0:33 Intro. [Recording date: March 6, 2014.] Russ: My guest is Jeffrey Sachs of Columbia University. Jeff, welcome back to EconTalk. Guest: Great to be with you, Russ. Thanks a lot. Russ: Our topic for today is poverty and the Millennium Villages Project [MVP], your ambitious effort to reduce poverty in some of the poorest parts of the world, and ideally to become a model for much wider efforts. I want to start with just the basic idea behind the Millennium Villages Project. What makes it different from other aid projects? Guest: The idea is to achieve the Millennium Development Goals [MDGs]. So it is a goal-- Russ: Explain what those are and where they come from. Guest: Absolutely. In September 2000, the Member States of the U.N., the world's governments, agreed on eight development objectives for the period 2000-2015, to fight poverty and hunger, to get kids in school, to promote gender equality, to reduce maternal and child mortality, to fight diseases like AIDS and malaria, to ensure access to safe drinking water and sanitation, and to enable poor countries to take up new technologies--especially information technologies, and to have an effective partnership with the rest of the world. So, the purpose of the Millennium Villages Project is to actually help these very poor communities, 10 main sites in 10 countries in Africa. And now because of the interest in expanding them we're in places around Africa to achieve the Millennium Development Goals and to learn from that experience new approaches to fighting hunger, poverty, disease, illiteracy, and the other problems of extremely poor communities. Russ: And, what's the idea behind the Millennium Villages Project in terms of what makes them different? Guest: Well, the idea is an integrated strategy that is goal-based. And the goals are very clear: reduce child mortality, for example, by two-thirds compared to the baseline, so that one can see children surviving and getting on with normal lives. To get kids in school; to reduce malaria; and so forth. So, the goal orientation is an approach to work in this area that I find very important and powerful. You measure, you think about the things that can be done to accomplish these goals, you do various strategies and brainstorm. These are all being done at the local level, of course. Measure again; continue to learn. And of course this project will be completed with the Millennium Development Goal timetable next year, and we'll see how we've done. And that's the nature of the project. One of the things that's quite different in this project from others is that it's an integrated strategy: it covers agriculture, health, education, infrastructure. And this kind of integrated development lost favor with a lot of people; and indeed when we started this project, lots of people stood up and said 'Ah, this is impossible; this failed in the past, integrated rural development.' Well, it is an integrated rural development strategy, and I think it is going to show a way forward that is very important for rural areas across Africa.

4:21 Russ: Let's talk about integrated development more generally as an approach to ending poverty. What's the idea, rather than, say, an alternative approach would be to focus on a particular problem. Why is it important to go across the board? And what are you trying to achieve? Guest: I think there are two basic reasons. One is that people care about various things in their lives. They would like kids to be in school, but they'd also like their kids not to be dying of malaria. They would like the kids to be vaccinated, but also to have enough to eat. So, people have many objectives that are pretty fundamental in meeting their basic needs of having enough food and income security and access to health care and so forth. So, you want to do a number of things when you start in a place where basic needs are not met. The second reason is the good sense that there are synergies--that it will be helpful in a community not only to work on agriculture but also to work on malaria control, so that the community isn't sick with malaria when it's harvest time. Or, not only to work on helping to insure that there are enough classrooms and trained teachers, but also that the kids aren't sick all the time with worm infections, and so on. So there are obvious synergies that have been noted for decades and decades. And the idea is that by working across a number of different areas it is possible to make better, more effective, lower-cost, more resilient and reliable progress than any one single objective. And there's lots of evidence of many, many kinds, say on controlling worm infections as a way to improve school performance. And so the linkages are strong across these various sectors. The knock on this kind of strategy in the past has been that it's too complicated. And part of the Millennium Villages Project is to test that proposition. My view is it's not too complicated; my view is that it is possible for a community, a district, to have strategies on agriculture, on water and sanitation, on electricity, on health care, because there is a division of labor in local government. There is a division of labor even at the village level. And there is no reason, it seems to me, to think that it's not possible to make progress on a variety of interconnected fronts.

7:21 Russ: Well, as my listeners know, I'm somewhat skeptical of the simplicity of that approach--whether it works or not; and we'll get to that a little later on. But I want to cite something in support of the integrated approach, which is--we did a podcast episode of EconTalk with Paul Tough on how children succeed, and he discusses at length Jeffrey Canada of the Harlem Children's Zone, which has taken a similar approach to poverty and the challenges of poor children in the United States, particularly in the urban setting of New York City. He appears to have been quite successful. It is very expensive. That would be one thing to say about it. The second is he, of course, is an American and he knows something about the people he is trying to help. I think one of the challenges that the Millennium Villages Project receives has been the attempt to have more of a top-down approach and whether that's possible given the complexity of these different things that we hope to have synergies, but maybe we don't understand fully the way they interact. Guest: Russ, let me start by saying that a lot of what you've apparently heard about the Millennium Villages Project and what's been said about it simply is not true. So, this is why I'm