people able to outperform the average, isn’t it?
I think that just taking the average is one decentralized approach, but certainly not representative of decentralized decision making systems and approaches as a whole.
Even the Good Judgement Project can be considered a decentralized system to identify good grantmakers. Identifying superforecasters requires having everyone do predictions and then find the best forecasters among them, whereas I do not believe the route to become a funder/​grantmaker is that democratized. For example, there’s currently no way to measure what various people think of a grant proposal, fund that regardless of what occurs (there can be rules about not funding downside risk stuff, of course), and then look back and see who was actually accurate.
There haven’t actually been real prediction markets implemented at a large scale (Kalshi aside, which is very new), so it’s not clear whether that’s true. Denise quotes Tetlock mentioning that objection here.
I also think that determining what to fund requires certain values and preferences, not necessarily assessing what’s successful. So viewpoint diversity would be valuable. For example, before longtermism became mainstream in EA, it would have been better to allocate some fraction of funding towards that viewpoint, and likewise with other viewpoints that exist today. A test of who makes grants to successful individuals doesn’t protect against funding the wrong aims altogether, or certain theories of change that turn out to not be that impactful. Centralized funding isn’t representative of the diversity of community views and theories of change by default (I don’t see funding orgs allocating some fraction of funding towards novel theories of change as a policy).
So viewpoint diversity would be valuable.
Definitely. In particular, this is valuable when the community also pivots around cause neutrality. So I think it would be good to have people with different opinions on what cause areas are better to support.
One advantage of centralized grantmaking though is that it can convey more information, due to the experience of the grantmakers. In particular, centralized decision-making allows for better comparisons between proposals. This can lead to only the most effective projects being carried out, as it would be the case with startups if one were to restrict himself to only top venture capitalists.
Do you have any evidence for this? There’s definitely evidence to suggest that decentralized decision making can outperform centralized decision making; for example, prediction markets and crowdsourcing. I think it’s dangerous to automatically assume that all centralized thinking and institutions are better than decentralized thinking and institutions.
I recall reading that top VC’s are able to outperform the startup investing market, although it may have a causal relationship going the other way around. That being said, the very fact that superforecasters are able to outperform prediction markets should signal that there are (small groups of) people able to outperform the average, isn’t it?
On the other hand prediction markets are useful, I’m just wondering how much of a feedback signal there is for altruistic donations, and if it is sufficient for some level of efficiency.
Yep, there’s definitely return persistence with top VCs, and the last time I checked I recall there was uncertainty around whether that was due to enhanced deal flow or actual better judgement.
I think that just taking the average is one decentralized approach, but certainly not representative of decentralized decision making systems and approaches as a whole.
Even the Good Judgement Project can be considered a decentralized system to identify good grantmakers. Identifying superforecasters requires having everyone do predictions and then find the best forecasters among them, whereas I do not believe the route to become a funder/​grantmaker is that democratized. For example, there’s currently no way to measure what various people think of a grant proposal, fund that regardless of what occurs (there can be rules about not funding downside risk stuff, of course), and then look back and see who was actually accurate.
There haven’t actually been real prediction markets implemented at a large scale (Kalshi aside, which is very new), so it’s not clear whether that’s true. Denise quotes Tetlock mentioning that objection here.
I also think that determining what to fund requires certain values and preferences, not necessarily assessing what’s successful. So viewpoint diversity would be valuable. For example, before longtermism became mainstream in EA, it would have been better to allocate some fraction of funding towards that viewpoint, and likewise with other viewpoints that exist today. A test of who makes grants to successful individuals doesn’t protect against funding the wrong aims altogether, or certain theories of change that turn out to not be that impactful. Centralized funding isn’t representative of the diversity of community views and theories of change by default (I don’t see funding orgs allocating some fraction of funding towards novel theories of change as a policy).