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brb2432
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Dear Lucy and Sanjay,

Thank you very much for the debate (I do not mean to put a stop to it, on the contrary).

Lucy, to explain the situation, it is possible that the downvotes stem from your form of writing. Maybe people expect that you write a draft, revise it, proofread it, revise again, see if it flows well, reread to see if you are making a clear and convincing argument, consider counter-propositions, incorporate them into your post, and finally truncate the post to about a third of the original writing. In this way, you save effort to the readers (who may themselves revise their posts) and thus the readers may perceive equality in the effort of knowledge-building on this forum. Otherwise, readers may not wish to exert the effort of trying to understand the arguments which are presented unclearly. However, this is just my perspective.

_

Yes, in theory, because of the collective action problem, concentrated interest groups outcompete diffuse interests. Here, however, the concentrated interests could wish India to keep its GSP status: this would make imported inputs for U.S. companies cheaper. By withdrawing the GSP status, the U.S. government is hurting both U.S. consumers and producers, who depend on inputs from India.

Of course, greater sharing of power would reduce the problems of global inequality. This is why effective altruism should be promoted among powerful groups, such as trade professionals, I think. This is not to say that everyone should not adapt this philosophy.

It is true that liberalization arguably hurt economies before, for example during the 1970s, when the IMF institutionalized Structural Adjustment Programs. However, with the rise of global value chain development, the situation today is different. Trade liberalization promotes sustainable development as opposed to prevents it. I argue this above (response to jmason) and you can find arguments for in Richard Baldwin's The Great Convergence and here. Since these sources may suffer from 'Western' bias, please counter me, if possible.

_

Yes, it is interesting how a human life can be simply valued in monetary terms. However, this is not to say that lives of individuals of different income levels have different values. Rather, these lives are valued equally. However, what the calculations of the values of QALY show is how much it costs to provide a quality life-year to an individual. I will clarify this point in my revised draft. It seems absolutely moral, rather, most moral, to me, to spend finances where they provide the most healthy years of life. Although, having enough to provide quality lives for all is even better. Again, that is why EA should spread.

I am not sure if I am sufficiently aware of the exceptions to money = wellbeing rule. For me, money must be invested the most cost-effectively to meet the most needs of the most. These needs can be understood both as those on the Maslow hierarchy and those described by Max Neef.

_

Universal 12-years of education should not be promoted worldwide because there are other more urgent issues that will help sustainable development of nations better than investing scarce resources into education. Plus, schooling in emerging economies may not be adequate (e.g. in relatively developed South Africa, most teachers do not pass exams for grades below those which they teach; in emerging economies, it is common to beat children as opposed to nurture inquiry and understanding; and, education in former colonies suffers from the bias of raising elites (formerly ruling class) while leaving everyone behind without the ability to catch up).

_

Please keep your bold comments. At the same time, do not be offended if people do not reply or downvote (see how many of my posts are left without replies and I am just fine - I did what I could to share my perspective). I can both try to improve the ability of my messages to be well received and try to reach a more receptible audience.

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by brb243
6 min read 77

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Cause prioritizationGlobal health & developmentEconomic growthImpact assessmentInternational tradeInvesting
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Following the recent debate on the effectiveness of systemic interventions, I assert that investments in global trade may be effectively altruistic. If quantified, the impacts of investments in world commerce facilitation may outcompete the effects of funding GiveWell’s charities by unit amounts.

Unlike investments in GiveWell’s charities, financing trade advancement of developing nations enables individuals who live in emerging economies to gain commercial competitiveness and thus join a virtuous cycle of income growth. An increased income enables the beneficiaries to purchase health-related goods and services which are currently provided by GiveWell’s charities. Further, internationally competitive domestic industries enable beneficiaries to find better employment and find market for their informal businesses.

Trade investments cannot be directly quantified by the quality-adjusted life year (QALY) measure. This is because Health-related quality of life (HRQoL) has not been associated with income. However, GiveWell reports that decreased poverty is valued higher than improved health. I rely on literature estimates that value a QALY as 50% of GDP per capita of that nation.[i]

1.

Investing in the negotiation of trade policies favorable to developing countries may present large returns on investment. For example, passing a bill through a registered lobbying firm in the United States costs about $200,000/bill.[ii] [iii] Assume that this bill contributes to a policy that reinstitutes the Generalized System of Preference (GSP) for India from which the United States withdrew in June. This will contribute $300 million to India.[iv]

This number assumes that other nations are not able to export to the United States in lieu of India, due to the lack of international competitiveness of their industries. Thus, the $300,000 million is assumed to be a pure efficiency loss, entirely borne by India.