so pleased to be with you today. This is not a top-down approach. This is an approach that says that experts, locally--because this is all African development experts at the local level working in their communities, working on a variety of issues and working closely with the government and with the village communities and so forth can identify paths to help with the scale-up of critical challenges and interventions, whether it's health or higher incomes or education, and so forth. What is top down in the only sense is that the globally-agreed goals of fighting extreme poverty are shared goals. So, in the sense that this project is aiming to reduce child mortality, maternal mortality, deaths from AIDS, malaria control, access to safe water and sanitation, kids in school, improved agricultural production--yes, those are shared goals. But in terms of how this is to be done, this is by local experts working with globally-available knowledge and technology, and local needs, culture, traditions, patterns, and ecology to find the ways forward. And this project has been seriously misrepresented by people who never went and continue to repeat all sorts of things, because, from the day this started there were challenges that this is top down or Jeff Sachs working in his office in New York giving dictates and so forth. This could not be farther from the truth. Russ: I'll give you one example of the top-down approach that I worry about, which is: one of the alternative ways to fight poverty--and it's not necessarily my favorite, but it is a way--is simply to give people money. And it's my impression--correct me if I'm wrong--that one of the foundations of the projects in most if not all of the villages is to increase agricultural productivity. It's not obvious to me that that's the right thing to do. Maybe there are other things people would do with their money, get into other activities, find other ways to earn income. So that strikes me as the kind of top-down approach I'm worried about. As well as picking what crops are the ones they should specialize in and so on. Is that not the case? Has there not been-- Guest: It's absolutely not the case, Russ. And there are financial institutions that have grown--they're called SACOs--that provide financing locally to all sorts of activities. It can be agricultural, non-agricultural. We have, in Mayange, significant scaling up now of carpentry and of metal-working. This is what the local areas are identifying as their possibilities, what kind of crops. This isn't dictated from outside. I saw that Nina Munk claimed it was, and you eagerly agreed with her in your interview. But it's simply not the case. Various things are being tried by local experts. Believe me, I had absolutely no idea when this project started, and didn't until I heard about the wonderful work being done, that silk, sericulture, silkworm farming could be profitable in Ethiopia. This was identified locally. We know nothing about silkworm farming here in New York City, I can tell you. Russ: Yeah. Guest: And this is identified by local experts who are trying to figure out ways to help communities make more money, earn better livelihoods. And we're having this project in a wide range of ecological zones, with all sorts of different crops being produced. In Nigeria, soybeans. In Mali, it's rice. In Senegal, it's onions. In Ghana, it's cocoa. In Kenya, it's dairy and horticulture. In Ethiopia, it's sericulture. In Uganda, it's coffee and matoke. In Rwanda, it's cassava and carpentry. There are many, many non-agricultural activities as well as agricultural activities. These stories just circulate, like the urban legends but these are rural legends, of what's been said about this project.

13:36 Russ: Well, I'm just looking at the Annual Report from 2012. It says, first paragraph [of the section'Introduction to Agriculture and Business Development' p. 14], "The main goal of the agriculture and business development sector of the MVP is to contribute toward MDG-1"--which is the Millennium Development Goals--"to halve"--cut in half--"the proportion of people who suffer from hunger and live on less than a dollar a day." It says, "The current focus of the sector has been on interventions that contribute to raising incomes including organizing farmers into farmer-based organizations and cooperatives, increasing and sustaining agricultural productivity, strengthening agricultural monitoring." Etc. So, that's the kind of language makes me think there's a big focus on agricultural. Guest: Russ, it said 'including.' Russ, that says 'including.' Russ: Yep, correct. Guest: It says including those ways. It didn't say limited to those ways. Have you been to a Millennium Village yourself? Russ: I have not. Guest: Have you been to rural Africa? Russ: I have not. Guest: Okay. I would welcome you to come see. You'd enjoy it. Russ: Fascinating. Guest: And you'd see what's really going on. And I'm delighted you raise a text like that because it gives a chance to ask and clarify. And part of the problem of much of the criticism is that people don't try to clarify. They don't ask. They just make swinging statements that absolutely have no basis in reality. Russ: Let me ask it a different way, then. Do you have a feel for how much non-agricultural productivity has been increased? Obviously agriculture is important. I'm not going to suggest that it's not. And there's been some spectacular increases--which is great--to the use of seed and fertilizer. Is there significant non-agricultural stuff going on? It's okay if it's not. Maybe there shouldn't be. I'm just suggesting-- Guest: I actually don't know quantitatively. We won't know till we do a very detailed survey next year to find out what household income is based on, what the kinds of activities are. We see lots of things happening, but I can't give you a number. But we see lots of local finance. People are not inert, as you know very well. They're not somehow subscribed to this project and that's the only thing they can do. These are real live communities. We have a number of advisers working, local experts all of them--no ex-pats--working, living in these communities, working with the communities and the district to identify things to do. But we actually don't know in any comprehensive sense what people actually are doing. Because they're doing all sorts of things. They're doing farming, they're doing non-farm activities. A lot of people are working in construction or seasonal work. We won't really know the quantitative answer to your question until next year.

