Co-Founder of Lets-Fund.org
I have a section in the appendices “Quotes from Duflo and Banerjee” with more quotes from them from their latest book.
“Economists (and other experts) seem to have very little useful to say about why some countries grow and others do not.
We actually cite Pritchett above directly replying to this quote:
“The Venezuelan economy is not in 2018 spiraling into hyperinflation and in the midst of a tragic economic depression because “economists have little useful to say about economic growth” in the sense the advice, if followed, would be useful.”
Whole paper is worth a read:
Given that economic growth requires manpower and brainpower, it seems plausible, however, that whenever that spark occurs, it is more likely to catch fire if women and men are properly educated, well fed, and healthy, and if citizens feel secure and confident enough to invest in their children, and to let them leave home to get the new jobs in the city.
From our piece above: Admittedly, GDP and health are strongly correlated. Healthier people can work harder and learn more in school and so one might expect better health to cause growth. However, the evidence for health causing growth is weak and the effect is small:
“If improving health leads to growth, this would be a reason, beyond the welfare gain from better health itself, that governments might want to make such investments. However, the evidence for such an effect of health on growth is relatively weak. Cross-country empirical analyses that find large effects for this causal channel tend to have serious identification problems. The few studies that use better identification find small or even negative effects. Theoretical and empirical analyses of the individual causal channels by which health should raise growth find positive effects, but again these tend to be fairly small. Putting the different channels together into a simulation model shows that potential growth effects of better health are only modest, and arrive with a significant delay.” “Health and Economic Growth—CDN.” Health and Economic Growth. Accessed 20 Nov. 2018.
(Though there is some disagreement in the literature—for instance, “targeted interventions to improve the health conditions of women and children, such as iodine supplementation or vaccination against human papilloma virus, are likely to yield very high returns in terms of economic growth, well-being, and long-run development.)”)
earned 20 percent more as adults every year, meaning $3,269 USD PPP over a lifetime. The effect might be lower if deworming became universal: The children lucky enough to have been dewormed may have been in part taking the jobs of others.
But to scale this number, note that Kenya’s highest sustained per capita growth rate in modern memory was about 4.5 percent in 2006–2008.
If we could press a macroeconomic policy lever that could make that kind of unprecedented growth happen again, it would still take four years to raise average incomes by the same 20 percent. And, as it turns out, no one has such a lever.”
1. Indeed, it is crucial that there’s no general equilibrium theory of deworming and we don’t know whether these effects scale to the whole population as well as growth does. 2. Of course, the literature on this is hotly debated (c.f. worm wars). Perhaps some targeted effective investments in health might cause growth or otherwise have outsized effects on welfare.
Our best bet is the literature on the “fetal origins hypothesis” and child development, where early environment affects cognitive development and later life outcomes. Some of the effect sizes are downright incredible and its implications might be big (if true). For example, salt iodization is cheap and might improve (population-level) cognitive development and IQ. , Other examples are pollution, nutrition, disease, weather, smoking, alcohol etc.
A counterpoint though is that because growth causes population health, and income has also been shown to improve birth weight, test scores etc, growth might still dominate this.
3. Increasing growth benefits almost everyone in the economy and improving policies such as trade policies reach users with ‘zero marginal cost’. In other words, a think tank advocating for lower tariffs for Nigeria to EU markets provides a public good for all 190 million Nigerians. Adding another Nigerian due to population growth is increasing this intervention effectiveness at zero marginal cost.
Greg Lewis writes about this in his excellent post: “Beware of surprising and suspicious convergence”:
Imagine this:Oliver: … Thus we see that donating to the opera is the best way of promoting the arts.Eleanor: Okay, but I’m principally interested in improving human welfare.Oliver: Oh! Well I think it is also the case that donating to the opera is best for improving human welfare too.Generally, what is best for one thing is usually not the best for something else, and thus Oliver’s claim that donations to opera are best for the arts and human welfare is surprising. We may suspect bias: that Oliver’s claim that the Opera is best for the human welfare is primarily motivated by his enthusiasm for opera and desire to find reasons in favour, rather than a cooler, more objective search for what is really best for human welfare.[...]
