Tyler Cowen: prediction

Transcript context

…The people who have worms are pretty poor people. The richer people are less likely to have worms within a given society. Richer people are probably more politically influential. There’s also something about worms — they gradually build up in your body, and one worm is not going to do that much damage. The problem is when you’ve got lots of worms in your body, and even there, it’s going to take time. I’ve had malaria. I don’t think I’ve had worms. I hope I haven’t. When you have malaria, you feel terrible. You go from feeling fine to feeling terrible, and then you take the medicine. You feel great afterwards. With worms, it’s much more like a chronic thing, and when you expel the worms from your body, that’s sort of gross. I don’t think, even at the individual level, do you have quite the demand that would be commensurate with the scale of the problem. That’s a behavioral economics explanation. I think there are political issues and then there are behavioral issues. I would actually say that a huge, huge issue . . . This sounds very boring, but this falls between the Ministry of Health and the Ministry of Education, and each one of them has different priorities. The Ministry of Health is going to be worried about delivering things through clinics. They’re worried about HIV and malaria, tuberculosis, as it should be. The Ministry of Education — they’re worried about teacher strikes. It’s very easy for something to either fall between the cracks or be the victim of turf wars. It sounds too small to be, “How can that really get in the way?” But anybody who’s spent time working in governments understands those things can very easily get in the way. In some ways, it’s surprising how much progress has been made. Here’s one way the political economy works in favor. You mentioned democracy — I think that’s a factor. I actually find — and I don’t want to be necessarily a big fan of politicians — but in some ways, politicians hear how much this costs, and they think they can affect that many people for that small amount of money, and they’re like, “Hey, I want to get on that. Maybe this is something I can claim as an achievement.” We saw that in Kenya. We saw that in India. If I think of Michael Kremer on the issue of economic growth, I see at least three strands. The first is the very famous population paper, where there’s increasing returns with market size. The second is your — I think — 1993 JME paper with Larry Summers, “Good Policy or Good Luck,” where growth rates vary a great amount, and a lot of that is due to luck or positive real shocks. Then there’s the work on education, which would seem to imply growth is pretty stable over time because human capital doesn’t change that rapidly. The current Michael Kremer of 2020 — how do you put that all together and think about growth in the best possible model? Where do you stand now? One insight from the study of growth is, a fundamental driver of growth in the long run is technological change. One thing that we economists should be thinking about more is, what are the institutions to increase the rate of technological change and to try to direct it to human needs? That’s one of the reasons why I’ve been excited about advance market commitments, patent buyouts. I think we’ve got a set of institutions, primarily intellectual property institutions, but also research-funding institutions. We should be experimenting and try new approaches to this and try to improve things over time. I would say that would be one key message about economic growth. Another paper that I’m working on recently with Jack Willis and Yang You — it looks at something that . . . When I was in graduate school in the ’90s, I studied economic growth. Robert Barro was my adviser. One of the things I learned is that there’s not unconditional convergence. Some models predict poor countries would catch up to rich countries, and maybe they do if you take countries that have similar policies or similar human capital, but overall poor countries don’t catch up. I was teaching my development economics class a few years ago and thought, “Well, I better update my slides.” We looked at that again, and that’s totally changed. Actually, after the ’90s, this pattern changed. Now, poor countries are catching up to rich countries. This isn’t just a matter of India and China. This is a broad-based phenomenon. That’s something that I think is very exciting and very encouraging in a world where, within certain countries, there’s been increases in inequality. If you look at a global level, there’s also been this tremendous lifting of people out of poverty, and that’s very exciting.…

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