In 2018, India’s GDP per capita was $2016.[v] That makes $2016 x 50% = $1008 per QALY. $300 million/$1008 = 298 000 (~300,000) QALYs. The cost per QALY is thus 200,000/300,000 = $0.66 per QALY. That is about $0.66 x 69.165 = $46 per statistical quality life (the life expectancy is India is 69.165 years[vi]). Lobbying for favorable trade policy is thus much more cost-effective than donating malaria nets thought Against Malaria Foundation (which provides a quality life for $3,337.06).[vii]

2.

Further, enabling emerging economies to grow their trade capacities may be also cost-effective in the long term. For example, assume that developing and implementing a “one-stop shop” import-export window costs $1,000,000 for a single nation. Further, assume that this would make importing and exporting 1% more efficient. This increased efficiency may take place due to reduction of red tape (paperwork substituted by electronic forms), decreases in travel time that is required to obtain export and import clearances (visiting one government office instead of several bureaus), and facilitation of obtaining trade information.

Additionally, assume that over the next ten years, this nation will export $1,000 million and import $2,300 million annually. These values are based on trade data of Malawi. Malawi exported $1,080 million worth of products in 2015 and imported $2,312 million of goods and services in that year.[viii]

Therefore, due to the “one-stop shop” cross-border trade investment, over the course of ten years, a nation will be able to sell $1,000 million/year x 1% x 10 years = $100 million more products abroad and import additional $2,300 million/year x 1% x 10 years $230 million worth of goods and services from foreign nations. In total, the nation will gain $100 million + $230 million = $330 million.

Since this nation is small, it can be assumed that the increases in exports will all accrue to domestic sellers without affecting world prices. Additionally, presume that the extra imports also benefit to the investing country in their entirety. Either the increased efficiency of import facilities reduces the price for consumers, increasing the consumers’ real income, or the reduced trade barrier enables domestic producers to source cheaper inputs from abroad, making their production more efficient. The increased production efficiency may attract foreign direct investment and further boost the domestic economy. However, I am not taking these possible secondary impacts into account.

Supposing that the GDP per capita (purchasing power parity adjusted) in the investing nation is $1,300 (based on $1,309, the 2018 value for Malawi[ix]), a QALY in that nation is valued at $1,300 x 50% = $650. This value may grow slightly over the next ten years, e.g. to an average of $850.

Thus, the $330 million efficiency gains provide $330 million/$850/QALY = 388,000 quality life-years equivalents. With an initial investment of $1,000,000, a single QALY in that nation costs $1,000,000/388,000 = $2.58. That is $2.58 x 70 = $180 per healthy life. (Life expectancy in that nation is assumed to be 70 years on average over the next 10 years. This is based on the 2017 value of 63.279 for Malawi[x]).

3.

Impact divestments, or diverting funds from purely profit-motivated investments to impact ventures, which enjoy the bottom lines of profit as well as of social and/or environmental return, may also outcompete GiveWell’s charities.

According to the United Nations Development Programme, 60% of impact investors accept returns on par with market returns.[xi] The consulting firm McKinsey estimates finds impact investment returns “comparable to market rate returns.”[xii] Assume that these values are adjusted for risk.

Shifting purely for-profit investments into impact investments does not reduce the investors’ wellbeing if these two types of financial allocation yield the same fiscal returns, adjusted for risk. However, divesting into impact brings additional benefit to those affected by this investment. Since at least 60% of impact investment enjoys market returns, then at least 60% of funds invested globally improve wellbeing of affected individuals without an additional cost.

This value assumes non-diminishing marginal returns on impact investment. This may not be an unreasonable assumption, given the unexplored consumer potential (which grows, rather than decreases with increased wealth) in underserved markets, such as those in impoverished areas.

Additionally, impact investment may yield the highest overall (socio-environmental) return in the poorest markets. However, these markets may provide the smallest return to the investor. Thus, effective altruists may invest into markets of different affluence depending on the relative values these individuals associate to their wealth (and ability to re-invest themselves) to that of others.[xiii]

4.

Unlike impact investment, which offers financial returns to investors, non-profit support of trade competitiveness of disadvantaged groups and nations provides returns to others exclusively. Non-profit market competitiveness may also prove effectively altruistic.

For example, One Acre Fund (OAF), which is supported by TheLifeYouCanSave, describes a 248% return on investment.[xiv] However, the beneficiaries, farmers in developing countries, as opposed to the investors, accrue the entirety of these investments. The 248% value considers all expenses and the medium-term increases of incomes of the benefiting farmers but neglects the environmental impacts of the investments and economic spillover effects. Both of the unaccounted factors are likely positive.

Thus, investing into trade competitiveness of disadvantaged groups may provide quality life years at a negative overall cost, although these investments prevent altruistically-minded individuals from re-investing their returns themselves.

5.