Oliver: … Thus we see that donating to the opera is the best way of promoting the arts.
Eleanor: Okay, but I’m principally interested in improving human welfare.
Oliver: Oh! Well I think it is also the case that donating to the opera is best for improving human welfare too.
Generally, what is best for one thing is usually not the best for something else, and thus Oliver’s claim that donations to opera are best for the arts and human welfare is surprising. We may suspect bias: that Oliver’s claim that the Opera is best for the human welfare is primarily motivated by his enthusiasm for opera and desire to find reasons in favour, rather than a cooler, more objective search for what is really best for human welfare.
The claim that, even granting the overwhelming importance of the far future, it turns out that global poverty charities are still the best to give to, given their robust benefits, positive flow through effects, and the speculativeness of far future causes.
I’m sorry if I’m being ignorant because I haven’t followed C-19 very closely recently, but can you point out what you take offense with?
https://www.effektiv-spenden.org/ offers SEPA, but there’s no English site yet.
Really interesting and informative—thanks for writing this!
On midterm safety: I think this is underexplored and not discussed enough here.
I have been thinking that generating more examples of how midterm safety risks could be catastrophic might be helpful (e.g. fusion power is apparently bottlenecked by computing power and algorithmic advances). Btw I thought this video by Stuart Armstrong on specification gaming was really good for skeptical specialists.
Also, I feel like more writing on midterm safety could be combined with Greg Lewis’ post on GCRs importance from a person affecting view because that significantly relaxes assumptions about the importance of AI safety that might seem alien to skeptics.
Relevant EA forum post: “Ethical offsetting is antithetical to EA”
I don’t have a great answer, but I have a brain/link dump Google doc on this topic that might be of interest.
My brain dump “Potential priority areas within cognitive sciences (psychology, neuroscience, and philosophy of mind)”
Feel free to contribute by making suggested edits!
Excellent post—really enjoyed reading it.
My intuition used to be that continental European political careers were generally maybe not the best career option for people interested in effective altruism, but now with the EU and especially Berlin and Paris becoming less insular, more important with more international influence (Brussels effect, G-Zero world etc.), I’m more inclined to think it’s perhaps the competitive advantage for people from those countries with the right personal fit.
(I think you could tell readers that there’s a german version further down, I read the English version until I realized that there was a German one oops).
This is a excellent point, I agree. You’re absolutely right that they could argue that and that reputational risks should be considered before such a strategy is adopted. And even though it is perfectly legal to lobby for your own positions / stock, lobbying for shorts is usually more morally laden in the eyes of the public (there is in fact evidence that people react very strongly to this).
However, I think if someone were to mount the criticism of having ulterior motives, then there is a counterargument to show that this criticism is ultimately misguided:
If the market is efficient, then the valuation of an industry will have risks that could be created easily through lobbying priced in. In other words, if the high valuation of Big Tobacco were dependent on someone not doing a relatively cheap lobbying campaign for tobacco taxes, then shorting it would make sense for socially neutral investors with no altruistic motives—and thus is should already be done.
Thus, this strategy would only work for truly altruistic agent who will ultimately lose money in the process, but only get a discount on their philanthropic investment. In other words, the investment in the lobbying should likely be higher than the profit from the short. And so, it would be invalid to say that someone using this strategy would have ulterior motives. But yes again, I take your point that this subtle point might get lost and it will end up being a PR disaster.
Yes, this is a general strategy for a philanthropists who wants to recoup some of their philanthropic investment:
1. Short harmful industry/company X (e.g. tobacco/Philip Morris, meat / Tyson)
2. Then lobby against this industry (e.g. fund a think tank that lobbies for tobacco taxes in a market that the company is very exposed to).
3. Profit from the short to get a discount on your philanthropic investment.
Contrary to what many people intuit, this is perfectly legal in many jurisdictions (this is not legal or investment advice though).
My interpretation of this was promoting robustly good values (e.g. violence is bad) at scale as an effective intervention.
