Owen Abroad and Chris Blattman both have recent posts responding to overlapping sets of questions about development posed by a journalist writing a series of articles on development. The questions are really broad – I’d say they’re really The Questions in development research – but Chris and Owen provide concrete and well-reasoned answers and both their posts are worth reading. Owen also got a bunch of other great answers in his comment section.
Despite my lofty status as a second-year Ph.D. student I was not contacted for my take on these questions. But I’ve never let not being asked keep me from volunteering an opinion before, and I’m not going to start now. I’m hoping ML’s other contributors will chime in with their own responses or at least criticize mine.
1. It is realistic to think that poverty can one day end?
Yes, without a doubt.We’ve made considerable progress toward that goal already – look at the massive improvements that have happened recently in China, across Eastern Asia, and increasingly in India. I see nothing to indicate that we can’t reach a point where everybody has at least the standard of living of the global middle class. It’s natural to fear that poverty is a zero-sum game, but the rise of living standards in places like South Korea has helped other people around the world, not hurt them.
Both Chris and Owen make concessions toward a relative definition of poverty, rather than an absolute one. They’re correct that relative poverty is always going to exist: random variation, be it genetic, environmental, or otherwise, means some people will be better off than others no matter how high incomes become. But I’m not willing to admit that relative inequality constitutes something we should call poverty. Absolute income deprivation is causally linked to all kinds of bad stuff, from the incidence of civil wars to malnutrition and low life expectancy. As I’ve already discussed with Andrew on this blog, I’m not convinced that inequality makes any difference at all.
I think a numerical example might be helpful here. Imagine that in Society A there are only two people: myself (living on a $20,000/year annual stipend) and an average Malawian (living off $800/year at purchasing power parity, or 1/25th what I do). Now Imagine Society B contains just myself and Bill Gates, who earns roughly $200 million/year, which is 10,000 times my income. By any reasonable measure of inequality Society B is more unequal than Society A – but which is more concerning? Bill Gates’ living standard is much closer to mine than mine is to a typical Malawian’s. I worry a lot more about helping the billions of people living on just a few dollars a day than I do about the fact that Bill Gates could, in principle, buy millions of BMWs to drive around when I can’t even afford one. I think it’s counterproductive to talk about poverty as a relative concept: it means the goalposts are always shifting and can confound our attempts to
2. What are the best global solutions?
Blattman points out that industry is really the difference between rich and poor nations and doubts that de-worming can really be transformative, but openly admits that we’re not sure how exactly industry develops in a poor country. I would argue that health interventions can be transformative – if you take Bleakley’s hookworm paper seriously, the implication is that Rockefeller’s campaign to eradicate that parasite was directly responsible for big income gains in the American South. Eppig’s work on disease burden and IQ points toward the same possibility: fix disease and you’ll boost economic development. My undergraduate advisor, Roger Noll, oversimplified it beautifully, saying “we know the solution to economic development. It’s 19th-century public health.” That’s not the only thing but I do think truly solid public health – clean water and malaria eradication in particular – would go a long way toward spurring industrialization where it is lagging. Deworm the World is an excellent start.
|Exposure to disease leads to lower IQ – and worse economic outcomes|
The other big solution I’d push was one mentioned by Barder: migration. Immigration is the single most powerful development tool we have. A Haitian can octuple her income by moving to the US. People can increase their incomes drastically by moving to a developed country and when they do they tend to send remittances back to help their families. Opposition to immigration runs deep; almost by its nature it is driven by a nationalism that values foreigners less than one’s countrymen. But policymakers have a lot of wiggle room to let in more immigrants, and they should use all of it.
3. How urgent is it to act?
Very urgent. No matter what your policy goal, tackling poverty is the best solution in the long run and we need to start now. To take my favorite example, rising incomes lead to falling family sizes, and this effect is already forecast to put a stop to global overpopulation. Or another: carbon intensity is a falling function of per-person income. We’re not going to stop global warming without increasing incomes. These effects will only kick in over the very long run so we need to start now.
At the same time, urgency frequently gets in the way of clear reasoning when it comes to doing good in the world. It’s the role of development economists to say “not so fast” and point out what doesn’t work and what we don’t know, and hopefully to impart healthy skepticism to other people involved in development.We need to move quickly, but first to gain knowledge and only second to act.
4. Do you believe there is hope for the future?
Of course. Otherwise I wouldn’t be trying. But the more I learn, the more I see that no problem in development has a simple solution