0:33 Intro. [Recording date: June 12, 2017.] Russ Roberts: Today's episode is a little strange. It starts with the fact that a while back you wrote--not so long ago--you wrote an open letter to Bill Gates, a very wealthy man, reacting to his idea of giving poor people chickens--poor people in Africa--as a way to escape poverty. That open letter of yours to Bill Gates prompted a response from Lant Pritchett. And so, I interviewed Lant about the topic of how do we help the poor. And inevitably some of your arguments and points came into the conversation. So, I want to get your side of the story today on some of those issues and more broadly and more generally on how we should think about development. Let's start with Bill Gates's original idea. What was he suggesting, and how did you respond to it? Chris Blattman: So, Gates and the Gates Foundation have a lot of big ideas; and this includes driving down financial transaction costs and tackling serious diseases. And generally terrific programs. One idea that Bill Gates has floated a few times in the last year is the idea that chickens are the future for Africa: basically, that they are very poor people who don't have a lot of income, and they are basically scrounging around a subsistence [?]. And, if we could give them chickens, they they'd be able to raise them. They could eat them, of course. But more importantly, they could sell them or they could sell the eggs, and make some extra money. And, this would make them much less poor: maybe they earned $2/day; maybe now they'll earn $4/day. Who really knows? And he called this one of the best investments we could make. Which is probably true to some extent, except what was unusual about his idea is that he envisioned perhaps 30% of Africans. So, this would be 300 million people raising these chickens rather than the existing number, which is maybe 5% of Africans--so, maybe 15 million people, for argument's sake. Russ Roberts: And, you wrote this open letter. What did you say in that letter? Chris Blattman: Well, I mean, so, you know, we share a common premise is that one of the reasons people are very poor is that they don't have the opportunity to engage in business: that it's actually not so hard for a lot of people to go from earning $1 a day to earning $2 a day or $2-$4 a day, or $5-$10 a day by starting up a small enterprise; and that the main thing stopping them from doing this is they don't have any capital. If they had capital, they wouldn't be poor. So, they don't have a lot of cash; they don't have a lot of assets; they don't have productive assets. And that could be tools, it could be buildings to build things in; that could be the raw materials, and the skills to build these things. It could be animals. A cow is an asset, or a form of capital; a chicken, or a bunch of chickens is. So, they don't have these things; and they generally don't have access to borrowing. And so, if they get access to capital, you often see people leap ahead and start businesses. So, I think we share this idea. And chickens probably aren't a bad--they aren't a terrible investment. I guess I--before Bill Gates, who is one of the most influential people in development--writes influential development letters--I think it's important to try to correct some possible problems. One is that it's not clear that anyone's going to actually make money if you suddenly go from 15 million to 300 million Africans producing--I think I've actually got my numbers wrong, actually: I'm not doing division and multiplication in my head. Russ Roberts: It doesn't matter. It's a big [?] increase. And we're pretty sure that-- Chris Blattman: Yeah, 33%--a third of Africa. Russ Roberts: That could affect the price of eggs. You know. Hypothetically. Chris Blattman: Yeah. You know. I was surprised he made this argument because he's a very smart guy and he understands economics. So, this isn't a crazy idea: If a third of Africans start producing chickens and eggs, that the price of chickens and eggs are going to fall pretty fast. And there's probably limits to how many chickens and eggs people can eat. So, that's--it just struck me as an odd idea. And if it was some other organization saying, 'We're going to do this,' then I sort of roll my eyes. But when Bill Gates says he's going to do it, there's a good chance he's really going to try, and maybe succeed. So, it's not the best--not everyone should invest in the same thing. And then, of all the things people could invest in, it's not clear to me--and I think there's a lot of evidence pointing to the idea that: Chickens are a fine investment. But they are not necessarily a great investment. And so, why were folks [?] on giving people chickens? I don't know.

6:01 Russ Roberts: But, I thought your real point was: If we gave them money, they'd be free to buy chickens if they wanted; or they could buy a piece of a cow [i.e., a share of a jointly-owned cow--Econlib Ed.]; or they could buy a hammer; or they could buy access to electricity--or whatever it is. And presumably, people have a pretty good idea of what they need relative to what you think they need. And, chickens just obviously--to me--we're going to get more deeply into the economics of this--but it's obvious that chickens is the wrong answer. Whatever the virtues of chickens are, it can't be the case that giving 300 million something is--it's going to be better to give them money. I'm pretty confident about that. Now, you could argue that if you give them money they are going to use it on gambling, or drinking, or partying, or whatever you think is the wrong use of the money; but, 'They can sell the chicken, come on! They can convert it into money.' So, this romance, I think, 'Chickens are the key to the future,' like plastics are in the movie, The Graduate--it's just--or computers in 1978--it does seem a bit naive for someone who is clearly not a naive person. You could think of it as symbolic. But I think your point was: We've had these debates--which is what I think we talked about in a previous episode about different ways to help people with small amounts. Obviously, if you give them 1000 chickens--one person a thousand chickens, and one person a thousand of something else, and another person a thousand of something else, maybe it would really change their lives. But if we're going to give micro-amounts, like 5 chickens, or 1 chicken, cash might be even better. And you and I are both kind of fans of cash. There are problems with cash. That's a different episode. That's not what we're talking about today. We all understand that cash has drawbacks, too. But, I think you proposed--what was interesting about your response to Gates was: 'Let's have a horse race,' to add another animal to the metaphor mix. 