Publishing pro-corporate social responsibility (pro-CSR) agenda in major media costs $44,000 per year.[xv] If one article is published in a year in an outlet which enjoys 62 million readers per year,[xvi] and if every 1,000th reader is influenced to spend additional $10 on socially responsible purchases, on average, every dollar invested generates (62 million readers/1,000 x $10 per reader)/$44,000 = $1.41 of CSR-conscious spending. This constitutes a 141% return on investment. This return may carry vast economic spillovers alongside the supply chain.

Conclusion:

Thus, investing in international trade may be more effectively altruistic than donating to GiveWell’s charities. Negotiation of trade policies favorable to developing countries, supporting emerging economies’ trade governments, for-profit impact divesting, non-profit advancement of competitiveness of disadvantaged groups, and corporate social responsibility advocacy may all provide a higher number of quality life-years than organizations recommended by GiveWell, per unit amount spent.

NB:

This is my hypothesis. If you agree, please help me mobilize the global community to pursue cost-effective international development through trade. If you disagree, please provide constructive criticism. If you have any questions, ask. If you know other cost effective-trade-based development specialists, please refer me to these. I welcome any comments below as well as personal messages through the platform.

[i] Li Huang et al., “Life Satisfaction, QALYs, and the Monetary Value of Health,” Social Science & Medicine 211 (August 1, 2018): 131–36, https://doi.org/10.1016/j.socscimed.2018.06.009.

[ii] Lee Drutman, The Business of America Is Lobbying: How Corporations Became Politicized and Politics Became More Corporate, 1 edition (Oxford ; New York, NY: Oxford University Press, 2015), 86–87.

[iii] Williams, “182: I’m a Reformed Lobbyist. Ask Me Anything,” DecodeDC, February 23, 2017, https://omny.fm/shows/decodedc/182-im-a-reformed-lobbyist-ask-me-anything.

[iv] “Trump Terminates Preferential Trade Status for India under GSP,” The Hindu Businessline, accessed October 7, 2019, https://www.thehindubusinessline.com/economy/trump-terminates-preferential-trade-status-for-india-under-gsp/article27398318.ece.

[v] “GDP per Capita (Current US$) - India,” The World Bank Group, accessed October 7, 2019, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IN.

[vi] “Life Expectancy at Birth, Total (Years) - India,” The World Bank, accessed October 14, 2019, https://data.worldbank.org/indicator/SP.DYN.LE00.IN?locations=IN.

[vii] Chris Weller, “The World’s Best Charity Can Save a Life for $3,337.06,” Business Insider, July 29, 2015, https://www.businessinsider.com/the-worlds-best-charity-can-save-a-life-for-333706-and-thats-a-steal-2015-7.

[viii] “Malawi Trade at a Glance: Most Recent Values,” World Integrated Trade Solution, accessed October 14, 2019, https://wits.worldbank.org/countrysnapshot/en/MWI/textview.

[ix] “GDP per Capita, PPP (Current International $) - Malawi,” The World Bank, accessed October 14, 2019, https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=MW.

[x] “Life Expectancy at Birth, Total (Years) - Malawi,” The World Bank, accessed October 14, 2019, https://data.worldbank.org/indicator/SP.DYN.LE00.IN?locations=MW.

[xi] “Impact Investment,” United Nations Development Programme, accessed September 15, 2019, https://www.sdfinance.undp.org/content/sdfinance/en/home/solutions/impact-investment.html.

[xii] “Impact Investment.”

[xiii] William MacAskill, “Effective Altruism: Introduction,” Essays in Philosophy 18, no. 1 (January 31, 2017), http://dx.doi.org/10.7710/1526-0569.1580.

[xiv] “Our Impact,” One Acre Fund, accessed September 14, 2019, https://oneacrefund.org/impact/.

[xv] “CSRwire Distribution,” CSRwire, accessed September 16, 2019, https://www.csrwire.com/distribution.

[xvi] “Bloomberg Media,” Bloomberg Finance, accessed October 14, 2019, https://www.bloomberg.com/impact/products/bloomberg-media/.

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MathiasKB🔸17
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Thanks for writing this! I'm surprised EA's haven't been more interested in this topic considering The Copenhagen Consensus Center (CCC) has long been advocating reforms for open trade as an exceptional way to aid global development, giving significantly better returns than most commonly considered effective interventions alleviating global poverty.

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brb243
Thank you for pointing me out to CCC! In relation to trade, the Center recommends the conclusion of the Doha Development Agenda WTO round. This round started in 2001 and has been at a stalemate for about a decade. This is because of the single undertaking principle of the WTO: nothing is agreed until everything is agreed (i.e. all 164 WTO Member countries have to agree on every single item of the Agenda). Currently, a small number of countries disagrees on about a percent (e.g. agriculture trade) of the Doha Agenda items (99% of the issues have been settled). Thus, a WTO decision-making reform may be needed to lower international tariff and quota trade barriers. Additionally, the United States is currently jeopardizing the functioning of the multilateral WTO system from which developing economies benefit. Because the conclusion of the Doha round and the general functioning of the WTO is dependent on the decisions of a few governments, it may be difficult to quantify the amount that would influence these decisions. Do you know how the authors determine the cost-effectiveness of concluding Doha? E.g. in terms of certain nations 'buying votes' of other Members?
Matt_Lerner17
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Thanks for writing this! I take the broader point and I think you provide good reasons to think that international trade deserves more attention as an effective intervention.

