Piling On the Problem of Poverty

EconTalk Extra
by Amy Willis
Lant Pritchett on Poverty, Gro... David Boaz, P.J. O'Rourke, and...

gravel pile.jpg What's the best way to help the world's poor? Should we give them cash or chickens? Or is the best way to eradicate poverty something else entirely? This week, EconTalk host Russ Roberts welcomed back Lant Pritchett, of Harvard's Center for International Development. Their starting point was a series of "letters" attempting to answer these questions, each initially responding to Bill Gates's plan of providing chickens to the global poor.

Just how bad is the world poverty situation today, and what's our best approach to reducing poverty in the world's lowest productivity areas? Pritchett has his ideas, and Roberts is on board with some of them. What about you? We'd love to hear from you.

Why does Pritchett object to giving cash- or chickens- to people in poverty-stricken countries? What does he mean by making an analogy to a cancerous tumor?
What is the real value of academic research into global problems such as poverty? Pritchett takes his cue from Paul Krugman, and draws an analogy to a pile of gravel. How does Roberts react to this analogy? What are your thoughts on the current state of economic research in development?

Toward the end (43:24) of the conversation, Roberts and Pritchett discuss Adam Smith's "presumption of liberty." To what extent are we in danger of losing that presumption today? If the burden of proof shifts to be on those who favor liberty, what is the best way to make our case?

And...the big question. If you had $15 million to put toward global poverty alleviation, what would you do with it, and why???

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COMMENTS (4 to date)
Tom Coss writes:

Fascinating conversation.

This is the kind of topic worth struggling over. Given we're trying to help people, it's clearly worth making certain that we are.

It's also time once again to become re-acquainted with Hayek's Use of Knowledge in Society

One cannot read it too often.

Steve Abrams writes:

Good conversation, however,there were several points that were underdeveloped.

What is poverty?
This was briefly discussed, but I would contend that poverty is not the same dollar amount in Nigeria, as in the US, or as in Mexico, or as in ...where ever.

Therefore, why is there no normalizing factor such as 20% of the household income of that country or of that state; or perhaps 1.75 standard deviations away from the mean household income. My point is that below $30,000 income per household may be the poverty line in the US, but in Nigeria, the number might be below $1,000 income per household. (The numbers are merely for illustration).

Almost as an aside, there was a discussion of whether intestinal worms might pose a problem with learning. No discussion about the possible problems with worms can be made without a concurrent discussion of the degree of worm infestation. A fecal test showing 1 or 2 eggs per microscope field would show that the individual has worms, but likely would not cause any interference in their daily life. However, a few hundred eggs per microscope field would likely leave the individual with very low energy, very low blood count, low oxygen concentration and therefore, make it difficult for the individual to even consider anything except how to continue breathing till the next day.

Towards the end of the conversation, Mr. Pritchert brought up the idea of "success" when previously he had been using the term "poverty" or "(high) scores." I think it is great to use the term "success", although it needs to be defined better. The reason is that what we all want our own children to be successful. I am suggesting that success is an individualized thing.

Is a person successful if they graduate from college with honors, but are unable or unwilling to get a job?

Is a person successful if they don't even go to college, yet they receive a certificate as a welder from a tech school and then gets a job that allows them to buy a house and provide for their family?

There are many other examples showing that success is very individualized within this country. Perhaps talking of "success" in relationship to the cultures of other countries would be better than talking of poverty or scoring.

Just some thoughts.

Thank you, this particular podcast was most thought provoking.

Robert W Tucker writes:

While I appreciate and find myself in general agreement with Lant Pritchett’s views on the merits of experimentation in ameliorating and even defining world poverty, I have a couple of objections to his argument.

In criticizing the relative merits of the chicken intervention Mr. Pritchett draws a somewhat artificial distinction between the informational value that accrues, on the one hand, to experimental approaches (which, in economics, are more typically executed via quasi-experimental designs) and on the other to observational designs such as one might see in play when teaching a community how to raise chickens. The particulars of his discussion seem to overestimate the power of formal experiments to enlighten while underappreciating the power of simple interventions to do the same.

A minor objection goes to Mr. Pritchett’s struggles with his pile of pebbles analogy. I believe the construct he is searching for is already well developed and empirically validated in psychology. It was the Gestaltists who formalized the idea that the whole is greater than the sum of its parts. Beyond being more elegant, this view is more faithful to Mr. Pritchett’s point. Studies of the accretion of knowledge do not find that individual parts (pebbles) are worthless as Mr. Pritchett suggests that many are. They find that the individual parts are necessary in various ways to the next integrative leap in which all of the seemingly disparate parts are organized into a new way of looking at things. Thus, published papers that fall short of offering a grand new theory or even constructing a robust model are not worthless (although some may be because they are empirically or conceptually flawed); they are to be found in some way assimilated or accommodated by the next grand view.

Kent Humerickhouse writes:

The most critical part of defining an issue for study is reviewing previously researched works, and I think both parties neglected this in the Chickens vs. Currency argument. Sachs and Easterly both have spent considerable time and effort into the condition of their definition of poverty, and have cleared the brush for the future of aid research. With Sachs' push to increase aid to the impoverish countries, the result was much less than expected sometimes even a negative result.

It is wonderful that a single individual could purchase a country's worth of chickens, but the aim is to remove the country from relative poverty and I believe the only way to do this is to invest in the country both financially and militarily. Without the security to protect and produce, people are disinclined to make an attempt at success.

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