Russ Roberts

Should the US emulate Finland in Education and China in Development?

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by Russ Roberts
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Again, I want to thank everyone who responded to the Easterly Essay questions I asked. The last question was:

Roberts challenges Easterly to respond to those who claim that Finland in education or China in economic growth are models that policymakers should emulate. What is the strongest version of this claim that Roberts provides? How would you respond?

I thought the best answer to this question came from Alex Ruch:

Roberts concedes that top-down systems may not work very well, but asks why can't we just take the good features of the systems that have worked and implement them in other countries? The basic idea that Roberts puts forth is sound and that is how ideas are passed around and improved upon in general. We try to emulate the good features of something we like and leave behind the bits that aren't working. However, several problems are introduced when working on the scale of an entire country that a more distributed system overcomes.

The complexity of such a large system makes it difficult to understand exactly which features make it successful and very often spurious sources are thought of as important drivers. Some examples of this are given in the podcast, one of which being that China started from a very low point in terms of economic status, which could play a large role in their growth rate. In the case of top-down education, Finland has very low rates of child poverty and preterm births which are indirectly related to education. So if we can't identify exactly what makes a system successful then there will be some uncertainty in exactly how to implement it in another country with different conditions. The fact that trial and error was necessary to find a system that works implies that we don't understand perfectly enough to be able to get away without any future mistakes. Faced with this uncertainty it is important to let many permutations of the "good" features play out. That is exactly what political freedom and free markets allow. Many ideas can be tried at the same time while being subject to the most rigorous test possible: does it work in practice. This also limits the downside risk of crashing the entire country's economic or education system. The trade-off being that the upside potential is limited because if the features had been chosen correctly everyone would be using an ideal system. But when it is likely that some mistakes will be made, and the stake is large sector of a country, it is more important to work than to be the best.

Finally, even if you could transplant the good features to another country the populations preferences are dynamic. What happens when a populous no longer wants to pursue what the transplanted system was
designed for? If the original goal was to grow at all costs, what happens when it is time to focus more on quality of life? In the absence of an example countries that have made the jump to whatever the population wants, the system will have to adapt. A distributed and competitive system allows the flexibility to do this through the constant selection of ideas by the people. A top-down system will have to make lurches from one system to another, each with the potential to crash, and history has shown this to be unsustainable. This idea is not unique to societal issues. A diverse ecosystem is more robust and can handle changes in circumstance much more easily. Political freedom and markets allow the preferences of the people to shape policy and ideas, and a competitive system allows many different ideas to be tested with only the successful ones surviving.

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COMMENTS (4 to date)
Clover writes:

China's growth model is basically to take a bunch of peasants and send them to factories, where they make cheap products for .50 cent an hour wages. This is "progress" if you are a peasant. Sure, there are other reason's for China's growth, but China's huge, 8 percent a year growth is based on that. No developed country could realistically hope for that kind of growth.

About Finland, demographics matter:

If you look at PISA scores Finland is comparable to other Northern European countries:

anonman writes:

Also, many people for some reason or another forget to mention or realize that growth is material, especially regarding a consumer-based economy. Many places in the US are filled to the brim with buildings already, hence, growth becomes a myth, and a bad one.
And yes, I agree with Alex that our present economy, and hence, the education system, is mis-aligned with the interests of our current society. We want quality of life improvements. At least I do.

Nassim Haddad writes:

I'm surprised nobody mentions that Finland's educative success might not be due to its education system but rather to a much wider cultural context: values (related to family, education, knowledge, etc.), trust into the state, .. lots of "hidden" factors that can't be copied.

Ron Crossland writes:

Thanks, Russ, for the essay writing experience. If I had been listening in a more timely manner, I would have contributed.

I enjoyed the questions the Easterly interview raised and wonder if continuing the discussion - what can we learn from alternate governments systems and what is the role of government in markets - might be found in a couple FEMALE guest interviews.

Specifically I would advance Dambisa Moyo and Mariana Mazzucato as potential guests (I don't see either name on the roster of past guests). Moyo might continue the discussion on how developing countries evaluate liberal capitalism versus state capitalism. Mazzucato might stimulate some thoughts about the interplay between government and free market innovation.

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