16:38 Russ: Let's go back to some of the basics. So, I know there has been a recent expansion in a number of countries, but originally and--quote--"so far", if you can measure it, how much money is involved? How much money has the project expended? And how many people do we think it's touched? I'm trying to get some measure of per capita amounts that we're talking about here for the size of aid. One of your interesting and provocative claims has been that we just don't spend enough; if we spent enough, we could get there, we could get over the hump. So, I'm curious: what do we know about how much the projects have spent so far? Guest: The core of the project is 10 village sites in 10 countries. And then around them are an expansionary, or we call the whole thing, that core village plus the expansionary, we call those clusters. So there are 10 clusters in the project, and they average about 50,000 people. It varies by country. So it's about 500,000 people total in the area. In the first 5 years of the project, really, I would say, depending on the site, from the second to fifth year, because there was a phase-in and we didn't envision the project exactly of what scale and what size at the beginning. It depended on what kind of fundraising was possible. We reached about $60 per person in the broad cluster from years 2 through 5. Then in the second 5 years, from 2011 to 2015, to the conclusion next year, we're phasing out kind of on a down ramp to 0 by the end of 2015. And that was the plan, that by 2015 this project would end and whatever responsibilities would be either individual or local community or government. And we have phased down the non-core-village site quite substantially; government has taken over basically all of the functions in all of the sites by now. And in the core one village per cluster, we're probably at about $40 per capita, something like that, right now. So, when you--I don't have a final sum of that, but when you think about a village or a community of 50,000 [corrected from $50,000--Econlib Ed.], at $60 per capita, which was the first part of the project, that was running at about $3 million a year per site. So for all 10 sites that would be about $30 million, and that would be, total, something like $120 million. Probably half of that in the second phase, as things are ramping down, and less than that right now, because we've substantially, as planned, cut back in the non-core part of the project, handed over a lot of the schools and facilities to the local government. And we'll phase out this core Millennium Village--we call it MV-1; that's the center of the project. We'll phase that out in terms of direct financing by the end of next year. Russ: Does the total spent include in-kind donations from corporations, local government spending, other things? Guest: Yeah, so this is a very good point. The whole project was based on a notion of about $120 per person per year invested in overcoming extreme poverty. And as you know, these are sites that were extremely poor, in poor countries. So these were just about the poorest of the poor in each of the respective countries. Russ: $120 is a small number. But unfortunately the base is pitifully small to start with. Guest: It is an incredibly small number and the fact that people live on such small amounts and die for lack of meeting basic needs is the whole motivation of the Millennium Development Goals and the purpose of this project. So, we said that we would aim to have about $60 of our own contributions and seek about $60 of counterpart contributions, coming from government, coming from the local community itself, coming from other NGOs. And during, I would say, 2009, 2010, 2011, because naturally it takes time to collect all the data and understand exactly where we were. We were running something like that, at about $60 from the project and about $60 from the combined contributions of government, community, and NGOs and local companies and so forth.

22:08 Russ: The expansion, though, that's coming--I'm not sure when it starts or if it has started already--seems to be a much larger sum of money. This United Kingdom project in Ghana, for example. Is it more expensive? Roughly the same? Guest: I don't have the exact number for that one project in Northern Ghana, but I think it's something around $90-$100 per capita. I don't have the exact number on hand. That is reflecting two things. One is the $60 was--and the whole $120, in fact--based on prices of around 2005, 2006; and we've had a significant spike of energy prices most importantly, but other prices as well. So, making this in real terms would be quite important. In other words, inflation-adjusted. Second, the site in Northern Ghana is in the very north of a country where the economic activity is in the south of the country, so the infrastructure is very weak in the north. The transport costs, very, very high; the costs of inputs, construction, and so forth reflecting this relative isolation in the very north of the country. That's why we're working there. And so we put it at a little bit higher. But we're still looking for contributions from outside, and probably aiming for something around, in nominal terms, $150, $160 per capita. I don't have the exact numbers in front of me. Russ: I'm surprised at that, because there have been claims on the web that it's thousands of dollars per household. Guest: Yeah. But this is kind of--sorry to say it--this is really an effort just to confuse people. If you add, say, even $60 per person in a household and then you say the average size of the household is 6 people--so that's $360. And then you say that's for 5 years, so you're talking about something like $1800 and you make a pronouncement like that. And then you say, 'oh, it's not really the project but there's also the matching and so forth,' as if that's all incremental--'oh, that's $3600 per capita'. This is what Mr. Clemens, Michael Clemens did at one point. It tries to give an utterly distorted, hard-to-understand point of view: multiplied by the number of people in a household, at not what the project is giving but what government services and so forth would be giving, multiply it over 5 years; announce some big headline number that nobody has a clear idea about how to interpret. And then announce, 'well, they're giving thousands and thousands of dollars to households.' I regard that as very unhelpful and deliberately distorting, Russ. Russ: Well, I think the key question--we'll link to some of the articles, pro and con on this issue of cost--but I think the key issue here is effectiveness.

25:30 Russ: Before I get to some overall measures I want you to discuss, I want to talk about one smaller issue, which fascinated me. How are the projects using Community Health Workers? Because there seems to be some enthusiasm for that, their effectiveness. I'm curious how they are being used. Guest: The project, in general, is exploring many, many innovative delivery mechanisms. Once we said $60 per capita coming from the project, or even less, you are on an extraordinarily tight budget. This is not some gold-plated budget. This is so tight. Because remember, 60 bucks per capita, that's for agricultural, that's for infrastructure, that's for schools, that's for a health system. I don't think most of your listeners could even imagine that. We have an $8000 per capita health system. We're talking about squeezing all of these advantages. And then I get this complaint, 'oh, look at how expensive this is.' It couldn't be less and still be talking about human beings, I have to say. We're trying to do everything possible--and I mean by we, the communities and the wonderful African experts leading this, and then anything that we can add in the brainstorming and the technology, to get as far possible given the absolutely meager budgets and extreme poverty that characterize the regions where these villages are located and that brought us to these places in the first place. So when you come to the question of health systems, my work, starting as the Chairman of a Commission for WHO, now, 14 years ago, the Commission on Macroeconomics and Health, and then as the U.N.'s advisor on the Millennium Development Goals and my specific work in many of the disease control efforts on malaria and AIDS and others, have enabled me to make a claim--which is a tough one, but I will stand by it--that it is possible, even at $60 or $70 per capita, just $60 or $70 per capita, to have a rudimentary but lifesaving primary health system in an impoverished region. Now, mind you, given the extreme poverty in these places, the normal budget coverage is on the order of $15 per capita, not even the $60 or $70. I've claimed that if we could mobilize a bit more resources, we could help to save millions of lives, scale up core interventions and help young children to have a future, because they would grow up healthy and productive and with brain development and with their basic health needs addressed early in life. Community Health Workers is one part of that strategy that I'm thrilled with, in actual performance; we've worked very hard on it. The idea is to train village workers, people from the villages, typically young women, and some young men--though I would say predominantly young women, maybe age 20 to 25--who may have 10 to 12 years of schooling. They're literate; they're numerate; but they absolutely have no formal health training. And to train them, provision them, supervise and help support them with information technology so that they can be life-savers in their community. And we have implemented this process. It costs about $6 to $7 per person per year in the area, so it's part of maybe that $60 per year targeted health budget, which we can't quite achieve because we don't have the resources and the government doesn't have the resources to achieve that full coverage. We're probably at something like $40-$50 per capita on most of the sites. And the Community Health Workers is around $6, $7, $8, depending on which location. It's marvelous, what it can do. It's unbelievable what it can do. It's bringing malaria deaths down sharply. It's spotting kids that are in very dangerous situations, maybe an acute respiratory infection, maybe failure to thrive, meaning for whatever reason they're deeply undernourished, perhaps stunted at an early age. It's helping mothers to access ante-natal visits and be able to arrive with a plan to get to the clinic, to find transport and to know the clinic and to know how to do it in time for labor. It's bringing down maternal mortality. It is tracking the critical first thousand days of life, so-called, from conception through the second year, which is the most challenging time for survival and for ultimate long-term physiological, cognitive, brain development, and so forth. And so it's a great system. And it's such an exciting system that it's being scaled up very widely. And many of the specific modalities that we are exploring in the Millennium Villages Project, such as the information technology backbone, is being adopted on a much larger basis by the host governments.