'Let's see whether chickens outperform cash.' Right? Wasn't that the thrust of your point? Chris Blattman: Yeah. And the reason is, is because it may be like a deeper point. It's not about whether--there's lots of reasons cash could be better than chickens, and for the reasons you've just mentioned; and there's some risks, as well. Those are all--and we don't have to talk about--I think generally the picture looks pretty good for cash, and we don't have to talk about the details today. But, the deeper point is the problem with a lot of programs--given that we're already giving--a lot of aid is donor agencies and governments giving very poor people stuff. It's giving them skills-training. It's giving them chickens. It's giving them cash. It's giving them other forms of capital. It's giving them productive assets. Right? And I'm excluding all the stuff that's about public goods, and water, and health--these are huge and they are important. And we're going to set them aside because they are just a different kind of thing. A lot of assistance is giving poor people stuff to either eat or to turn into something they can eat. Meaning, they can start a small business with it. And that's what the training and the cows and the [?] and some of the cash are mainly for. So, the problem with most of these programs is everyone thinks about the numerator: What's the impact of this program? And nobody thinks about the denominator, which is: What's the cost of providing this program? And then, we sort of divide that to get some sort of return. And when we compare those things, if you ignore the fact that some of these programs are dramatically more costly than others to deliver, then even if one is more effective in terms of its impact, in terms of how big a business someone can grow, if it's also 10 times as costly, that's a problem. And this is the problem with chickens, in some sense, is: Somebody has to go and buy the chickens; and then deliver them to the people. Or, somebody has to go and hire a trainer and bring them to the village, to train people in whatever it is you want to train. Maybe it's raising chickens--this is often a big part of these chicken programs. But maybe it's something that's standalone, like how to start a business. Or something. So, this is a problem, because those people--all that labor and all that transport is really, really, really expensive. And these people are often in remote areas. They are very poor. Even if they are in an urban area and not that remote, they are earning so little that giving some reasonably middle-class person in that country to go off and buy the chickens and then deliver them, or deliver the training, or even get the training to go and deliver the chicken, is so costly that it totally outweighs any potential benefits that--maybe not totally, but it grossly outweighs a lot of the benefits. Such that, some of these programs--the studies that have looked at chickens and giving people chickens and cows and goats randomly pay off, but it takes something like 15 or 20 years before they cover the costs. Basically, the impact is as much as the program costs. And that's a lot.

11:02 Russ Roberts: But I also thought your main--and that's a great point. Those are great point. And they raise a separate issue we may come back to, which is: 'Hey, I know what you need. Here.' I alluded to that earlier. It's like, 'You need to learn how to make butter. Here, let me teach you. I'll give you some butter machinery.' There's a certain lack of appreciation for knowledge and how hard it is to understand how to impact a person's life, and the material versus spiritual, and [?]-- Chris Blattman: Well, one of the other things that's going on--I have a lot of friends in these organizations. My wife works for an international rescue committee. I've spent a lot of time working with these organizations. And one of the--if you put yourself in their shoes--first of all, you don't always know. And the thing is that you've seen a lot of programs where people get chickens without the training--because that seemed like a good idea. Or they just get cash. Like, you see a lot of examples where people fail. You don't know if everyone fails. You don't know how many people succeed. You know a lot of people fail. And we know this is true. Like, the big cash experiments I've done, others have done--at least half the people don't really move ahead as a result of this cash. They start a small enterprise and it fails. This is what business is. And that's hard to--you don't know if on balance people are succeeding or failing, especially when you just give them cash. At least with the chickens you can see something there. And you are really hesitant to let people fail. So, you want to do, you want to invest as much as possible in people to minimize the risk of failure, because they are in your circle. You see them, you care about them, you are responsible, you've done something to their lives and in some ways you are responsible. And you have the ability to continue to help them. And you don't see all these other people you are not helping. So, doubling or tripling or quadrupling or even further increasing the cost of a program--not to make them dramatically more successful but just to reduce their costs of failure--is really natural human instinct. Some people would say that's their responsibility; you could make a moral argument that that's appropriate. But I think that's what drives this cost up. So, it's easy for me to sort of, from afar, say, 'Well, I don't know any of these people. They are all strangers to me, and I'd rather see more people helped for less; and if some fail, that's going to happen anyways,' rather than just investing in a small number of people and trying to keep them from failing. But, if I were in their position--certainly when I raise my children I don't take that approach. And that's another extreme example, right? So, you know, I'm sympathetic. But as a small NGO--a small Non-Governmental Organization--you can afford to make your own moral choice about whether you help a lot of people a little bit and let them fail sometimes, or if you help just a few people and really foster them through. But if you are the U.S. Government Aid agency, or you are the Ugandan Bureau of blah-blah-blah that's in charge of this, in some sense you don't get to make that choice. In some sense, your responsibility, I think, is to help the most people. Russ Roberts: But I also thought you are making a methodological point with Gates which is really interesting, which is: Well, maybe it will have a good impact; maybe it won't. Obviously if you sat down, if you and