Although I think the supply-side progressive agenda is great (and have been involved in it in the past), I no longer prioritize it because I think that global poverty is more important. Most EAs are familiar with logarithmic utility of money, but this post by Toby Ord convinced me that the marginal utility of money likely diminishes faster than logarithmic utility.[1] So interventions to grow developed economies need to clear a very high bar to be more cost-effective than developing-world poverty reduction.
Promoting inclusive growth in rich countries has flow-through effects that might be enough to make it clear this bar, such as the ones you mentioned. For example:
Reducing poverty and inequality in rich countries might reduce their votersā appetite for populism, making it more likely that those countries will adopt pro-global poor policies like immigration and free trade.
Similarly, once the developed-world government enacts policies that take care of citizensā basic needs, those citizens might move up the hierarchy of needs to self-actualization, including global awareness and altruism.
Growth in rich countries could lead to more growth in poor countries, as those countries would trade with each other and trade volumes would increase.
Frontier growth in rich countries involves increasing innovation, which has positive externalities that flow through to poor countries. (For example, when the U.S. invests in clean energy innovation, clean energy becomes more affordable to India, Nigeria, etc.) Also, major technological breakthroughs create benefits that are not captured in GDP statistics.
Growth in rich countries increases their capacity to pay for public goods such as climate change mitigation, pandemic preparedness, and AGI safety, as well as subsidize the growth of poor countries. (Similarly, growth in rich countries gives EAs more disposable income, which they then spend on EA causes. š)
However, promoting growth in poor countries also has flow-through effects, which I donāt currently have the bandwidth to enumerate.
Letās say that the second-order effects of rich-world growth make it twice as cost-effective as it would otherwise be. Assuming that neglectedness and tractability are the same, it would still be at least 16x more cost-effective to reduce developing-world poverty.[2]
Specific causes that you mention might clear the bar for cost-effectiveness, like increasing immigration and clean energy innovation. Also, increasing housing supply would increase citiesā capacity to house immigrants and knowledge workers involved in high-impact innovation. What do you think?
For example, if Aliyaās income is $100 and Baojinās income is $1000, and they both have logarithmic utility, then giving a dollar to Aliya would be 10x as valuable as giving it to Baojin. But if they have isoelastic utility with constant elasticity Ī·=2, then giving it to Aliya is 102=100x more valuable. Empirical studies show that Ī· is likely somewhere between 1 and 2.
Per Toby Ordās essay, the US poverty line (about $6000/āperson) is about 33x higher than the incomes of typical GiveDirectly recipients (about $180/āperson).
What do you think of what I wrote in the post about the USA being like a low income country within a high income country when it comes to health and poverty? I think thereās value in making that not happen in high income countries , and it seems more tractable to me than developing a low income country because of the money is already there to do it
I think this statement needs to be more precise. The Quartz article you cite states that the US āhas the second-highest rate of poverty among rich countries (poverty here measured by the percentage of people earning less than half the national median income),ā but this poverty threshold is still much higher than the International Poverty Line (IPL) used by the World Bank ($1.90/āday), and in general, rich countries use higher poverty lines. 81% of those living in South Sudan (which is considered a least developed country) live below the IPL, whereas only 1% of Americans live below the IPL.
Also, Iām not an expert on this, but most poor people in rich countries have access to more infrastructure such as electricity and healthcare than poor people in poor countries, so their lives are qualitatively better in many ways even if itās not reflected in their incomes.
Poverty on Native American reservations is especially dire and seems comparable to the kind of extreme poverty we see in low- and middle-income countries. For example, Allen, South Dakota, on the Pine Ridge Reservation, has a per-capita income of $1,539 per year, or about $4.21 per day, which is between the $3.20 and $5.50/āday poverty lines often used in international development.
I think Iām convinced that getting low-income countries to develop into high-income countries is more important than the abundance agenda. OpenPhil has so much money that Iām pretty sure they should do both. As far as I know, they arenāt doing either. A country is not going to develop through malarial net donations.
I think maybe the impact of interventions in rich countries should be mainly measured in how much they improve their ability to help the rest of the world in a stable manner.