31:39 Russ: So that sounds good. I'd love to come to Africa some time, see what's going on. Guest: You're welcome to come to Africa. You'll enjoy it. Russ: But the question is magnitudes. And I'm sure there are many, many beneficial aspects for some of the improvements that have been made in these villages. But when we come to try to measure them, it gets quite--it seems to be more difficult to make the case. So, there have been two peer-reviewed articles that tried to look at stunting and child mortality, published by you and your group. The one at The Lancet had to be corrected because there were some mistakes made, but more importantly than the mistakes, the decrease in child mortality was actually less than the decreases in the neighboring countries where the clusters were located. Does that not discourage you about the impact of these efforts? Guest: Russ, it couldn't be further from the truth. Since you read the book by Nina Munk you'll recall chapters 8 and chapters 9 which describe my leadership and the role of the Millennium Villages in getting the malaria deaths down which has been the most significant success in getting child mortality down significantly in recent years in Africa. And the Millennium Villages Project played an important role and I'm very proud that I played an important role in that as well. And what we said already and what I was saying already back in the year 2000 and then throughout the whole Millennium Development Goal effort for the U.N. and then through the Millennium Villages Project is that it's possible to scale up these basic interventions at very low cost. There was a huge row about doing this. I am one of the architects of the Global Fund to Fight AIDS, TB, and Malaria that helped to do this scale-up. I'm extraordinarily proud of that work and I'm extraordinarily pleased with how it's gone. But what happened was that we now have a way to get comprehensive coverage of some of these crucial life-saving interventions. And it's funny that in this book, The Idealist, Nina Munk does a good job actually, of describing the rather tough battle that I faced personally to argue for the mass scale-up of malaria control. The truth is, of course, that that's a battle where we had phenomenal victory. And malaria, which is a very difficult-to-control disease is down by about 50% now in deaths of children in Africa. It's a tremendous success of the past 13 years. And she actually describes in the book this big fight for the mass distribution of bed nets. She writes that everyone in the business was convinced that Sachs was behind the move. He probably was. And I was, actually. It is a matter of fact. And she describes the very tough battle for this. And it's worked. And so where is all this sardonic attitude coming from when one sees the success of millions of kids being saved? Russ: I don't think anybody is-- Guest: But Russ, you'd be surprised. Because people are sardonic about it and say that it's all terrible. You even said in your own interview with her that I "have smashed the dreams of people--it's one of the cruelest things in the world to come to a group of people, set their hearts on fire, and then it all comes crashing down and to smash it through your own hubris, it's so depressing" and so forth. Come on, Russ-- Russ: A transcript is a good thing isn't it? Guest: Russ, there are great advances that are being made, people should know about them without the cloud of all of this confusion. And Nina Munk's book concluded these two chapters by saying I'm arrogant. That was her conclusion. Not that lives are being saved. And then in the true spirit of a cynic, she says "OK, let's say that universal coverage of bed nets is achieved and that as a result, the rate of malaria transmission plummets"--by the way, both of which have occurred. "After four or five years, insecticidal long-lasting bed nets start to disintegrate. Unless they're replaced, transmission rates in Africa will start to rise. How likely is it that in four or five years Africans themselves will be able to afford new bed nets. Is it realistic?" And so on. In other words, take a success and just make sure that it's viewed in the most negative way. I don't know whether that's cynicism or just pessimism, but is the alternative that the kids should have died by the millions? I don't think so. This is a way forward that is proving scaled success. We should be proud of it. We should know it. We should note it. We should learn from it and we should build on it because it's happened at extraordinarily low cost. And it was a tough fight to get here. And then to be denigrated about dreams smashed and all the rest is not appropriate in this. We need to tell what's happened. What's happened is that despite a huge fight about aid, because there are many aid skeptics, there was a scale-up of development assistance for primary health care. The Millennium Villages played an important role in that in many different fronts. This is working in term of significant declines of mortality rates now. Russ: There's two issues. Let's leave Nina Munk's cynicism out of it. Because I don't know her well. You know her better than I do, but I did not in my time interviewing her or reading her book--she didn't strike me as a cynical person. She strikes me as-- Guest: But Russ, I was quoting you, not her. Russ: Oh, I know. Well, you quoted her twice. Guest: No, no, no. But I was quoting you as saying how cruel I am to smash the dreams of people. Russ: Well, I'll defend myself in a minute. But let's stick with the bed net issue, which is the following, it seems to me. The first is that going back to the facts, the child mortality rate in the villages where you are, did not decline faster, in fact declined more slowly. Guest: I really doubt that that's true and we'll find out because in all of those places the policies included bed net distribution more widespread than in just the villages-- Russ: Fair enough. Guest: Based on the lessons--and Russ-- Russ: Fair enough. Guest: Russ, I can tell you. Russ, please. That is 2007 or 2008 data in that paper. We will look next year, and I can tell you that from what we're seeing, if you want to hear a correct assessment, right now, we're seeing very significant drops of mortality rates because now community health systems, community-based delivery of healthcare, new prevention of mother to child transmission of AIDS, first 1000 days protocols, smartphones, and other interventions are playing