Paul Romer, the World Bank and Angus Deaton’s critique of effective altruism


Last week Paul Romer crashed out of his position as Chief Economist at the World Bank. He had already been isolated from the rest of the World Bank’s researchers for criticizing the reliability of their data. It seems there were several bones of contention, including the accusation that Chile’s current social democratic government falsified data contributing to some of its development indicators. Romer’s allergic reaction to the World Bank’s internal research processes has wider implications for how we think about policy research in international NGOs.

One of the big picture issues was education attainment data. In development policy, years of access to education has been a popular proxy for investment in human capabilities. So great has been the reliance on this measure that countries have perversely been able to increase their ‘score’ on the Human Development Index simply by raising their compulsory school age without any demonstration that forcibly keeping kids in school will benefit them. Romer wanted to focus more on measures of educational quality.

The tensions between Romer and the World Bank’s ‘in-house’ economists will be familiar to researchers who have tried to navigate between academia and public policy. Academia, for all its distortions, does not require scholars to defend each and every study or dataset produced by themselves, their colleagues or institutions as true. Indeed, openness to refutation and correction can, in the right context, contribute to one’s reputation as a scholar.

By contrast, careers can be made and lost based on the credibility of public policies in more politicized settings – policies that are frequently ultimately judged on rough and ready survey measures. Challenging the data inevitably means challenging many of the policies justified by the data.

I think Romer’s reaction may bear on the running debate between private philanthropy and government-based foreign aid. For example, for some years, foundations like GiveWell and Giving What We Can have encouraged private donors to support charities that can do the most good in the world for the least cost. Due to the relatively small costs of extending life and improving quality of life in the developing world, they have tended to steer people towards foreign aid charities that either give money directly to the poorest or provide health interventions to vulnerable populations.

Despite enthusiasm amongst many young educated idealistic ethicists and Silicon Valley technologists, this effective altruism movement faces skepticism, from philosophers who see it as too reductionist, and economists who see their approach as naïve, simplistic and ignorant of the harm that good intentions can produce.

Perhaps the most plausible and prominent criticisms come from Angus Deaton, a Nobel Prize winning economist who has specialized in development and public health. Part of Deaton’s critique stems from his concerns with the excess weight that effective altruists tend to place on experimental evidence (randomized field trials are currently a favored research method in international development). The other part is a feeling that private philanthropy is reduplicating the work of government-backed NGOs like the World Bank but in a more amateurish way. According to Deaton, they are re-inventing the wheel, but badly:

[T]he World Bank, the U.S. Agency for International Development, and its European counterparts use the same evidence GiveWell does, and they help to create more. They are also infinitely better organized and funded than the NGOs, so if it were possible to use this sort of evidence to eliminate global poverty, they would be better placed to do so than a handful of wealthy individuals working through NGOs.

In light of Romer’s trouble at the World Bank, I suggest that there is a genuine role for independent NGOs. In so far as private philanthropy ends up duplicating some of the research and activities of these agencies, they could be considered to be ‘replications’ of public agencies that should give greater confidence to their activities. When they deviate, it could reflect error or different priorities. But it could also show areas where independent charities can take into account information that public agencies have so far been unable to include for internal political reasons. Infinitely better organization and resources may yet turn out to be less effective if the internal logic of the agency excludes outside perspectives and the reflectiveness that is more commonly found in scholarly enterprises.

Private philanthropy faces its own biases and coordination problems (see Emily Skarbek’s recent paper for a neat discussion of a perennial problem that philanthropists face). The Gates Foundation has fallen for a number of poorly conceptualized fads and fashions in much of their education policy work. But their presence at least has the advantage of increasing the epistemic diversity of organizations engaged in trying to help the most disadvantaged. At their best, effective altruist organizations can combine a portion of the real-world effectiveness of public agencies with rigorous, yet reflective, research evidence. This is not a combination that government-backed NGOs have yet been able to sustain.

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