I may be missing something, but I'm really not sure what to make of that $200k number. It seems low intuitively, but a little examination makes it seem even stranger. In 2018, about $3.5 billion was spent on lobbying. In the 115th congress, 2017-2019, 443 bills were passed, as in, actually became law. So it seems reasonable to say that about 200 bills became law in 2018. That's almost twenty million dollars per bill. And that's in a weird idealized scenario where spending on lobbying gets the bill passed and where all lobbying money is being spent on lobbying-for (not lobbying-against) and where the money is evenly divided across bills.

We have no idea what the distribution of effectiveness looks like, and I totally buy the idea that some bills can be passed with only $200k in lobbying funds, but that would be true at the tails of the distribution, not in expectation.

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brb243
Dear Matt, Thank you for your note. The 200K per bill is a rounded average based on The Business of America Is Lobbying by Lee Drutman (pp. 86-87). This number refers to the amount paid for a bill that benefits a major U.S. corporation, rather than a nation. Additionally, in his "182: I’m a Reformed Lobbyist. Ask Me Anything," Williams reports that (corporate - high-paid) lobbyists may be paid around $500k/year. Thus, 200K would amount to about 5 months of a full time effort of a skilled lobbyist in D.C. However, you may be right that passing a bill that would benefit a nation as opposed to a corporation may be much more expensive than passing an industrial legislation amendment. I will try to consult this number with a professor who teaches lobbying in D.C. tomorrow.
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brb243
According to the professor, India could spend [hundreds of thousands or even millions of dollars] on this issue, up to 5 million. Some countries that hire lobbying firms in D.C. spend a hundred thousand dollars a month. Thus, if it takes about 2 years for the bill to pass, India could spend 2.4 million. However, by that time, India may be so developed that it will not be eligible for the GSP status anymore.. Plus, by that time, the WTO may develop a framework that assigns objective criteria to a country's development status. The U.S. may be either mandated to by the WTO or choose to follow this framework.
Denkenberger🔸7
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Another advantage of increased trade is greater economic interdependence, which I think reduces the probability of conflict. If that conflict were to manifest itself as nuclear war, this could have catastrophic consequences, plausibly reducing the long-term potential of humanity.

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brb243
Thanks! For sure, there is plenty of literature how increased trade reduces conflict. First, an economically-motivated nation will go less likely to a war with one of its important trade partners. Second, this may not be possible, if military of either of the economies cannot sustain itself without trade. This also implies that governments are interested in securing militarily strategic resources (such as energy) abroad. According to Blackwill and Harris (War by Other Means), the foreign investment into resources may increase security within nations that would be otherwise at risk of fighting over these resources in armed conflicts (e.g. the Chinese military protection of South Sudan where China sources its oil). Would you by chance recommend any literature that quantifies the security spillovers of trade investments??
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Denkenberger🔸
Unfortunately I'm not familiar with that literature, but others feel free to jump in!
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brb243
OK, thanks!
Sanjay7
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Thanks for exploring an interesting area. I may be misunderstanding, but I think section 1 is saying:

Donate $200k LEADS TO $300m for India LEADS TO 300,000 QALYs

If this is correct, it would indeed be stunningly good. Apologies if I'm being too sceptical, but I'd like to raise two doubts:

(1) I would be surprised if paying $200k is sufficient to bring about a bill, except perhaps in fairly favourable circumstances. I tried following the sources, but I don't have access to the book, and I didn't listen through the half-hour podcast. If you... (read more)

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MichaelStJules
I think the $300m are gains from trade, and the US would also presumably benefit (although not as much). So, in a sense, yes, it would "magic up" $300m worth of value, because the status quo is the prevention of mutually beneficial trades.
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Sanjay
I think the $300m comes from an article in the Hindu Business Line, which says that "Trump’s decision [to end preferential trade status for India] will cost American businesses over USD 300 million in additional tariffs every year." So this suggests that there is indeed an opportunity cost to the $300m; firstly because the $300m hasn't been magicked up, the $300m could have been spent on something else. This opportunity cost doesn't seem so bad, but another opportunity cost is that without the preferential treatment, the US may trade with other nations. We don't know who those other nations are, so the value of the lost trade is not clear.
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brb243
Hello! Sanjay, for (1), see my reply to Matt above. The $300m is the efficiency loss incurred by the U.S. which will need to either accept increased costs due to the new tariffs that result from the end of the Indian GSP status or pay more for the former imports from India by manufacturing them domestically (more expensively). However, it is possible that other nations export to the U.S. in lieu of India. However, because these countries do not enjoy Indian efficiency, the $300,000 will be paid extra. Yet, my argument neglects that other countries may be able to grow their industries and reach Indian efficiency. This may be possible especially for close competitors to India (maybe Indonesia?), who thus enjoy effective preferential market access.
cole_haus6
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Lant Pritchett (influential development economist) makes a related argument in Randomizing Development: Method or Madness?:

[C]ross-national evidence shows that the four-fold transformation of national development, to higher productivity economies, to more responsive states, the more capable organizations and administration and to more equal social treatment produces gains in poverty and human well-being that are orders of magnitude bigger than the best that can be hoped from better programs. Arguments that RCT research is a good (much less “best”) invest

... (read more)
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brb243
Hello Cole! This argument also advocates for the support of institutions in developing nations, perhaps as a part of systems thinking(?) Additionally, it is plausible that non-RCT methods may increase development outcomes more effectively than RCT methods. However, perhaps RCT-based programs benefit from the credibility that solicits added investment. Additionally, RCT research is highly localized - e.g. what may work in a region of Kenya (where an RCT is run) may not work in another region of Kenya. Thus, divesting RCT-based donations may bring net benefits. Should any non-RCT-founded approaches be supported, if one is convinced (based on their expertise) that these are more effective than RCT-based programs?
MichaelStJules6
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Thanks for looking into this!

However, GiveWell reports that decreased poverty is valued higher than improved health. I rely on literature estimates that value a QALY as 50% of GDP per capita of that nation.[i]

You can see the (perhaps outdated?) moral weights GiveWell used for comparing saving the life of children vs doubling someone's income for a year. They assume value scales essentially logarithmically in income.

https://blog.givewell.org/2017/12/22/uncertain-cost-effectiveness-analysis/

https://blog.givewell.org/wp-content/uploads/2017/12/Fig1_Staff... (read more)

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brb243
Hello Michel, The GiveWell's moral weights are intriguing indeed. I used QALY as opposed to DALY intentionally, because I did not included the decreasing value of a life-year with increasing age (as is the case for DALY but not QALY). Ah, I see! I cited the other study on the same topic. This one values life years in low- and middle-income countries. For Malawi (a least developed nation), the research estimates QALY as 1%–51% of GDP per capita. I took the upper boundary of 50%. Woods, Beth, Paul Revill, Mark Sculpher, and Karl Claxton. “Country-Level Cost-Effectiveness Thresholds: Initial Estimates and the Need for Further Research.” Value in Health 19, no. 8 (December 2016): 929–35. https://doi.org/10.1016/j.jval.2016.02.017. In Australia (based on the research I cited originally), I believe the QALY value was comparable to GDP per capita. Perhaps, based on the argument that the most poor people value other priorities more than personal health (e.g. protect animals by malaria nets as opposed to individuals), in poorer countries a QALY is valued less than annual income while in advanced economies QALY is valued about the same as GDP per capita. - Yes, a more internationally focused U.S. administration, especially in the higher ranks, would benefit emerging economies. _ Yes, actually - thank you! This is a valid point. Rapidly developing India could lose its development status in, for example, 5 years anyway. In this case, after India's industries develop to an internationally competitive level, other countries would be able to develop their economies through effectively preferential market access (relative to India) to the United States. I will look into the counterfactual more and let you know when it is revised!
jmason4
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To what extent do you think the benefits of trade liberalization are contingent on the economies of developing countries moving up the value chain into more complex products in terms of what they're exporting? Is there a non-trivial possibility that trade liberalization deepens existing resource curses (i.e., exporting but not processing raw materials) or is it far more likely that trade liberalization increases economic complexity?

And thank you for speaking to the DC EA group, I enjoyed your talk!

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brb243
Hi! Thanks so much for coming :)) ... I believe that the latter, because it seem like developing nations that are able to attract foreign investment are the ones that grow economically (Baldwin, The Great Convergence). This is despite the deregulation of the market (e.g. lowering worker and environmental standards, protecting IP rights, allowing monopoly, and institutionalizing other measures that benefit foreign investors). First, emerging economies are under no obligation to adhere to international agreements. They can revise these agreements any time, e.g. allowing tech transfer or nationalizing foreign investment. Second, for their public image and because of their Western company standards, large MNCs tend to hire workers formally (however, this may be more prominent for B2C as opposed to B2B companies - B2Bs do not suffer as much public scrutiny, unless entire value chains are scrutinized for sustainability). Relatively to the conditions of informal laborers (e.g. 1/2 of a developing nation's workforce), the formal deregulated employees still enjoy better protection, higher payments, and thus increased ability to escape poverty. Third, based on economic theory, a country that trades less is able to use its resources less effectively. This lowers the nation's growth. Fourth, with the value-added trade where parts can be imported and re-exported multiple times, lower import tariffs of a nation mean lower input prices for domestic processors. Fifth, the countries which are excluded from GVC trade fall further behind their integrated competitors. This also implies that the infant industry argument for protectionism is no longer valid - industries develop through foreign investment rather than though protection from foreign competition. Higher growth should enable further diversification of the domestic economy and domestic investments into higher value-added activities. Yet, even though a nation may grow economically through trade liberalization, it must enact d
branperr3
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I think this might be underestimating how much it costs to implement a new bill. You cite 200k USD, but I don't think that includes the chance that it fails to pass or fails to get a legislator to sponsor it. I think it would be useful to try different numbers for that.