Although I think the supply-side progressive agenda is great (and have been involved in it in the past), I no longer prioritize it because I think that global poverty is more important. Most EAs are familiar with logarithmic utility of money, but this post by Toby Ord convinced me that the marginal utility of money likely diminishes faster than logarithmic utility.[1] So interventions to grow developed economies need to clear a very high bar to be more cost-effective than developing-world poverty reduction.
Promoting inclusive growth in rich countries has flow-through effects that might be enough to make it clear this bar, such as the ones you mentioned. For example:
Reducing poverty and inequality in rich countries might reduce their votersā appetite for populism, making it more likely that those countries will adopt pro-global poor policies like immigration and free trade.
Similarly, once the developed-world government enacts policies that take care of citizensā basic needs, those citizens might move up the hierarchy of needs to self-actualization, including global awareness and altruism.
Growth in rich countries could lead to more growth in poor countries, as those countries would trade with each other and trade volumes would increase.
Frontier growth in rich countries involves increasing innovation, which has positive externalities that flow through to poor countries. (For example, when the U.S. invests in clean energy innovation, clean energy becomes more affordable to India, Nigeria, etc.) Also, major technological breakthroughs create benefits that are not captured in GDP statistics.
Growth in rich countries increases their capacity to pay for public goods such as climate change mitigation, pandemic preparedness, and AGI safety, as well as subsidize the growth of poor countries. (Similarly, growth in rich countries gives EAs more disposable income, which they then spend on EA causes. š)
However, promoting growth in poor countries also has flow-through effects, which I donāt currently have the bandwidth to enumerate.
Letās say that the second-order effects of rich-world growth make it twice as cost-effective as it would otherwise be. Assuming that neglectedness and tractability are the same, it would still be at least 16x more cost-effective to reduce developing-world poverty.[2]
Specific causes that you mention might clear the bar for cost-effectiveness, like increasing immigration and clean energy innovation. Also, increasing housing supply would increase citiesā capacity to house immigrants and knowledge workers involved in high-impact innovation. What do you think?
For example, if Aliyaās income is $100 and Baojinās income is $1000, and they both have logarithmic utility, then giving a dollar to Aliya would be 10x as valuable as giving it to Baojin. But if they have isoelastic utility with constant elasticity Ī·=2, then giving it to Aliya is 102=100x more valuable. Empirical studies show that Ī· is likely somewhere between 1 and 2.
Per Toby Ordās essay, the US poverty line (about $6000/āperson) is about 33x higher than the incomes of typical GiveDirectly recipients (about $180/āperson).
What do you think of what I wrote in the post about the USA being like a low income country within a high income country when it comes to health and poverty? I think thereās value in making that not happen in high income countries , and it seems more tractable to me than developing a low income country because of the money is already there to do it
I think this statement needs to be more precise. The Quartz article you cite states that the US āhas the second-highest rate of poverty among rich countries (poverty here measured by the percentage of people earning less than half the national median income),ā but this poverty threshold is still much higher than the International Poverty Line (IPL) used by the World Bank ($1.90/āday), and in general, rich countries use higher poverty lines. 81% of those living in South Sudan (which is considered a least developed country) live below the IPL, whereas only 1% of Americans live below the IPL.
Also, Iām not an expert on this, but most poor people in rich countries have access to more infrastructure such as electricity and healthcare than poor people in poor countries, so their lives are qualitatively better in many ways even if itās not reflected in their incomes.
Poverty on Native American reservations is especially dire and seems comparable to the kind of extreme poverty we see in low- and middle-income countries. For example, Allen, South Dakota, on the Pine Ridge Reservation, has a per-capita income of $1,539 per year, or about $4.21 per day, which is between the $3.20 and $5.50/āday poverty lines often used in international development.
I think Iām convinced that getting low-income countries to develop into high-income countries is more important than the abundance agenda. OpenPhil has so much money that Iām pretty sure they should do both. As far as I know, they arenāt doing either. A country is not going to develop through malarial net donations.
the only organizations I know that are trying to get low-income countries to become high-income countries are the World Bank, IMF, and Growth Teams
What about the Center for Global Development and Charter Cities Institute?
I think maybe the impact of interventions in rich countries should be mainly measured in how much they improve their ability to help the rest of the world in a stable manner.