On Wednesday night I gave a lecture at LSE called “We Don’t Know How to Solve Global Poverty and That’s a Good Thing.”
The abstract I wrote beforehand was:
This lecture argues that occasions when development economists were more certain about ‘the solution to global poverty’ have often led to harmful consequences for the world’s poor in the long-run. Sceptical criticism is a creative force that redirects attention and effort away from centrally-directed expert solutions towards effective decentralised problem-solving.
Here are some responses: how economists don’t understand link between poverty and growth, a criticism of my claims to ignorance, and a bit more sympathetic summary.
I feel kind of like I am on a long personal intellectual journey trying to figure out how to reconcile my compassion for the world’s poor with my painfully honest realization that there is no reliable evidence on exactly what to do to end poverty. Each new public lecture is trying out a solution to the conundrum on a smart audience, and then they educate me some more to take the next step (which will be tried in the next lecture).
I am trying to convince people that rigorous skepticism is a creative force because most of the damage is done by overconfident people who thought they knew the answer when they didn’t. And such skepticism doesn’t leave us empty-handed: it forces us back on what are our core values: democracy, human rights, individual liberties, that we follow for moral rather than pragmatic reasons. Autocratic “pragmatic” claims to deliver development if you will just give up your rights don’t survive skeptical scrutiny.
One thing I learned from the LSE lecture is not to even bother trying to make any “pragmatic” case for democracy, because that evidence is just as weak as everything else, and that we can only choose democracy based on our values (which is also how historically it was chosen; there are no cases of societies choosing democracy based on econometric results).



19 Comments
Thank you for much for this post and for this always interesting blog.
Unfortunately , I was not able to attend the lecture (similarly to many readers of this blog…) I understand that you did not give permission to publish your lecture on the LSE website as a podcast – may I kindly ask why?
Once again, thank you for the illuminating insights.
I am also taking classes at LSE via the external system; quite a change from a generation back, since today via the global communications network one can listen to any number of world class experts in any field. the LSE public lecture website is:
http://www2.lse.ac.uk/newsAndMedia/videoAndAudio/publicEventsVideos/publicEventsVideosPrevious.aspx
What we call democracy does seem to be the result of many other factors already in place and as you said, only some of them are economic. Even the voting process becomes dangerous and mind boggling when resources are not utilized by at least a reasonable percentage of any population.
Dear LSE Student:
Partly for the reasons in this post, I am very old fashioned about lectures. I really believe that a lecture should be face to face because it is an interaction between the lecturer and the audience.
I am very sorry you couldn’t get in — I would have let you in if it had been up to me!
@Easterly
I have listened to a number of the LSE lectures and have enjoyed them immensely. True, it is not the same as being there in person without the opportunity to interact – but those people present do ask questions and usually cover issues I might have asked anyway.
It is not perfect, but it is far better than reading books or participating on a web site such as yours. Why? The body language and verbal nuances.
Hi Bill – as a development professional based in London but with a baby, attending lectures a joy I’ve had to forfeit, but podcasts (LSE, Global Prosperity Wonkcast, Development Drums, etc.) have been a great substitute during commutes! I’m disappointed you’re not allowing the podcast to be put up – I was looking forward to being challenged as usual by your insights. Any chance you can reconsider?
Dear Prof. Easterly,
many of us LSE students are used to watching the public lectures on our computers. In my case I was out of the country on the occasion and I`m disapointed that you did not authorize LSE to publish it. Rodrik, Krugman, Stiglitz, Sachs, Moyo all came to LSE in the past months and are all there on the website. I echo many of your fans here, any chance you can reconsider?
I learned a long time ago to always make sure there was a good skeptic on my team. I’m naturally enthusiastic and optimistic, but as you say ‘damage is done by overconfident people who thought they knew the answer when they didn’t’.
I still balk at the painfully negative way in which many skeptics communicate, and am more inclined myself towards a good healthy dose of humble curiosity.
Humility (which avoids the overconfidence) and curiosity (which assumes that there are answers and factors that we don’t know about yet) might do the same work as your skeptical criticism, but with less intellectual arrogance. Because the confidence of a true skeptic that nothing will work until proven otherwise (according to his or her often narrowly defined idea of what constitutes evidence) also does damage.
Maybe what I’m looking for is a truly creative form of skeptism, one that embraces as much humility and curiosity as we are asking the enthusiasts to embrace. Then I suspect real innovation could flourish.
Dear Professor Easterly :
Thank you for replying. You stated your belief that “a lecture should be face to face because it is an interaction between the lecturer and the audience”
I hope this is not rude but It seems to me somewhat odd that the idea of face-to-face interaction, (in a lecture theater full on hundreds of students) is what guides your decision not to publish the lecture. Furthermore, following the content of this blog for a while I can recall few posts that had links to panels or talks you gave.
The thoughts, ideas and content remain yours. Not many world-known academics operate a fascinating blog such as this one.