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brb243
OK, thanks! Although these should be adjusted for probability of failure (as per Drutman's analysis), the 200K may still be a bit low. Also see my response to Matt_Lerner. The number may even go up to 5m. I will revise these numbers.
Sanjay3
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I would like to understand the sentence: "I rely on literature estimates that value a QALY as 50% of GDP per capita of that nation" -- would it be possible to explain and/or provide an updated link to a source? (I tried following the link, but it said "doi not found")

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MichaelStJules
Remove the period at the end of the link.
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brb243
Yes, and an updated link of the source that cites the example of low- and middle-income countries (as opposed to Australia that the original link examines) follows: Woods, Beth, Paul Revill, Mark Sculpher, and Karl Claxton. “Country-Level Cost-Effectiveness Thresholds: Initial Estimates and the Need for Further Research.” Value in Health 19, no. 8 (December 2016): 929–35. https://doi.org/10.1016/j.jval.2016.02.017
lucy.ea8-6
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While money can be important, there is no straight line from money to well being.

In terms of money for a significant time Pakistan > India > Bangladesh, now India > Pakistan > Bangladesh

However on health U5MR the order was Pakistan ~= India ~= Bangladesh however today Bangladesh < India < Pakistan For U5MR less is better

The obsession with economic growth is the curse of the world, the sooner that the world gets off the train the better we will all be.

I strongly disagree with Givewell on the importance of money vs life. India on PPP terms

... (read more)
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MichaelStJules16
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One problem with this comment is that you can't cherry pick a few data points to contradict a statistical correlation. That's like remarking that one day has been unusually cold to disprove climate change. No one's claiming that as a rule, more money means more health.

If you want to cast doubt on the correlation of money and happiness, you could check out the Easterlin paradox and the surrounding discussion.

As a tendency, however, wealthier countries spend more on healthcare and tend to have longer life expectancies. If you could not afford medicine necessary for your own or your children's survival, I think you would wish you had more money. If you wrote your comment on a device you own, you're probably already wealthier than 90% of the world population.