a major role. We will see if it turns out that this is a general phenomenon, wonderful. If it is a general phenomenon, it will be in part because of the scale-up that I've been championing and that we've been demonstrating in the Millennium Villages. But we will see. I don't really want to, and I wouldn't interpret the data the way you are--talk about a 2008 data point. Let's talk about where we are right now, what we're seeing, what we're accomplishing, and then next year's evaluation will exactly address your question. Russ: Well it's your paper, not mine and it's the paper that was reporting-- Guest: I know, but you're citing something from the beginning of a project. Russ: First 5 years, Guest: Why are you doing that? Russ: First five years. Guest: No, no. By the way it's not even the first 5 years of the project. It is within the first 5 years of a 5 year project. Of a 10 year project, excuse me. So that's a kind of game-- Russ: No, I don't think it's a-- no, timeout.-- Guest: It really is not--it's not justified Russ. Russ: I thought the Lancet article covered 2007-2010 which would not be-- Guest: Yes. The project goes from 2005--2015. Russ: Right. So it was an assessment. Guest: It was the beginning of an assessment. Russ: Okay. I'm with you. I'm totally with you. Guest: And Russ, I'm going to say it again: What we have seen in public health in Africa, which I am very pleased to see and very proud of what this project and I also personally and the MDGs have contributed to, is a significant drop of deaths, because of the kinds of scaling up of primary health care that is possible right now at low cost. That is the crucial point. Russ: Yep. Guest: And if all of Africa achieves the Millennium Development Goals, I'm going to call it the most splendid success of all. Because that's really the point--how to get this scaled up. When in Kenya, the Health Minister saw what we had accomplished in the one site, and she said, 'I'm going to do this for the whole country,' and I helped her do this for the whole country; and then you get big drops of mortality everywhere, is that a failure of the project or a success of the project, Russ? Russ: The question is-- Guest: Does it mean that the impact of the project is small, or does it mean that it's significant? Russ: The question-- Guest: According to my critics, it means that the impact is small, because they say impact is the difference from the village from the neighboring village. That's absurd. If the impact of the project is to help the scaling up of a life-saving intervention that covers the whole country. They're interested in a statistic. I'm interested in the public health. And they are playing with words. The impact of the project was to help an Africa-wide scaling up of malaria control, both within these villages and outside the villages. I'm delighted that the progress of malaria control has been rapid outside the villages. That's the whole point of this project-- Russ: So am I-- Guest: I'm proud of the role-- Russ: You should be-- Guest: that the project has played in this.

42:41 Russ: Yep, so am I. I think it's exhilarating, I think you should be proud of it; and I'm perfectly content to give you the credit for it. Because I think--it took a massive mobilization of energy and time and weedling and bargaining and negotiating. And it may be the single greatest thing you'll ever accomplish in your life. And that's glorious. But the question, as an economist, that we have to ask-- Guest: Well, I'm proud of it. Russ: You should be. Guest: And I'm proud of other things, too. Russ: You should be. Guest: I hope we can have many successes on many fronts. Russ: Right. Be great. Guest: This is a good one. Russ: It would be great if there were more. But the fundamental question is-- Guest: I'll tell you another one, Russ, if I might, just for a moment. Not a personal success only for that point. But just to explain the real battle that we're talking about. In the year 2000 there wasn't one single African on anti-retroviral treatment, with international official donor support. And only a handful in general, despite the fact that the epidemic was already infecting more than 20 million people. And they were dying without access to the most basic medicines. Now there are about 8 million on treatment because of the Global Fund, because of PEPFAR[?], because of other programs. It works. The costs have come down tremendously. The learning curve operates. Lives are being saved. The productivity of African economies has gone up considerably. The idea that AIDS would be the end of Africa's development obviously has long since passed, because the epidemic, though still serious, has turned down substantially and is on its way down; and now there are even more dramatic things that can be done in the future that are really exhilarating. Those were big fights also, because the aid skeptics say you can't do that. No way to get systems working; it will be too expensive; can't be managed. Africans won't be adherent to the medicines, and so forth. I've heard so much doubt over the years about the feasibility of doing basic things that are crucial for kids in school, for farmers to earn a decent income, for the basic infrastructure to be put in place, for people to be able to stay alive. And time and again these strategies work. And yet maybe because they work, the frustration of those who are against this kind of approach just rises more. So the din and the noise and the confusion turns out to be extremely high. We're actually in a period where tremendous things can be accomplished on many, many fronts. And we're empowered by great, breakthroughs of technology, especially information technology, which makes it possible to organize efforts that were beyond organizational capacity before logistics changed, and delivery mechanisms, and being able to track aid money and being able to police the absolute proper use of funds. Things that couldn't be done before are now routine because we have the capacities through better technologies. We have rapid diagnostic tests that allow diseases like malaria to be diagnosed not in a clinic many miles away but in a household, and not with complicated microscopy and lab reagents, but with a drop of blood on a very inexpensive plastic strip that detects an antigen. And so the possibility of solving these problems, Russ, is huge. And the skepticism, and the noise, and the confusion about this unfortunately is one of the big obstacles.

