Should the US emulate Finland in Education and China in Development?
By Russ Roberts
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.