I had 30 minutes with Mr. Gates we'd say, 'Gee, 300 million is a big increase. Maybe that's going to have an unexpected effect on--you wouldn't want to generalize from the 5% who have chickens now to the 30% you'd like to have them.' And he'd nod, say that's a good point. But I think you are trying to say, 'Let's try to actually measure this. Let's try to actually see--let's learn something. Before we launch this enormous, grandiose experiment, let's do a pre-experiment where we try to see which is better. And we'd learn so much that we would be able to help people much more down the road, not just with your venture.' Is that a fair summary? Chris Blattman: Yeah. This is actually--I make [?] this point sort of in general: If I go to--pick a country--if I go to Uganda or like Uruguay[?] or Colombia which are all places where I spend a lot of time or have spent a lot of time, you'll see that the government or the World Bank or somebody saying, 'All right, we have this $5 million, or $100 million, or $500 million dollar program that we're going to roll out over the next 5 years; and we've written the program manual and we [?] spend all that money doing x.' And x is quite specific. It might be like chickens. It might be job training. And then they just launch into it. And inevitably it fails, because, what are the chances that you ever get that formula right from the outset when you implement it? And so, 2 or 3 years in they redesign and they start figuring it out; and, they don't have a lot of sense of what's going on. Maybe then they run some evaluations or they turn to more of the evidence. And let's say they get a slightly better program for the last half of that 5-year program. Then, that's a lot of money wasted. And if it's a credit to that country, meaning it's a loan to that country, then some future taxpayer of that country has to pay that back. Which seems kind of tragic. Or it has to be forgiven--some future taxpayer of this country has to pay that back. And that just was all money that--you know, that could have been averted. And I, so every time I'm there, I'm saying, 'Listen, instead of doing this, I'm saying: Why don't you do 5 or 10 things on a small scale for the first year? You have to scale up, you have to get moving. I understand the political pressure. So get moving; but why don't you just try 5 or 10 things? And maybe you then really rigorously study what you're going to do?' That would be fine. Sometimes we should do that. But even if you don't, it will probably be obvious which of those 5 or 10 things seems to be more successful than the others. Certainly the ones that are failures will be more obvious. And then you'll know with more precision, if you invest some money in studying it. So, as a general principle, this is just something that's not done with aid--the sort of trial and error and with some rigorous testing. And we've managed in the last 10 years to introduce the idea of randomized testing with randomized trials without introducing this idea of trial and error and moving ahead and trying many ideas. And that's a problem. I would like to see both. So, that's kind of what I'm saying--this is just another case. Instead of just scaling up your crazily specific program that's only been a little bit tested, why don't you try a few different things and then push ahead with the thing that's most successful? And in this case, I think we've got enough evidence to say, 'Actually, we're doing a lot of this chicken stuff, regardless of what Gates is doing. We're doing a lot of handing out of chickens and cows. And--I don't know if it's $1 billion, or $10 billion, or $100 million dollars a year, but it's somewhere in that range. And if we could spend $10 million dollars just to, like, tweak the direction of that, to sort of kill a bad idea and replace it with a less bad idea'--that's kind of what I want to see. I want to see us rigorously evaluate, like, run a horse race between these different things that we could do, these different varieties, kind of like trial and error but in a structured way. And then just replace the bad things with less-bad things. And thereby make a lot of very, very unfortunate people a bit better off. That's basically it.

18:05 Russ Roberts: So, I have a lot of things to say to that. It's a fantastic summary of, I think, the position you are taking. I just have to mention in passing, though: you said, 'Well, of course it fails.' And I think a lot of people would say, 'How could it fail? You are injecting all this money into these sectors, regions, poor people, whatever. It's got to have some effect--some overwhelmingly good effect. You're putting--you are going to add $100 million into this community?' And it's really, I think, a sobering reality that it often doesn't work very well. So I just want to mention that to the point where you say, 'Well, of course it doesn't work.' But I think most intuitive, everyday people would say it would work, akin to their natural inclination to inject money into the U.S. school system. 'Because the more you spend, the more education you get.' Which of course isn't true. It might be true. But it need not be true. And, if the incentives-- Chris Blattman: Right. And I would say, even if you are more optimistic--and I think if you put in more input you are going to get more output. You put in more money to the educational system, I think probably you are going to get more education, or better outcomes--not always, you are right. Same with this aid, chickens. The chickens are not going to be a bad idea. They are not going to all fail. It's just: We're putting so much money into this that--not only is someone going to have to pay back in future, but it's such a missed opportunity. Like, it's really desperate to--if you were making $1 or $2 a day, this means like, your child is probably going to--the chance your child dies in infancy or of some disease or that some crisis hits and really terrible things happen to someone in your family is just so high. And that's also true at any level of poverty. And it's just more dire and risky, the poorer you are. So, to sort of callously and irresponsibly, in my mind, not try to use the sort of trial-and-error approach and try to do the right thing, and rather than just have 33% of Africans or something producing chickens--they might be a bit better off, they'd probably be better off. What if--that's such a missed opportunity to really change some people's lives? One of the rare instances where I really think aid can have a big impact. It really is an area where we can be super-effective; and I don't say that about a lot of things. And so, it's such a sad, tragic thing not to do this more responsibly.