It would be great if you allow readers from around the world to listen to the lecture, rather than limiting access to fortunate LSE students.
it is refreshing to hear that you also struggle with the conundrum of genuinely wanting to Do Something but not knowing exactly what To Do.
i don’t think it takes a skeptic to acknowledge that we don’t really know what to do to make a signficiant impact on global poverty, but it is important for us to carefully analyse each step we take in the direction we think is taking us there, something that sometimes seems to be missing from the development and humanitarian circles. as some of the other commenters have mentioned, having an online community of people with similar professional constraints, personal doubts, and philosophical dilemmas allows those of us who do want to see the field of international development improve is reassuring and will hopefully lead to improvements in aid delivery.
Sources of growth are reasonably well understood. The Doing Business indicators collected by the World Bank Group provide a fairly robust analysis of how countries can grow and reduce poverty.
A May 7 article in the Wall Street Journal sought to explain the current Greek economic tragedy in terms of Greece’s performance against the private sector development criteria measured by the International Finance Corporation. http://online.wsj.com/article/SB10001424052748703961104575226651125226596.html
The real mystery is the fixation of charities on working directly with the poor, and their resolute indifference to the evidence that improving the business environment enables poor people to grow richer by their own efforts.
Democracy does not produce growth except where it serves as a proxy for transparency and accountability. Where crooked politicians steal or buy elections, or where propaganda convinces a majority to be hostile to investment, democracy can reinforce stagnation.
@Robert Tulip: I’m sorry, but unless your definition of “reasonable” is much different than mine, I do not agree with you – and I think Prof. Easterly’s provocative lecture did show that “we don’t know how to solve global poverty”.
The Doing Business Indicators you are quoting only go back until 2004 – and they are not even complete for all countries within this short period. So unless you want to leap forward and assume that you can generalize the sources of growth based on an unbalanced 7 years panel, I do not understand why the the sources should be “reasonably well understood”.
Also, keep in mind that the Doing Business indicators are compiled by the WB – like the CPIA, such indices can always have some degree of coder bias, so one should be careful and construct hypotheses in a conservative way so you always test against the bias.
And even if the indicators are correct, you cannot derive any policy implications: Even if some function – say “enforcing contracts” – is important in fostering entrepreneurial activity and growth, such institutional arrangements are highly endogenous and the success of setting up such arrangements depend on many underlying conditions.
My point is just that we should be much more humble and acknowledge the complexity of reality and to – paraphrasing Socrates – admit that we only know that we know nothing – even though that might not really help to get you published in high-ranked journals.
I am at LSE and have grown used to being able to access the audio of lectures online. Severely disappointed at your decision, Bill! Please reconsider?
Dambisa Moyo too refused LSE permission to put her lecture up. Is there a conspiracy of anti-aiders to keep their ideas to themselves?
C’mon guys! The message you’re spreading must be heard to be heeded
Amartya Sen came to LSE three times this academic year and they are all on the website! Rodrik and Sachs(like most of honest professors, presidents and nobel laureates who came to LSE this year) are available for a global audience at LSE`s website. Why is Bill so afraid?
OK OK I surrender! Given permission for podcast. Thanks for the enthusiasm.
Professor Easterly, I wanted to ask you about your use of Soviet-era five year plans as indicative of the pitfalls of “planning.” However, I did not get the chance at your LSE talk.
Do China and India, both heralded as development success stories, not devise five-year plans until now? Perhaps you too suffer from sample selection bias.
Hi BIll,
Thanks for giving in to public demand – I’m really looking forwards to listening.
Re: democracy. I think the consequentialist case for it is better, perhaps, than you might think.
In One Economics Dani Rodrik gave some pretty good evidence to show democracies weathering negative shocks better than autocracies and also having better distributive outcomes. Also, Sen’s claims about democracy and famines, and the democratic peace theory, might be subject to exceptions, but the correlations are still solid enough to suggest that something’s going on there. Finally, although I’ve never looked at the evidence, I’m guessing democracies have much better Human Rights records than autocracies; and that democratisation leads, on average, to increased human rights.
And as employment, equality, and freedom from hunger, war, and torture all contribute to utility alongside GDP per capita, the consequentialist case for democracy seems solid enough to me.
I was at your lecture at LSE last week and had coffee afterwards with several other development students. We all had roughly the same opinion: we thought the bit about dictatorships would be shorter and that you’d move on to address the substantive policies the East Asian autocrats pursued. We all agreed that your NYRB assault on Chang proved that those policies are not sufficient for growth, but also that his work indicated they are at least necessary, and were frankly a bit disappointed not to see a substantive engagement with those ideas. That aside, we also had trouble with the “and that’s a good thing part,” since you seemed to suggest that if we knew how to solve poverty, the only way we could operationalize it is through Leninist coercion. But surely ideas have power, and persuasion has power, and if we did have a proveable answer, there would be popular demand from poor people to help them implement it.
Those complaints aside, the first half of the presentation was terrific. I hope our reactions are somewhat helpful.
Ease of Doing Business ranking and income per capita have a relatively high rank correlation coefficient of 0.77. (Doing Business: An Independent Evaluation
Taking the Measure of the World Bank-
IFC Doing Business Indicators, p25). Improving business environment reduces poverty.
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