46:49 Russ: Okay. Well, let me go back to this question of efficacy and effectiveness and cynicism. So, I agree with you. I think the adding of bed nets--and I'm happy to give you credit that the adding of bed nets in the villages made it easier to add them outside the villages, so that a comparison of child mortality within and compared to neighboring villages may not be suggestive of the real impact of the project or your efforts. But the fundamental question as an economist is not whether adding bed nets can reduce malaria, and reduce child mortality--they do, and that's wonderful. The question is whether that inexpensive, as you concede, approach is superior to the integrated approach which you are selling. You're selling an idea, which is very ambitious, which is much more expensive than bed nets; and the question is whether the money has been well spent, and whether there's the bang for the buck. So, that's the challenge--can we distinguish between the effectiveness of a cheap, small intervention that I think everyone accepts as a good idea, assuming that it does persist, and the broader ambitious claims you're making for the project as a whole. Guest: Sure. Not everybody accepted it as a good idea 9 years ago. Bill Easterly devoted part of his first chapter of White Man's Burden to denouncing the idea. He said it was a planner's dream and a practical nightmare and it couldn't work, and took pains to say that exactly the kind of approach that has worked, wouldn't work. So this is an ex post reading. But at the time there was little support for it, which is why the fight was so hard. And I would say that that's true on many, many fronts that this project is helping to scale up. Showing how Community Health Workers can work and can work so effectively has been a big success of this project which is now being taken up at national scale in the. We've introduced Community Education Workers the same way to help get kids in school and help them to learn better. This is another area where at very low cost it's possible to make significant progress. We've shown how one can have distributed off-grid solar power in an extremely effective manner on a business basis--prepay solar, like prepay phones. And this is one of the innovations that is now being scaled up in many countries in Africa, a project called SharedSolar that the engineering team of this project has helped to develop. We've helped to create a number of information systems so that one can have monthly information. It took a long time, by the way, but now that we have good connectivity, we have smartphones, we have the training, the programming that was needed for this. Also the international system is quite complicated with all the approvals and all the rest that need to be done, especially when one is handling clinical information and so forth--all of that is now in place. And that information system, the host countries are saying, 'oh, we could use that at a national level.' And we're helping the Nigerian government, which is indeed a very complicated country with 160 million population to have for the first time, information that reaches into what are called their local government areas. We have several important innovations in business development, especially the so-called SACOs, which are community-based, very effective finance institutions. We didn't invent them by any means, but we're finding them to be very powerful instrument for the kind of local finance that you'd really like. And that's what's financing a lot of the up-scaling in things like dairy and honey and sericulture and aquaculture and other things that I mentioned earlier, which are coming from the ground up, just as you would like. We have a massive project now in digital soil mapping that emerged from the science of this project and the realization that improving soil fertility was a very inexpensive pathway to major increases of crop yields. It absolutely horrified me-- Russ: Let's talk about the crop yield-- Guest: Sorry. Russ: Let's talk about the crop yield for a second. Guest: Sure. Russ: Because, we talked earlier about agricultural productivity being increased in some of the areas. It's been quite dramatic. It's been two-fold and three-fold, which is very impressive. It's hard to understand how that's going to be a scalable solution, right? The increases in productivity are going to lead to lower prices. Profitability of agricultural tends to be--profit margins are quite small. It seems it's going to be difficult and challenging to get lots of farmers above subsistence by making them more productive. Do you worry about that? Guest: Well, agricultural upgrading has been a key part of economic success in every region of the world that I know of. And the basic idea is that when you get the crop yields up, then a much smaller proportion of the population has to engage in farming to meet basic food needs.

52:44 Russ: And that brings me to my next question, which is: The real criticism of Nina Munk, and my interview with her--and you've talked about my cynicism or sardonic nature, as well as hers--is her observation that there was little sustainable transformation of livelihood, of jobs. So the question to me is--and this, to me, is the fundamental question. Many of these things I think are great; they're wonderful. Whether they're cost-effective is a second question. But certainly you're having an impact on people's lives during the course of the project. The challenge is: Is there a sustainable market? Is there a way for people to buy and sell? And what I wrote after that interview was: We better ourselves by bettering others. And what a market does is it allows you to help other people by doing something that they value and they pay you for it. Do you see that happening? And why didn't that appear to be happening, at least to an on-site visitor in the two villages that Nina Munk was in? Guest: Okay. Of course it's happening. And Russ, you love markets; I love markets. And of course markets are functioning. And they function better now that there are phones, now that there is more electrification, now that the roads are improved. Because transactions costs are a critical part of making markets work. Russ: Absolutely. Guest: And markets are working in rural Africa, and they are working in Africa more generally. And as you know, economic growth in Africa has been rising significantly. I regard that as a result of a number of different phenomena. One is of course the pull of China, which has made a big difference to primary commodities' prices; it has helped lift agricultural prices; it's helped lift other commodity prices that Africa is complementary to China in supplying their demand. Big gains of productivity coming from the mobile revolution, which is sweeping Africa the same way it's sweeping other parts of the world. Increasing investments now in electrification and in other critical infrastructure. And I think it's worth my saying, though I wouldn't have thought there would have been such confusion about it, but you know I'm a macroeconomist and development economist and I've worked in about 130 countries around the world at some level or another, or visited that number and worked in most of them in one way or another. And I want to be very clear that rural development is one part of overall economic development. It's only a piece of the overall puzzle. It's not meant to be the ultimate solution to all of the challenges of Africa. I've said constantly, though I don't think necessarily Nina Munk reported it or got it exactly, that rural development has to be complemented with urban development, of course, because most of the population is going to end up being urban, not rural, in the end. That's part of the goal, actually, of rural improvement. People who say that rural productivity will have people stay in the countryside have it exactly backwards, for the reason you just explained. Everywhere in the world, you raise agricultural productivity, the children head to the cities. That's how it works. So we need urban strategies. And I work with a number of governments on that. We need national and indeed regional infrastructure. So there are many different scales and many different aspects of overall development. I am pleased that Africa, the sub-Saharan region, is now growing at between 5 and 6% per year, maybe 6% this year. The IMF forecasts that sub-Saharan Africa will be the world's second-fastest growing region. Of course, you and I know that is just the beginning of catching up growth. They ought to be the fastest growing