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lucy.ea8
Thanks MichaelStJules, this is not a one day phenomenon, it is a long term trend encompassing significant fraction of world population over a 50+ year timeframe. So its worth thinking about why that is the case, I am not entirely sure either, Pakistan with its focus on military has done worse even though they were richer at independence, India has done better because it is more democratic? Bangladesh is an unusual case, they becaume independent 20+ years ater India, they caught up, overtook india with an economy that is consistently worse than India. So what social policies caused this? That is a question worth asking. USA spends twice the money and in ranked lower. https://ourworldindata.org/grapher/life-expectancy-vs-health-expenditure Social policies in other rich countries esp universal healthcare makes the difference? Amartya Sen compares income, health, education indices quite extensively in his book "Hunger and Public Action", and "An Uncertain Glory: India and its Contradictions" No cherry picking, I am following ideas and methods used by the best in the field of human development. (Hunger and Public action will be available online in 10 days, it will become open access)
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MichaelStJules
We should definitely look at other policies, too. I agree. For developing countries, economic growth is still often crucial, since they need money to pay for things like social welfare and healthcare. I think an emphasis economic growth for developing countries is justified, although not necessarily to overshadow all other concerns.
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brb243
Hi! Thanks for the conversation. One problem with single (health) indicators as those determinant of the absolute 'development' of a nation is that these can be targeted by leaders who aim for increased financial assistance by other nations (see example of President Kagame of Rwanda "'farming' Rwandan children"). Thus, broader indices (which take into account income, health, education, equality, governance, and other indicators), such as the Human Development Index, may be better than solely health or solely economic indicators. Is it something that Sen argues? Or, what perspective does she have on development indicators? Also, what do you think of the Gross National Happiness Index?
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lucy.ea8
Sen was an influence in the creation of HDI, yet he was somewhat hesitant to use one index to summarize human well being. Hunger and Public Action has a set of indicators that Sen looked in 1989 (HPA was published at that time). Other indicators to think about are MDG goals and SDG goals. Not all of the goals are equally important, but they point in the right direction, we should think about them. The indicators that I look at to tell the state of society 1. U5MR Under 5 mortality Rate 2. TFR Total fertility rate 3. Expected education levels for school age kids below age 18. 4. Gender disparities in 3) above I have given very little thought to Gross National Happiness Index, it looks like an expanded/altered version of HDI
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brb243
Hello Lucy, Thank you for the reply! These indicators are for sure important!
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lucy.ea8
for those who downvote, please explain yourself its frustrating to contribute to the forum, and have a negative karma the more the forum does it the less I feel welcome
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Sanjay
Hi Lucy, thank you for contribution to the EA forum. I'm sorry it's been a frustrating experience for you. Some questions that came to my mind when reading your post were: * Agreed that there is no straight line from money to wellbeing, but if it *is* possible to invest a relatively small amount of money to generate a relatively large amount of money for the global poor, then that surely seems like a good thing? * I don't recognise your characterisation of GiveWell's views on the importance of money vs life. As I understand it, GiveWell's moral weights consider saving the life of an infant to be around 50x more valuable than doubling consumption for one person for one year, and that rises to 80x if the life saved is of someone aged over 5. (source: GiveWell CEA, August 2019 version, 'Moral Weights' tab) I do agree with your assertion that improving wealth is not sufficient or necessary to improve wellbeing, and wellbeing is what we should care about. However I think I'm missing something about how this comment is adding something of value to this post. (note that I have not downvoted this post, and can't promise that those who have downvoted have been thinking the same thing as me)
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lucy.ea8
Thanks Sanjay, Specifically on this one, trade is one of the fundamental ways countries interact in the world, and how they internally structure their societies. Thats a lot of power, and getting it wrong, can mean a lot of harm. Also if US decides to make give favorable terms to (say) India, it means that the constituency that is paying the cost is dilute and not so powerful, powerful interests would try to stop anything that reduces their power. There is a long ugly history of powerful actors giving nice cover stories "civilizing", "free trade" and doing extraordinary harm. I read it as: if 80 people double their income for one year ~= 1 life move 90 people people from bangladesh to india for one year == 90 * 7000 / (2*3900) ~= 1 life??? if they live another 50 years in india == 50 lifes???? Ignoring discounting a simpler way to think of it is: if a persons income doubles for life then ~~== an extra life??? I find this morality hard to swallow. If this seems moral to you, please explain how. I want to be an order of magnitude away at least, say 500 - 1000 person years of double income is approx 1 life. Why was my original post relevant: here is my thinking First, the post basis itself on givewell moral weights if they are off by 10, then the estimate is off by 10. So cost become $180 * 10 ~= which is in the same ballpark as other give well charities. Second, EA community is dominated by thinking about poverty, and influence from economists, does another post on trade really add value? Is the author aware of the exceptions to money = well being rule? Also read About downvoting: If you had downvoted along with any comment, I would have been thrilled. Mostly I get anonymous downvotes, which is hard to take. When I look at voting on my comments I see that I end up at zero, or negative, but unusually more people vote on the comment. This is an indicator that I am controversial, so a learning opportunity for either me or the down voters. It is somewhat intimidat
brb2432
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Dear Lucy and Sanjay,

Thank you very much for the debate (I do not mean to put a stop to it, on the contrary).

Lucy, to explain the situation, it is possible that the downvotes stem from your form of writing. Maybe people expect that you write a draft, revise it, proofread it, revise again, see if it flows well, reread to see if you are making a clear and convincing argument, consider counter-propositions, incorporate them into your post, and finally truncate the post to about a third of the original writing. In this way, you save effort to the readers (who ... (read more)

