Dani Rodrik's weblog

Thoughts on graduation and the MPAID program

This is graduation week at Harvard, which means all the lawns are perfectly manicured, buildings are carefully scrubbed, and Harvard Square is teeming with former graduates in town for reunions. And of course it means it is raining...

As MPAID faculty chair, I make a short speech to the families of MPAID graduates.  Here is an excerpt:

A decade ago, Harvard and the Kennedy School took a big gamble by launching a new degree program, called the MPA in International Development. The gamble was that if we put together a really rigorous and challenging program in international development--a program with no equal anywhere else--we would be able to attract 65 or so students we would be proud to have in our midst and as our graduates.

We set very ambitious goals for the program. Our aim was no less than a new career path in development. We emphasized both high-level technical training (which is typically the province of Ph.D. programs in economics) and professional, multidisciplinary training (which is the province of master's programs in international affairs or public administration).

We wanted the MPAIDs to combine both types of strengths—to have “hard minds and soft hearts.” Hard minds because development is too important a profession to leave to fuzzy thinking, and soft hearts because development is impossible to achieve without empathy for the people whose lives we are trying to improve.

We wanted to train professionals who were skeptics, but not cynics: that is, always questioning the conventional wisdom, but without the defeatist attitude that says nothing works and public action cannot achieve public ends.

One of my favorite stories is one that I first heard from E.F. Schumacher, whom some of you may know as the author of “Small is beautiful.” It concerns an economist, an architect, and a physician who are traveling together in a train. They fall into a conversation about which one of the three professions is the oldest and therefore the most honorable. The physician says, well of course medicine is the oldest profession. Look, at the very beginning God made Eve out of Adam's rib. This was an act of surgery, was it not? The architect says, hold on, before there was Adam and Eve, the earth and the planets had to be constructed. God made the earth out of chaos. This was an act of architecture. The economist turns to the other two and says: "And where do you think chaos came from?"

Well, we wanted to train professionals who could not only imagine what a better world might look like, but would also help create it—though better institutions, better programs, better policies.

For us, this gamble has paid off handsomely. We could not have hoped for graduates that better embody the ideals of the program--academic excellence, commitment to development, leadership.

In my case, the festivities are attenuated somewhat by the fact that these ceremonies also mark the completion of my duties as MPAID faculty chair.  On Thursday, I hand out diplomas. On Friday, I am a free man!

As any reader of this blog knows, I have nothing but good things to say about the MPAID program and, more importantly, about the students in the program.  But times of transition are also times for stock-taking, so I have been thinking about where we have been falling short and how we can improve the program even more.

So here is where I wish we could have done better...  [the next three paragraphs accidentally deleted]

As for the future, the MPAID program will be in very good hands, so I am not losing any sleep over it.

Wolf on Spence (and Easterly)

I agree with Martin Wolf's take on the Spence commission report on growth, and his put-down of Bill Easterly's column:

Contrary to what Prof Easterly argues, the report makes useful contributions to policymakers’ understanding. The most important is the emphasis on growth itself, underplayed by many advisers and activists in the 1990s and early 2000s. Growth is not everything. But it is the foundation for everything. The poorer the country the more important growth becomes, partly because it is impossible to redistribute nothing and partly because higher incomes make a huge difference to the welfare of the poorest.

Yet the report goes beyond that. It is based on an analysis of 13 countries that have managed growth of 7 per cent a year over at least 25 years. They are diverse: Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand. India and Vietnam seem likely to join this group. These countries have not all sustained their growth: Brazil and Indonesia are important examples of backsliding. These countries are also different in many respects, notably in their size, resources and culture.

Yet, suggests the report, they shared five points of resemblance: they fully exploited the opportunities afforded by the world economy; they maintained macroeconomic stability; they sustained high rates of saving and investment; they let markets allocate resources; and they had committed, credible and capable governments.

These points are consistent with the so-called “Washington consensus” of the 1990s, which emphasised macroeconomic stability, trade and the market. Yet the report’s emphasis is different: it does not stress privatisation, free markets and free trade, while it does emphasise the role of the so-called “developmental state”.

I think Martin was ill-served by the  FT editor who chose his title.  His column bears the heading "Useful do's and don’ts for an economy set on fast growth," whereas a key point of the Spence report--with which Martin seems to agree--is that while we can agree on the key ingredients of growth, the way to achieve these varies greatly from setting to setting. 

As for Bill Easterly, I'm afraid Dingel put it best: "If you're overconfident about development, Bill Easterly pokes holes in your arguments. And if you're modest, he makes fun of you." 

(How) is Africa learning from its mistakes?

There is a useful symposium on Africa at the Boston Review revolving around Ted Miguel's essay, including contributions by Bob Bates, Paul Collier, and David Weil. The questions are: what is driving Africa's recent growth, and how sustainable is it?  Is growth the result of good policies, democratic governance, Chinese investment, or high commodity prices?  And is it a blip, or something more permanent?

Collier offers the simplest answer of all: African policy makers have been learning from their mistakes.

But the growth we are seeing today is not just a result of commodity booms. I don’t think that is the key to Kenya’s pre-election economic success. There is a process at work that does not depend on democracy and is so simple that analysts generally miss it: learning from mistakes. Since 1970 African societies have accumulated a huge stock of experience in how not to manage an economy. For example, from the mid-1970s until the mid-1980s Tanzania adopted regulatory policies that proved to be ruinous. The knowledge they gained through failure is valuable. Tanzania is now one of the best-managed of all Africa’s economies. The European society with the best record of containing inflation over the past sixty years is Germany. It has the best record because it used to have the worst: the experience of hyperinflation immunized Germans from macroeconomic folly.

Miguel endorses this view, but spins it differently, focusing on the advantaged of randomized impact evaluations.    

While it’s natural to focus on such success stories, randomized evaluations don’t always produce positive results about program impacts. But information on failures is just as useful; it allows policymakers to shift funding from the projects that don’t work toward those that do. This is at the heart of the learning agenda that ... is the key to Africa’s economic future. Democracies like those emerging in Africa are particularly good learning environments, settings where impact evaluations can be carried out, their fruits widely distributed, and governments held accountable for applying their lessons to policy. In nations with weaker governance, rigorous program evaluations can themselves serve as a form of political accountability, empowering decent government officials to push for reform.

With impact-evaluation results in hand, policymakers in poor countries will increasingly be able to rely on hard evidence when deciding how to use their scarce resources. We now know the benefits of anti-parasitic drugs in improving school attendance in Busia, and as a result the Kenyan national government has included mass school-based deworming in its official school health plan for the country. Word has spread, and other African countries have expanded their own school deworming plans. In Ghana, over four million children received anti-parasitic drugs at school in 2007.

Learning about deworming is a small step forward on its own. But it will be through many such small lessons—in areas as diverse as health, education, agriculture, governance, and foreign aid—that African countries might learn to sustain and possibly augment their recent economic growth, even after the inevitable fall in global commodity prices.

I think Collier would say that the learning that comes from having followed disastrous macro, trade, and financial policies is much more important than any learning from randomized evaluations--even though the former hardly qualifies as "hard evidence" in the sense that Miguel uses the term. 

I would add that randomized impact evaluations rarely generate usable "hard evidence" for policy makers. As soon as we generalize, scale up, or extrapolate we are in the business of transforming hard evidence into soft evidence.  I wish Miguel were right when he writes: "With impact-evaluation results in hand, policymakers in poor countries will increasingly be able to rely on hard evidence when deciding how to use their scarce resources." Alas, we are doomed to live in a world of soft evidence.  And pretending otherwise may itself end up skewing where resources go.