region in the world for two or three decades to come, to narrow some of these phenomenal gaps. But we see the growth starting from what was terrible--at best stagnation and even reversal during the period 1980-2000. So, I see lots of good things happening. The sustainability of what's happening in the villages--well, yes, there are markets, of course, that are being formed. There are some wonderful projects--it's not even projects; it's just what you would call normal market development, what I would call normal market development. In Nigeria, for example, there is a very strong value chains that have been developed. So, there are about 4000 farmers in the project that are part of maize and soybean, completely commercialized value chains. That's not our commercial chains. Those are buyers that are buying up the products, just on a perfectly normal market basis. And this is of course what has to happen. Ethiopia, to my shock as I already said it earlier, is developing a sericulture chain. I don't know anything about silk farming. I find it fascinating that one of the Millennium Villages is doing this and is finding marketing links and ways to sell the silk to Addis, ways that the silk weaving is actually finding its way to international markets. And so you're absolutely right that if this were truly an island of isolation, if this were a central plan, if this were some naive experiment of Mr. Stalin or somebody like that, it would be absurd. The idea here is absolutely to help provide the basics--the basics of health, deworming, nutrition, education, roads--basic feeder roads because they're just feeder roads; we're not building major roads--but feeder roads, water, sanitation. Help with business organization to start up SACOs, these mutual chains or to make contacts with buyers and to identify agronomic limitations that can be overcome through soil nutrient improvements or other agricultural practices, or introducing better seeds. We're not out to create an autarkic economy. You know me. I've been writing about the value of trade and markets all my career. I'm a huge believer in markets. And I know that there's no development without markets. And there's no sustainability in Africa, Russ-- Russ: No doubt. Guest: without urban development and without industrial development as well. Russ: The problem is-- Guest: So this is just a piece of this. Russ: The problem-- Guest: It's not a problem. Russ: No, but the problem is-- Guest: It's not a problem--it's a piece of the puzzle. Russ: No, the problem is I don't think we know very much as economists about how to create markets. We certainly understand what they are capable of doing once they're established. We understand that they are--good economists understand that they are buttressed by culture and norms and all kinds of unobservable things that we can't seed or grow. We have to let them emerge. And we don't know how to help them emerge, so I don't know-- Guest: I don't agree with--I don't agree with that. I just don't agree with that. My experience has been that if there is a functioning port, if there are roads, if there's electricity, if there is communication markets will take the opportunity and people will find ways to make money. And that can happen in a number of ways. It can be some local entrepreneurship, and it can be some international entrepreneurship. Last time I was passing through Addis Ababa, I met a woman who--from China--who's exporting shoes from Addis. She said: now that the transport costs in Djibouti have come down so much and now that the wages in China have gone up so much, this is a great low-cost production site for me. And she was expanding to millions of shoes. This is how things get--

1:01:46 Russ: Yeah, I agree with you. So, let's-- Guest: Yeah, but that's-- Russ: Let's come back to this bottom up, top down issue we started with. If you take a group of farmers in a desperately poor village and you give them seed that makes them more productive, you change their lives. Mostly for the good, I assume. And it appears that it was mostly for the good, in the villages where that happened. But that isn't what they chose to do on their own. I don't think they picked the kind of seed. They didn't vote. They didn't have--they weren't given money to decide which kind of seed they wanted to increase, the productivity, what kind of crops. And so inevitably there are decisions that are made that are not really market decisions. And it seems to me that is going to affect the effectiveness of the project. Guest: Russ, you could have said the same thing, and people did say the same thing, about malaria nets: 'Why are you doing this? There's a market out there and if people really want them, let them buy them.' And yet more than a million kids were dying of malaria. And there was a solution, obviously, in sight. And that solution has worked. And it has been taken up, as it should be, as a public health challenge. And it's working. Russ: But that's not a--but that doesn't imply that increasing-- Guest: And it's been-- Russ: But that doesn't imply that increasing the productivity of maize farming is going to lead to a better life the way malaria bed nets did. It's not the same. Guest: Well, it is the same. Because in the African context there has been a very specific problem, which is that the poorest of the poor have just been left to face disaster where they could not afford inputs, they could not improve their soil nutrients, they could not get access to markets or seed, they didn't have agricultural extensions. So this is the sector because the World Bank had decided back in 1985 basically that there shouldn't be almost any public role whatsoever in helping some of the fundamentals, even for the world's poorest people. What you could see in the early 2000s was a plain disaster, like the public health disaster. But this was the agriculture disaster, that yields were a tiny fraction of what they could be, and a tiny fraction of the profitability of what they could be, because, you know, that when people have no collateral at all, when they have no knowledge of what is potentially available, when there are not markets there to begin with because they don't exist and farmers can't afford even a bag of fertilizer, you have a start-up problem. And throughout the world, the improvement to high yield seeds and more intensive farming, has often, especially in the more difficult areas, needed a kind of jump-start. I'm not for that for the long term. I don't want to see farming on a state-run basis any more than you do. But when you concede that you have a continent of impoverished small-holders who literally, despite back-breaking labor every day could not grow enough to eat because their soils did not have enough nitrogen in them and the seeds could not support a decent crop, you have a problem. And that problem was not only festering. That had gone on for 15, 20 years of tragedy while the rest of the world was climbing in crop productivity--agricultural productivity in African grains was stuck below 1 ton. Now you say that we forced them to do this and to do that. That is not the case. And everywhere, locally-- Russ: No, you chose for them. That's all I meant. Guest: It's not even so, Russ, because after the first couple of years this quickly transitioned to solutions like local banks and to SACOs. We don't even subsidize the fertilizer right now except for widows on .1 hectare farms and so forth, where it's clearly a social support policy. For the rest, this is organized in markets. This is organized through SACOs. This is organized through cooperatives. This is organized through value chains. I don't know where the idea comes from except the fact that it's really important to understand, really important, that Nina Munk visited this project in the beginning stage of the project. She reported from one site that is absolute not even one of the 10 core sites. And I'll be happy to talk about it, but absolutely extraordinary--it's the one place in the project in a war zone. In a violent zone. Extraordinarily difficult, one of the harshest environments you'd find anywhere in the world. And the other site, she reports an anecdote from, I think it's 2008, as if that's the end of the story. And so a lot of this idea that one has about this is unfortunately what has been said again and again, not based on at all how the project actually works. It's just a basic point. Russ: I'll let Nina Munk defend herself, which she has done. Guest: Sure. Of course she will. Russ: People can read her book and listen. Guest: Absolutely.