20:34 Russ Roberts: Well, I want to challenge the premise that underlies that, even though I'm sympathetic to it and it sounds great. We had on the program a while back, Adam Cifu, author of a very provocative book, co-author of a book, Ending Medical Reversal, where he shows that so many times a study will be done, a cross-sectional, longitudinal study, a statistical analysis of some device or some dietary change, some relationship in epidemiology, is alarming or effective, whatever it is. And people start doing this technique or avoiding this technique. And then, 15 years later, there's an actual randomized control trial where people are put into two different groups: You're not using statistical techniques to try to hold things constant; you are actually using a real experiment, not a pseudo-experiment. And you find out that the original finding doesn't hold up under the randomized control trial. So, this is why--we can call it the gold standard of experimental science. It's what scientists do: They see if things can be replicated; they try to actually test things directly. It's a really nice thing. And, there's a huge--I don't want to call it a fad--a trend, we'll call it a trend--it could be a fad--in Development Economics to do randomized control trials. Which is what you're talking about: Wouldn't it be great, do 5 or 10 experiments to see what works and what doesn't work? But, the problem it seems to me is that unlike epidemiology or medical things where a trial could actually often illuminate what does and doesn't work, it strikes me that in human societies, that's a lot more difficult. So, an example we've mentioned before on the program is deworming. Deworming, a lot of excitement about it because some experiments had showed it to be very effective in helping children--if you took the worms and parasites out of their system, they could sit in school longer, make more money, etc.--have better lives. But, it's not obvious that it scales. It's not obvious that it worked in other villages. It's not obviously--etc. So, isn't [?] part of the problem here--and is this a reality or am I being too skeptical?--that, the kind of knowledge that you would like to produce with those trials in the early stages of a large-scale rollout of a program--they are not necessarily going to be as reliable as a true scientific experiment would be? Chris Blattman: Right. Well, yes. So, this is basically right. But the question is--I guess, my argument would be, I guess I think is a pretty basic premise: Through the accumulation of lots and lots of empirical evidence and theoretical thinking and then using that empirical evidence to sort of understand our theory of poverty--why are people poor and what kinds of things make them less poor? The accumulation of lots of evidence from lots of places is how we get a better theory. This is just how it works; and it will be harder than in physics or medicine for exactly the reasons you say. But, there's a big difference here. So, the deworming excitement is coming off of--I don't know if you know this: I worked on this experiment when I was a graduate student. This was like one of my first jobs in development: I ran one of the followup surveys. Russ Roberts: I did not know that. Chris Blattman: Yeah. So, I ran the 5-year followup survey. So, I spent a lot of time with these kids who got this deworming medicine. It's a very incestuous group, a small, incestuous group, development economics. So, listen: There was one big trial showing big effects, and it was on the shores of Lake Victoria in Kenya, which is the birthplace of humanity, and then not coincidentally the birthplace of human parasites. So, an impact of deworming medicine there is going to be not surprisingly quite impactful; and if you go somewhere else, where you are not on the shores of a parasite-filled lake, then maybe it's going to be different. And that doesn't surprise me. And we don't actually have a lot of trials of deworming medicine elsewhere. And, the other ones haven't been very good, or they haven't been very long term, or they haven't measured economic outcomes and educational outcomes. So, we just don't know. Whereas, when it comes to policy, we have dozens and dozens and dozens and dozens and dozens. So, it's not just randomized control trials but all sorts of evidence. A great book is Poor Economics, by Abhijit Banerjee and Esther Duflo, who sort of pulled together all the descriptive and observational and qualitative, and experimental data. And just a lot of it points to a particular view of poverty--that people have constraints; that from little access to credit and to capital and little access to insurance; and overwhelming evidence that just one of those constraints is relieved, maybe cash, maybe by a chicken, that people leap ahead. That you can make improvements on the margin. And it's not some magic formula. And you can also improve the way financial markets function; and then people get more access to insurance and credit and capital and things. So, it's just a totally different story. And everything I'm saying about both chickens and cash are very consistent with that theory. And now, the randomized trials which I was proposing we do, on large numbers of people and large numbers of countries in different parts of the world, in a way that we could get at what you're saying is sort of getting at the finer details: saying, okay--not knowing if we can make any general statements but, do we see a general pattern across many types of people in many types of places that chickens tend to be lower return than cash? That, people tend to use cash wisely in many places. And then also, very importantly, to figure out what we call the general equilibrium effects. Or the spillover effects. Like, what happens to the whole local economy when you get this giant influx of chickens, or cash? Like it's good? Bad? And it could go either way. We don't really know. So, there's a really different evidence base. And then, the kind of experiment I was proposing, which costs $15 million dollars or some number like that because it's much bigger than anything that's ever been run, is in some sense designed to get around exactly this concern.

26:48 Russ Roberts: So, that's a nice defense. In fact, you are kind of channeling your inner Lant Pritchett there. When you talked about the accumulation of knowledge, he made this similar argument, which I found unpersuasive. But, I find it a little more persuasive in your case. He was talking about general economic theory that's small--any one piece of economic research may not be that informative but it eventually creates this great base of knowledge. And I think that's romanticizing what economic research does, somewhat inaccurately. But let's put that to the side-- Chris Blattman: Well, if I could just interrupt--one thing is: I don't think that knowledge is accumulated to a consistent understanding of how something works across lots of different areas. I also study--I mean, I'm a professor of global conflict studies. In principle, I spend most of my time studying violence, as well. And, we don't really have a good understanding of what reduces violence. Like the things have not accumulated to a coherent answer. Or if you take the macro study of aid, and whether aid is good or bad, and what its good or bad affects our economics or politics--we don't have a coherent answer. It's sort of cumulated into a mess. That was my-- Russ Roberts: Yeah, that was my--it's my, it's close to my view. Chris Blattman: But there's--but, right. But, other things have turned out--sometimes in certain medical research, and in this case, I think [?] our micro-understanding of poverty turns out, 'Oh, this thing seems to work pretty much similar ways'--you know, we're wrong in lots of details I'm sure. But, more than other things I've understood. And this is why I come on podcasts, you're right, about we should act on this and I don't come on and talk about violence. I don't have a coherent message about what we should do to reduce violence. I don't know that we've accumulated a coherent answer. But, in this case the world works in a simple or straightforward-enough way to have enough evidence, or something about, something the situation is just, I think, points us to more confidence than a lot of other areas. And so, great. And the wonderful thing is it can, like, a lot of people who are in a really, really, really terrible place can benefit from that, in a relatively simple way. This is one of the things that aid does well. Like, just logistically, like just get a lot of stuff out there that seems to work on its own.