For instance, these are values that the UK government tries to promote:
“Champion democracy, human rights and the rule of law, and address global challenges, including through campaigns on preventing sexual violence in conflict, reducing modern slavery and promoting female education. Promote human and environmental security through London Illegal Wildlife Trade Conference. Deepen relationships between states and people, including through the Commonwealth Summit.”
Also see a recent paper finding no evidence for the automation hypothesis:
Gwern.net articles with an importance score of 9 or 10
1. Could analytics be displayed on the forum? I think it’d be interesting to people to see how many people read different posts. This is also related to the question re: the forum prize—I reckon many authors would be more motivated by seeing that their posts are widely read than by a cash prize.
2. I often see very long posts that jump right into the introduction without summary. Could one introduce a field that is mandatory if a posts is more than 300 words long that forces the author to provide a 200 characters (or so) summary? Or something like this:
could even be added by the mods.
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.
You raise some excellent points that have a bunch of implications for estimating the value of EA funding policy research.
How confident are you that the funds are actually fully used for the purpose?
I’m very confident that the funds are used for their Clean Energy Innovation program.
We have a mutual agreement of understanding with ITIF that any donations through Let’s Fund will be restricted to the Clean Energy Innovation Program, led by Professor David Hart and Dr Colin Cunliff.
We’re in regular contact with their fundraising person and the David Hart.
They have recently hired an additional person and are now also hiring for another policy analyst in Brussels. We think this is very likely in part due to the Let’s Fund grant.
how confident are you that they will not reduce their discretionary spending to this program as a consequence?
I think this is plausible but fairly unlikely that the effect is massive—I think think tank programs at think tanks such as ITIF do not tend to top up their programs with discretionary spending much, but there is a bit of “market” where the person who leads the program needs to acquire grant funding. The better the program is at receiving grant funding the more it’ll be scaled up. Otherwise, there’d be no incentive for people running the individual programs to apply for grants.
However, of course additional funds, even if restricted to a program will likely be good for ITIF as a whole, because it benefits from the economies of scale and more basic infrastructure (e.g. support staff, a bigger office, communications staff).
> they have some pieces that are fairly confrontational towards China
Yes, so as argued above, I think donations through Let’s Fund will predominantly benefit their Clean Energy program, but a small effect on the whole ITIFs activities can’t be ruled out.
ITIF works on other issues and I haven’t vetted their value in-depth, but my superficial review of ITIFs overall activities leads me to believe that none of their activities are very controversial. This is in part why we selected ITIF.
ITIF is a think tank based in Washington, DC. The Global Go To Think Tank Index has ranked ITIF 1st in their “Science and Technology think tanks“ category in 2017 and 2018.
They also rank quite well on the general rankings.
It’s a very academic think tank with lots of their staff members holding advanced degrees and having policy experience in technocratic environments. I think they can still be described as quite centrist and nonpartisan, though ITIFs staff seems closer to the US Democrats than other parties. Also, it is fairly libertarian in terms of economic thinking.
More about ITIF here: https://itif.org/about
On their China stance in particular: I think they mostly argue against some of China’s economic policies in a constructive not confrontational way (see everything about China here: https://itif.org/regions/china ). You could see the sign of the value of that going either way—it might be that more constructive criticism is better than not talking about it and then having populists being the only ones who talk about some of China’s anti-competitive practices.
This is all very uncertain however. People who are very worried about unintentional consequences might not want to donate to ITIF for those reasons.
Did you consider the Clean Air Task Force when looking for giving opportunities?
Yes, I read the FP report on it. I think the Clean Air Task force is an excellent giving opportunity in climate change. The main reason why I think ITIF has higher expected value is that ITIF is more narrowly focused on increasing clean energy R&D spending, which I make the case is the best policy to push currently on the margin. However, it is perhaps more risky than the Clean Air Task Force, which is more diversified.
You can quickly check what others are thinking about the articles you read online through a “bookmarklet”: just one click on the bookmark in your browser takes you right to the Twitter response of any article.
In chrome you can create this by going to:chrome://bookmarks/
“Add new bookmark”Bookmark name:Twitter response
Interesting stats on police violence in the UK:
Might suggest that the benefits of protesting in the UK and elsewhere outweigh the costs of virus spread especially given the differential state of the pandemic.