1:07:28 Russ: But it does raise the fundamental question that we'll close on this--we're overtime but it's worth it because I think it's such a crucial set of issues that we're talking about. So, maybe she's wrong. Maybe she misperceived things. But of course, there's a possibility that you're wrong, that you, as the head of the project are not really the best judge. The challenge, and you've been criticized by a lot more people than Nina Munk--you've been criticized by a large swath of the Development Economics folks. Because it's going to be very difficult in 2016 when the project comes to an end to evaluate whether it's been successful. And again, success isn't: people's lives are better. I hope they are; I expect them to be. Usually they are; not always--sometimes there are really awful unintended consequences. And those are the ones I was referring to in our quote which you took from our transcript, which I still think is true, that if-- Guest: No you don't. Russ: Yes, I do. Guest: You really think I smashed the dreams of the people in these villages, Russ? Russ: I think it-- Guest: Do you think that they're unhappy right now, by the way? Russ: I have no idea. Guest: I know you don't. But you said so. You said I smashed their dreams and that was the cruelest thing that could be done. Russ: Well, I have-- Guest: Do you really think that's the case? You didn't raise that question. You asserted it, by the way. Russ: Yes. So here's how--let me explain why I believe that, or why I at least worry about it. And that was based on the evidence that Nina Munk gathered in her 6 years with you. So, it wasn't like-- Guest: She wasn't 6 years with me. She came on 6 visits of roughly 1 per year. And by the way, she visited an average of one week per year in the first half of a project. That you just want to know-- Russ: Okay, well we'll see. We'll see. The question is-- Guest: What do you mean, 'we'll see'? Russ: Well, we'll see how it turns out. We'll see how-- Guest: I know, but Russ, you said--I'm sorry--that part of what Jeffrey Sachs does that I think is so destructive and deeply unfair is that I use a kind of emotional blackmail, blah, blah, blah; cruelly disappointed, harmed the people he supposedly set out to help. No. Sorry. That's Nina. What you had said is that the cruelest thing in the world is to come to a group of people to take their dream and to smash it-- Russ: I think that's true-- Guest: through my own hubris. Russ: I think it's true. Guest: Come on, Russ. Russ: I think it's true that it's cruel-- Guest: You think I smashed their dreams? Russ: I think it's cruel to smash people's dreams. Guest: Yeah. You think that I've done that? Russ: Well, that's the question, isn't it. Guest: Well, yeah, I'm sorry. Is it the question of millions of people alive today because of scaling up of these critical health interventions, farmers getting more yields, higher yields? Do you think that kids in school, more water supply, sanitation available, rural electrification--you could say I'm--that there are better ways to do it. Russ: You're telling stories. No. You're telling-- Guest: Russ, you could say that-- Russ: No, that's not what I said. Guest: Russ, you could say there are better ways to do it. You could say, is this really cost-effective--although I would say that $40 per capita now or $60 per capita then is hardly the extravagance it's been painted to be. But to say that I've smashed their dreams. Russ: No, what I said is that I said-- Guest: It is what you said. Russ: Read it again. Guest: Okay, I'll read it in its entirety. "And yet, in many ways"--and you concede that the program had some positive effects--"but in many ways it's one of the cruelest things in the world to come to a group of people, set their hearts on fire saying I'm going to change your life; there's magic coming--it's the magic of expertise and wisdom and money--and your lives are going to be different. And to take that dream, which every human being has of a better life, especially for their children, and to smash it, and through your own hubris--it just, it's so depressing partly because those arguments tend to win." That's what you said. Russ: Yes. And-- Guest: I haven't smashed their dreams. Russ: Well, I don't know if you have. Guest: Their kids are alive and they're staying healthier and their kids are in school and they have some chances and you can say I'm an imperfect person and it's an imperfect program and-- Russ: Of course it is-- Guest: maybe you could do better. Russ: That's OK. No. No. Guest: And I'm sure that there are ways to do better. But to call this one of the cruelest things. Russ: Well, one of the cruelest things is to smash people's dreams. The question-- Guest: Yep, and as you said, smash their dreams--I think that since you haven't even been once, you haven't talked to one person in a village, you haven't even been to rural Africa. To make a statement like that--you didn't say, 'Did he?' You weren't interviewing. You were making an assertion. Russ: Yeah. Guest: What is the basis of that assertion? What is-- Russ: The basis of that assertion is-- Guest: even one shred of evidence for that?