29:04 Russ Roberts: This isn't where I thought we'd end up. But let's stay here for a while, because it's so interesting. You are telling me that the aid literature is indecisive--imperfect. Which I think is true. Many people would disagree with you, by the way. I think some people would say, 'Oh, we know exactly what works.' In fact, Lant Pritchett said so: we know it's property rights and free markets and prices. And, while I'm sympathetic to that, I think it actually is more complicated than that. Other people would say, 'We know what works.' Jeffrey Sachs, on the program, 'We just need to give a lot more money. We need to spend it well.' And he thinks he knows how to spend it well. But you are skeptical. Okay. Fine. Chris Blattman: Well, you know, but Jeffrey Sachs--if you want to say, like an African nation--how do we help an African nation go from $1500 a head to $3000 a head? That's not necessarily a hard problem. Or, you know, that's a hard problem. But it's a much different problem to say, how does that nation, what could we do as outsiders or what could that government do as insiders to get to $20,--- a head? Some sort of like middle-income status. And then nobody has a good answer to that. So, sometimes they are just talking about different changes. When you are talking about development, they can be talking to different things. Russ Roberts: That's a great point. Just what I was going to say, actually. So, what I was going to say is that, if you are telling me that at the micro level, we know that it's good to give people more access to financial markets--the ability to borrow--because they are often financially constrained. Or, we know that if we give them things they will be better off--it's not so interesting, really. But it really comes to what I think is the crux of the matter. Which is, the, what I would call, the real essential point that Pritchett was upset about in that previous episode, which is the following. He is claiming that--and I have mixed feelings about this, but I don't care, it doesn't matter; whatever you have to say--he's claiming that the real problem isn't poor people. It's poor countries. These people are in places with bad economies: Bad government, bad economies. And to put a band aid on their economies with a chicken is the wrong thing to be spending time on. We ought to be spending time on [?] we ought to figure out how to liberate their economy, liberate the skills to cooperate together in a market setting--which is how we know, that's [?] how you get to $20,000. When you get to $20,000, you've got to have a vibrant labor market. You've got to have a vibrant skills market. You've got to have people trade and exchange with each other within a country and outside of a country. And, we know all that already. And so that's what we ought to be spending our time on, not whether 5 chickens are going to improve somebody's life. Of course they would. They'd improve mine, too. I'd eat them. I like chicken. My wife, she's a vegetarian, but she'd be happy to see me happy. We know all that. So, what's the--what is the defense of the approach that you are suggesting of these micro-experiments to get people truly out of poverty? We understand--what you're saying is all true. It's not important. Chris Blattman: So, you know, these things aren't in complete contradiction. So, if you want to make--I think Lant's larger--he's got two big points. Lant--I think I've mentioned to you in the past--Lant is, I mean, Lant was one of my first teachers in Development, and still remains sort of one of my idols in Development. And everything of his I can read, I do read, because I think he's got--you know, he has a really, he says a lot of original things and he has his finger on the pulse of these things. And he's made two points here that I think are true. One is that the Development community at large has tended to focus on sort of this weird, extreme form of poverty rather than just thinking of other people who are vey poor instead of extremely poor. So, there's this artificial threshold of $1, $2 a day that distorts a lot of policy. That's fine; I agree with that; and a lot of things--all the chickens and cash stuff I'm talking about, you can ignore that concern. You could say, 'Well, I think the chickens and cash could help someone who is extremely poor and very poor and just a little bit poor.' All these people have limited access to capital. I think that's what we would, what we are learning from the evidence, what we would learn from my experiment. His bigger point is that there is maybe a misallocation of time and policy in academia: That, a lot of people are just focused on the small stuff; that there are these bright, shiny [?]s that come along; it's very appealing to get an answer that a lot of people--there's all this data and computer technology that lets us do, answer a lot of small questions while [?]-- Russ Roberts: You get an article real quick; you get an article on your CV (Curriculum Vitae). Chris Blattman: Yeah. And so there's two--with a profession--the world would be a better place if more smart policy-makers and more smart economists and political scientists were spending more sweat and brains and money on big questions about growth in this case[?]. And then, and so--and I think that's probably right. I think we probably do have a slight misallocation--I think you could make a good argument. But that doesn't mean--it doesn't mean--he sort of made a--he sort of exaggerates as some do and say, 'We should only focus on growth. Most people should focus on growth.' And I think that's wrong for two reasons. One is, I think it's wrong big thing to focus on. And we could get to that. But I think more immediately, I think you can't ignore the poverty. Because, what this says--so listen: If I say, 'I'm going to--everyone needs to be focused on growth.' If we just dedicate all this time, even if he's right, and we were able to make future unborn generations better off, because we're spending all this time and money and brains and energy, on growth, the fact is that there's still a lot of horribly-off people today. Now, if you, if you sort of--some people make that tradeoff. They'll say, 'Listen. Better make 20 generations much better off than trade off making them slightly better off just to make these people less poor.' That's just--someone who is, say, a utilitarian who wants to make the most good for the most people, would say we need to sacrifice today's generation and help these future generations. That's the way to maximize the good. But if you have sort of a different moral calculus--that if you think, for example, that we're only as good as, say, the least among us; or that we have a responsibility to help the very, very least among us even if that means we wealthy people or future wealthy people who are not yet born will be substantially worse off--that's also a defensible claim. And I guess I would say I'm willing to make that tradeoff, to some degree. And I think a lot of--I think that's fundamentally why so much policy is dedicated toward alleviating poverty. That, even if we knew how to make future generations off with certainty, it would still make sense to spend a lot of time worrying about poverty today. That's a--not everyone is going to feel that way, but it's a totally justifiable way. And that's how I feel.

