Thank you for your questions. I do write about neglectedness elsewher
1: I’d like to push a bit on the neglectedness argument. Let’s say we want to donate to advocacy groups for policies we feel confident are effective. I believe that there is quite some tension between the degree of certainty that some policy is effective, and its neglectedness. In other words, the policies where we can feel most confident they are effective might already have so much funding and attention that each additional donor or career might have much less marginal benefit. Conversely, the strategies that are most neglected might also carry more uncertainty, as they have been less critically vetted by a large diversity of economists. What are your thoughts on this?
This is an excellent point—you highlight a very interesting dynamic. Basically, the reason why RD is called sometimes called neglected (i.e. “neglected tropical diseases”, “global poverty is neglected”) is not necessarily due a low amount of money going to the cause in absolute terms, but because the problem is so huge. For instance, transnational wealth transfers through cash transfers can absorb virtually infinite amounts of donor money at not very rapidly diminishing returns. When these funding gaps are very hard to fill even for mega donors (e.g. billionaires and sovereigns), then that’s a good reason for them to be more neglected than say research and advocacy for economic growth. The entire economics profession at $6bn a year that we guesstimated above could be roughly bankrolled indefinitely by the wealth of the Gates foundation.
However, given that there’s still a lot of very suboptimal economic policy (e.g. see Venezuela or how poorly some countries do in absolute on the World Bank Doing Business indicators) and very little growth advocacy for and there are like still many unfunded opportunities. Btw—my intuition is that similar arguments can be made about other research (e.g. agricultural research) that would benefit emerging economies.
I write more in the appendix under the heading “Growth is not as neglected as RD, its low-hanging fruit have been picked, and the marginal dollar is not as effective”
2: more generally, can you outline in what way current incentive structures in the economics field and other institutions might cause sub-optimal policies to be advocated in a way that effective altruists (through being effective altruists) can mitigate?
Great question: General EA heuristics might be at play here: people are less likely to care for people far removed from them and thus less likely to give to International development think tanks that advocate for them. This domestic bias manifests in suboptimal allocation of research effort—fewer PhDs becoming development economists relative to its effectiveness (100x multiplier) vs. people who become advanced economy labor economists (e.g. studying the effect of minimum wage on employment.
I think generally the world might spend too little on R&D (~1.7%) in general relative to the ~100 trillion in GDP.
I highlight a few more biases in the appendices under the heading (Appendix 5. Biases against growth/for RD ).
3: Daron Acemoglu argues that the main obstacle to economic development in developing countries are institutions that are not conducive to growth, by being extractive, i.e. having excessively concentrated power which among other things slows down innovation. This seems to be something more difficult to address for Westerners. Relatedly, countries with insufficiently inclusive political institutions may grow but without such institutions are unlikely to improve the welfare of the poorest.
Yes, you’re raising a great point here. However, there are some attempts to use ODA to strengthen non-extractive institutions. Better and more transparent tax collection might one thing that also falls under economic policy advice. Another example is the Budget Strengthening Initiative
“In Uganda, a government website allows the public to find out both what the Ugandan government plans – and actually does – in districts around the country. A toll-free number lets concerned citizens complain directly with the government if they spot any wrongdoing. The initiative also trains journalists in making the most effective use of the data available.”
Research and software for things like that scale and imho would be aid better spent than direct funding of randomista interventions.
4: “However, no one can reliably and rigorously demonstrate exactly which actions best promote development (…) This should lead us to be sceptical about RD.” You could also argue for the opposite conclusion. Since we cannot reliably know which actions promote development, RD can at least help us alleviate suffering of those who are poor today.
This is precisely the point of the contention that the Randomista camp with Duflo et al. has with the Growth camp with Pritchett et al.
I write more about this in the appendix under the heading “The field of “Growth diagnostics”” and “Quotes from Duflo and Banerjee”.
I happen to agree with the Pritchett et al. camp and think the Nobel prize winners are wrong on this, which of course is a strong claim.
As we argue in the piece, the value of information of getting to the bottom of who is right here is likely very high.
Thank you for your questions. I do write about neglectedness elsewher
This is an excellent point—you highlight a very interesting dynamic. Basically, the reason why RD is called sometimes called neglected (i.e. “neglected tropical diseases”, “global poverty is neglected”) is not necessarily due a low amount of money going to the cause in absolute terms, but because the problem is so huge. For instance, transnational wealth transfers through cash transfers can absorb virtually infinite amounts of donor money at not very rapidly diminishing returns. When these funding gaps are very hard to fill even for mega donors (e.g. billionaires and sovereigns), then that’s a good reason for them to be more neglected than say research and advocacy for economic growth. The entire economics profession at $6bn a year that we guesstimated above could be roughly bankrolled indefinitely by the wealth of the Gates foundation.
However, given that there’s still a lot of very suboptimal economic policy (e.g. see Venezuela or how poorly some countries do in absolute on the World Bank Doing Business indicators) and very little growth advocacy for and there are like still many unfunded opportunities. Btw—my intuition is that similar arguments can be made about other research (e.g. agricultural research) that would benefit emerging economies.
I write more in the appendix under the heading “Growth is not as neglected as RD, its low-hanging fruit have been picked, and the marginal dollar is not as effective”
Great question: General EA heuristics might be at play here: people are less likely to care for people far removed from them and thus less likely to give to International development think tanks that advocate for them. This domestic bias manifests in suboptimal allocation of research effort—fewer PhDs becoming development economists relative to its effectiveness (100x multiplier) vs. people who become advanced economy labor economists (e.g. studying the effect of minimum wage on employment.
I think generally the world might spend too little on R&D (~1.7%) in general relative to the ~100 trillion in GDP.
I highlight a few more biases in the appendices under the heading (Appendix 5. Biases against growth/for RD ).
Yes, you’re raising a great point here. However, there are some attempts to use ODA to strengthen non-extractive institutions. Better and more transparent tax collection might one thing that also falls under economic policy advice. Another example is the Budget Strengthening Initiative
see
https://www.odi.org/blogs/9847-why-uganda-more-transparent-norway
“In Uganda, a government website allows the public to find out both what the Ugandan government plans – and actually does – in districts around the country. A toll-free number lets concerned citizens complain directly with the government if they spot any wrongdoing. The initiative also trains journalists in making the most effective use of the data available.”
Research and software for things like that scale and imho would be aid better spent than direct funding of randomista interventions.
This is precisely the point of the contention that the Randomista camp with Duflo et al. has with the Growth camp with Pritchett et al.
I write more about this in the appendix under the heading “The field of “Growth diagnostics”” and “Quotes from Duflo and Banerjee”.
I happen to agree with the Pritchett et al. camp and think the Nobel prize winners are wrong on this, which of course is a strong claim.
As we argue in the piece, the value of information of getting to the bottom of who is right here is likely very high.