36:03 Russ Roberts: So, I'm not a utilitarian. But I do think we should improve future generations at the expense of the current one--for a different reason. So, let me lay that out. And you can respond. The people themselves who are alive today would want us to do that, because they love their children and their grandchildren. And if I said to them, 'I'm going to give you a choice. I'm going to give you a bunch of chickens and I'm going to make your suffering less dire,' or, 'You're not going to get any chickens. You're going to lead a miserable life, but your children and grandchildren are going to lead very, very greatly improved, materially improved lives,' I think most, if not all people would jump at the chance. And we see that people do that all the time. They take risks, and they impoverish themselves. They risk death to come to richer countries. So, that would be my argument there. But I think, to me, the real issue is just the severity of the poverty. For people who are, you know, near death, that, yes, we need to do something for those people now. For people who are just having a hard time--if we can, I add that proviso of course, if we know how. And I think people should choose morally to do that. But for people who are just uncomfortable, I think they'd be thrilled to live with that discomfort and have their children thrive. Chris Blattman: Right. So, I mean, we can debate this. On some level it's a moot point to--yeah, I mean, it's a moot--sort of the defense of my argument--where we should--and I want--I'm, personally in my life, I agree with Lant[?]; I spend too much time on stupid randomized control trials and on poverty alleviation. It's important, but this is not what I think is really important or really where I can, you know, contribute in some way. So, in some sense I'm unbalanced. I fundamentally agree. But still I think this experiment, this grand thing that I pitched to Bill, Bill Gates, is important. And I would even work on it. The last thing I really want to do--it's really miserable to run these--it's really, really hard and miserable. I hate running these things. It's so logistically and managerially intensive. And you don't think. You just sort of make things happen. And I'm okay at that, I'm pretty good at that. But I don't enjoy it. And I would rather spend my time on something else. But I will do it, if I have to. Because nobody else seems to be doing it. I will do it, because we live in a world not where we are making these grand, philosophical choices, but how to orient aid--and we live in a world where the rich countries and poor countries have made the decision that we are going to spend $10 or $100 billion a year giving the very poorest people stuff. And if I can do a little thing, spend, like 10% of my time for 3 years and $15 million dollars, somebody else's money, to sort of say, 'Guess what? You could be twice as effective and really make an impact on people's lives if you just killed this bad idea and did something less bad,'--that's a huge thing. There's a way to just sort of--given the world we live in, on the margin, there's a handful of studies that I think could really reallocate how this giving people stuff is done. And, and that would be a big thing. And I think that's actually what--I think because I look back at the last 10 years and the cash-transfer work that's been done, including my own experiments--and I say, 'That's the impact this had.' Despite the fact that I wasn't working on what I really wanted to work on, it was important to work on and I actually think that had a lot more immediate impact, precisely because we live in a world where there's just buckets of money, pipelines of money going to these places, being spent poorly. And that can be improved, on the margin. Russ Roberts: Superbly said. I salute that. Beautiful.

39:41 Russ Roberts: Has Bill Gates responded? Chris Blattman: No. And, you know what? Someone pointed out to me-- Russ Roberts: Sound of crickets-- Chris Blattman: Well, I even--I got a chance to--so, someone pointed out to me after I wrote this letter that, 'Do you know that Bill Gates follows your Twitter?' Then it turns out he only follows, like, 300 people; and a number of them are development people, for obvious reasons; and one of them, it turns out, was me. So, I thought--I had no idea. I'm going to direct-message Bill Gates. Maybe he reads his Twitter feed. Like, why else would he only follow it, 2-300 people? So I even direct-messaged him on Twitter--politely, saying, 'With all due respect, this was my [?]; I'd love to have a conversation about this, if you're interested.' And then: Crickets. Russ Roberts: Well, I don't know that he listens to EconTalk; but this could put him over the edge, if he does. You may be getting--when this comes out, you'll probably get a summons. And I'd be happy to interview Mr. Gates, by the way. Chris Blattman: I'm a marginalist, right? I think that every little bit matters. Russ Roberts: Definitely raised the probability. And I want to just say publicly I would love to interview Bill Gates for EconTalk. So, Bill, if you are listening, or if someone who knows you is listening and thinks that would also be a good idea, please get in touch. But it is an interesting question. By the way--this is a sub-point; and you're sort of--I think you have feet in all the various camps: The academic world--there's the academic world; there's the money world--which would be the Gates foundation--and then there's this weird, nether-region of international organizations like the World Bank that has academic people in it, in and out of it--they come and go. So, that whole thing is--they all have their own rules. I'd like to hear you react to the idea that the incentives are what ruin where development economists spend their time. Of course, people have written not-so-nice things about the appeal of traveling to exotic places and having nice meals and Range Rovers to carry you around, and all that. But, talk about the incentives that you experience as an academic, but also as somebody who is in these different worlds, even if you're not--you don't get calls from Bill Gates's cellphone. Chris Blattman: Mmmhmmm. The incentives to go do these kinds of-- Russ Roberts: Whatever it is. I mean, they are incentives that encourage some people to just do all kinds of things--articles on this or that, spend time in a particular country because the World Bank funds it. And all of the--we do what we like, and we also care, most of us do, about what makes the world a better place. As you point out. And you confessed a minute ago that you wish you'd maybe spent a little less time on some of these things and more on the bigger things. So, just reflect on that. Chris Blattman: Well, answering the bigger questions would still put me firmly, even more often, in foreign places. Like, right now, I'm really interested in, I happen to be studying a lot of gangs in Latin America and also in Chicago. And, the thing that's holding me back from being more effective is my lack of tie-in to go and spend time in these places. One of the fundamental incentives is that, I think that to answer important questions about other parts of the world, you have to spend a lot of time in other parts of the world. And you also--not just talking to people and collecting data, but also building relationships with other academics who are there or other policymakers. Because it's not an individual production function. So, that's--answering the question requires be there, big or small question, whatever if you are going to do this right. The incentives in the economics profession, for a long time, and to a lesser extent now, were always against young economists and especially graduate students going and spending lots of time in the field. And in some sense, there is still a discouragement to spend a lot of time often in other countries: still spend relatively little time compared to other academic disciplines. And it used to be zero. There's--an interesting set of people to bring on would be people like Michael Kremer, Chris Utry, who are development economists who broke the path in the, maybe the 1980s and 1990s by spending a lot of time in places like Ghana in Chris's case, and Kenya in Michael's case, doing this kind of work, pioneering it. There are others as well. They sort of stand out in my mind. And showing that you could do important work, and making development economics credible again in the profession. And showing--and sending their students to Ghana--like, this is why--why was I in Busia[?], Kenya running this deworming experiment? Because Michael's student, Ted Miguel [?], he sent to run some experiments and collect data. And Ted did his dissertation there; and he started his own studies in Busia[?], Kenya. And then I showed up at Berkeley, and Ted was this young prof, maybe just one or two years in, who became my dissertation adviser. And he sent me to Kenya, my first semester. And then, why did I end up working on violence in northern Uganda? Because the second time I got sent to Kenya, I was sitting in a cafe, and I met a woman--because it takes 20 minutes or 30 minutes for the Hotmail page to load up, which should tell you what year it was. And so I struck up a conversation with a woman next to me who was doing this qualitative study of children affected by conflict and child soldiers in northern Uganda. And then a year later I was landing by plane in northern Uganda to run a survey that looked a lot like what Ted was doing in deworming except I was studying the effects of violence. And that became my dissertation. And it also so happens that we produced several papers and a marriage, and now two children. Because they're more important than the papers. Russ Roberts: Yeah; of course it is. But the best part about that story is--most unintended consequences are negative. But here we have the positive unintended consequence of a lousy internet access. That you were sitting there for 20 to 30 minutes waiting for your page to load, and you meet your future wife. What a great-- Chris Blattman: Right. But my--then I've sent my students to go work on my project in northern Uganda, and later Liberia; and now, Colombia. And now, they are graduating, they're Ph.Ds., they're getting jobs; and they are doing amazing research; and they are sending their students to these--or wherever they happen to work. And so, this has been this amazing thing that has happened: You talk about the incentives. It's against the grain, against the incentives to go and invest all this time really understanding a place. All the inputs required for all these experiments, or any big study, data--you have to collect your own data in a place like Africa. Most of the time. And so, the incentives are all against that. So, why are people doing it? I think they are really passionate about the questions. And, of course, now there's its own set of esteem[?], and you have your own dysfunctions as a profession; and we're doing a lot of the wrong things; and so on, and so on. But, nonetheless, like, this is still a big, positive change. And I've always said that the most important thing about randomized control trials is not the causal effect that lots of people, we've identified. The effect of like--the important part about the deworming experiment in all this time in Kenya by all these people is not--it's now[?] the fact that Ted Miguel and Michael Kremer could lecture you for hours on Kenyan politics and development in a very sophisticated way that has nothing to do with the causal estimate. Economists now have a much richer understanding of the way world works, how the aid sector works, what the political and social and organizational dysfunctions are from everything from USAID (United States Agency for International Development) to some government in some far corner of the world. There's this rich knowledge that was just not there before that I think is really affecting the way the theories were developing. It's affecting the cognitive teaching; it's affecting the questions we're asking; it's affecting the advice. And I think that's been so much more important than any stupid little causal effect. Russ Roberts: That's great. And I think Adam Smith would be happy about it. Maybe I'm wrong. I like to think of Adam Smith--maybe I'm romanticizing, which I am prone to--but I do think of him as open to the richer understanding of human activity than our sort of blackboard theories; and obviously was a student of many aspects of human life, not just the financial and monetary side. Chris Blattman: Right, right. Russ Roberts: What you are really arguing is that it's good that we've become more like sociology. Which could be true.

48:37 Russ Roberts: I would have argued that the reason we shouldn't work on big picture issues and big picture questions is because we don't know much about them. So, I think most people would argue that governance, political institutions are a big problem. I suggested recently that what we should do with that $15 million dollars, say, is pay a leader to leave, and replace him with someone more--of course, obviously, replace him with another dictator is the problem. But if you could change a political system, that would be the way you'd spend your money. We don't know how to do that. And the idea that we should be spending more time understanding that doesn't necessarily follow; the idea that that's the most important thing. If we can't figure out the levers to improve it, it really doesn't matter. So, what are your thoughts on that? Chris Blattman: I'm more hopeful. I think we don't know a lot about it. I think we also--I think that--I actually teach a class on this, and it turns out Lant Pritchett has just written a book on this as well, with two co-authors. He's focused more on building, on something a bit narrower, which is building state capabilities--which is basically making states more effective. And that includes public sectors and governments. It's actually a free book online, and I think it's actually one of my favorite books I've read this year. So, he didn't talk about that, but-- Russ Roberts: What's it called? Chris Blattman: I think it's called Building State Capabilities. Russ Roberts: We'll put a link up to it, for this episode. Chris Blattman: Exactly. And he even negotiated to be able to get this free online. And I think he has a course, as well, where you can go along this as well. And so, there's both a book and a free course online. And I teach a class. Sometimes I call it "Order and Violence." Sometimes I call it "Political Economy Development." But, it's really about these big questions about saying: You know what? What doesn't--I think Lant would agree with this: Growth is the wrong way to think about this. We don't need more people focused on economic growth. I think we need more people focused on understanding state capabilities, and democratization, and politics in these countries. There's a fair amount already: most other political science--there's a lot of bad research; there's a lot of good research. And I--by spending a lot of the last 10 years reading that research and trying to teach it, and learning it; and when I say I want to reorient what I do, in some ways, I--this is the book I would like to write. Probably I won't write it for 10 years. But one day I will write this book about this kind of political development, if you will. And I think that's fundamentally the problem. And it's hard for me to believe, partly because I've read so much that really has changed the way I think about how the world works; and I think if it could be translated into terms, sort of messages that people could absorb and understand in a less academic way, I think it would be really impactful. So, one, I think we could translate more; two, I think we could do more of it. But it kind of a big--it's a big risk. It's hard to see immediate payoffs. Yet, I guess the reason I think it can't be ignored is, maybe you could put it simply like this: That, China and Brazil and Russia and Vietnam and a whole host of countries that are currently like middle income, or a little poorer or a little richer, are generally growing, you know, at a reasonably quick pace--like, say, I don't know, maybe it's 5% a year. In some years that will be higher; in some years that will be lower. But they are basically on their way to being high-middle, or upper-middle--or even upper-income countries. So, they are growing. And as long as there is no major world cataclysm, then in 20 years, those are going to be basically rich countries. And that's going to be most of the population of the world. And that's probably most countries in the world. But there's a bunch of countries, a couple in, you know, Central and South America, maybe Bolivia, certainly Guatemala, and maybe like a Honduras or Jamaica, and much of sub-Saharan Africa, and some parts of Central Asia that are just not growing at all, or they are growing a little bit but not very fast. Or, they are growing a little bit but there is a lot of inherent political instability and it's hard to imagine that growth lasting for long before there's some tanking[?]. So, it's possible that in 15 or 20 years there will be about 20 or 30 countries in the world that are still enormously poor and unstable, next to what are generally a relatively homogenous group of middle- and high-income countries. And that's going to be a bad situation. It's not--it's a better situation than today, where we've got a lot of poor people. But there's going to be this growing inequality; and these are going to be places of instability. And there's going to be a lot of negative spillovers for the rest of the world. So, Somalia, piracy is one. And extremist groups in the Middle East or parts of Central and West Africa is another. And, they might make life troublesome for us, here. But they are definitely going to make life very difficult for the modestly successful or very successful neighbors they have. And so, that's sort of--these fragile states--that's the unfortunate name; I don't have a better name for them--these fragile states are going to be the fundamental security and development problem in the world in 15 or 20 years. And so, what choice does the rest of the world have but to think really, really hard about this?

54:24 Russ Roberts: Why are you going to wait 10 years? Chris Blattman: Oh, to write the book? Russ Roberts: Yeah, because: First of all, even if you finish it, it's going to be 11; and then it's got to get published--that's 12--and I will be 74 years old. I mean, I'll be here; EconTalk may be here; you're not going to get an EconTalk episode out of it. Write it sooner, and we can talk about it. Chris Blattman: Yes. I-- Russ Roberts: I'm teasing you. I'm half-serious. Chris Blattman: Yes. I am half--I would like to think I could write it in the next couple of years. I guess I just started to put, not into paper, but keyboard to word-document, and talking to friends who have written books. It always takes longer than they think. So--and you know how it is to be in our position, where you are pulled and under different directions. Not least of it is the problem with these randomized control trials is they do crowd out the rest of the things you are trying to do. So, I do--I've made a big, conscious effort to actually reduce the number of things I'm working on so I can create some space for it. So, we'll--people--I put all my slides from my class online. They are descriptive enough that, you know, people can get a sense that if people want to preview, it's on my website, and I know you'll provide a link to those. Russ Roberts: [?] >Chris Blattman: Yes. And, um, so, yeah, we'll see. Maybe it will be sooner. I would like it to be sooner. You know, the thing is, is it's not--this isn't my research area. And I--you know, I don't--every time I spend a few--I've got a huge, I've got a like about 40 books piled up that I want to read that are part of this. And every time I read 5 of them, I rethink what I want to say. And, but, I rethink it a little less each time. So, I'm narrowing down to something where my own views are stable. And maybe that's the wrong way to think of a book. But, if you sort of have spent the last--if you've spent your entire career being, like an applied microeconomist who is doing very, very precise things, it's very, very hard to sort of willfully be sloppy and make mistakes. It's a big change. Russ Roberts: Well, I recommend against that 'willfully sloppy' part. But I think you do have to sometimes say, 'We are not sure but it seems like...'. And I think that's probably okay-- Chris Blattman: right-- Russ Roberts: and to put those ideas out into the public discussion would be a good thing.