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lucy.ea8
on writing. 1) it takes time, 2) this forum privileges english speakers 3) the emphasis on writing becomes a hurdle for people for whom skill in written communication is so-so -- the exceptions to money = well being rule are Jamaica, Costa Rica, Kerala, China (pre 1979 reforms), Sri Lanka, Mauritius, Cuba, South Korea, Singapore, Taiwan, Hong Kong (pre 1999), Japan (Meiji reforms). In all these countries(kerala is a state) focus on basic education preceded health and wealth, this is the fast path to human development. The slow path is by focusing on money, trade, industrialization at the expense of basic education and health. India is an average example of this slow path. South Africa is an almost perfect example of doing the wrong things, and crawling on the slow path. EA community is on the slow path unfortunately. Ignoring the most important component of the human development index, which is basic education. Give Well even going as far as saying "We do not place much intrinsic value on increasing time in school or tests" I fully agree with you that education in say India is geared towards elites, which means college and professional education, while neglecting basic education which should be the emphasis for any society. Regarding the Great Convergence, I will say that it is a great convergence in education first and then everything is a consequence. https://ourworldindata.org/global-rise-of-education
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brb243
Also, the 'Great Convergence' in education is an outcome of increasing global output, which is based on higher trade. _ Currently, in developing countries, teachers beat children. Further, 'educated' children can recite information that is useful to industrialization. However, inquiry and critical thinking as well as the willingness and ability to advocate for a cause is stifled in schools. Thus, before children are en masse enrolled into this destructive post-colonial education system, should this system be reformed?
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lucy.ea8
hey, thanks for the conversation My research shows that it is the other way around, first comes education, which results in better health and finally better incomes. Going back to the very first example that I gave: Pakistan until recently had more money than India, and even today is ahead of Bangladesh. However Bangladesh has better life expectancy than India which in turn has better life expectancy than Pakistan. In terms of education Pakistan has always lagged India and Bangladesh and continues to do so, the money that they have does not seem to have helped. Side note Bangladesh lags India in education, but still is ahead in terms of some human development indicators, they are doing something right that I don't fully understand. -- The problems of education systems are serious, it would be good if they are fixed. But fixing them before children are enrolled means that the kids get no education at all. Even flawed education is better than no education. I note that the person in the TED talk is talking about British system of education, the talk has no relevance in agricultural countries with first generation learners. I agree the educational systems are deeply flawed, but they are not destructive. Whoever is not reached by those flawed educational systems is left behind.
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brb243
Hello Lucy, This actually makes a lot of sense (e.g. if one cannot read they cannot learn further; perhaps even children in severely lacking schools learn to read). Actually, what do you think is the most cost-effective method of providing children (any) education? _ This too, I believe, is the case, at least at the national level. Only for me, education means "productive know-how," or education which is useful to improved health and employment outcomes, so for example education on hygiene, usefulness of hospitals (e.g. here), and education that finds people jobs or enables them to build their own successful businesses. This education may be 'imported' from abroad, for example if highly skilled foreign investors employ and give health insurance to their employees. _ Yes, there may be different factors that come into play when it comes to India, Pakistan, and Bangladesh that determine the life expectancy in these countries. Is Bangladesh (and India?) the darling of foreign developers? Or, is it that Bangladesh deregulates its abundant labor market which leads to cheap labor and thus foreign investment? Does Bangladesh benefit from its coastal location that makes it an ideal spot for distribution of products to Asia, as well as importing inputs for cheap? In India, is it the country's digitization program (such as with IndiaStack) that supports the nation's development? _ Yes, the speaker in the TED talk is commenting on the British system of education. I know it is a bit of a stretch. But, the British system has, I think, remained in former British colonies.
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lucy.ea8
Figure out why they are not in school, enroll them in school, make sure they attend, and finally see if there are any easy interventions that can be made (like teaching at right level). But most important keep kids in school for 12 years of schooling even if they seem to be learning nothing on tests. -- the India case is clear, they did a better job of educating kids than Pakistan. Bangladesh is behind India but not too far behind in educational terms, my guess is that they spend more on primary healthcare than India which can explain the difference in life expectancy.
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brb243
Ok, thanks!!
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brb243
I know it takes time. But the more you practice the less time it takes. This is really interesting. I learned that Costa Rica was able to develop because it passed laws and developed infrastructure which attracted the foreign investment of Intel. _ I also studied that Singapore advanced because of its geographical advantage and trade policy: this enabled Singapore to become Asia's major port. As per this article, Singapore first supported low-skill (little education needed) manufacturing sector through industrial policy. Only with rapid growth, Singapore was able to invest into the education of its labor force and create more sophisticated products. The current comparative advantage in high-skill production enables Singapore to benefit from further investment into education. The question is whether countries that are comparatively disadvantaged in skill should invest into education, in order to progress within the global value chains. Perhaps. This is actually what India does. India invests into its services (high-skill) sectors, such as IT and pharmaceuticals, trying to move its labor force from manufacturing for which little education is needed. But, are you talking more about universal primary education as opposed to sector-specific upskilling? _ With its liberal trade policy, Hong Kong developed because it has functioned as an intermediary between foreign investors and China. _ There have been much more people in poverty in China before 1979 than after. This is because China liberalized its trade. The post-1979 economic growth enabled China to invest more into education. However, the important reason of Chinese growth is that it copied foreign intellectual property. _ I am not sure if Jamaica, Sri Lanka, Mauritius, and Cuba benefited from their prioritization of education. Is it that people in these countries are much better educated than the average citizens of nations of the same wealth (GDP/capita) levels? If so, how do these people benefited? Beca
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lucy.ea8
Meta note: I am talking about primary and secondary education which is equivalent to high school education is US. Some schooling systems have vocational/trade school in years 10-12, instead of college track courses. Either way kids are staying in school for twelve years. The country examples of the fast path that I gave "violate the money = well being rule", and show how some countries had better education and health before they became rich. -- In all the examples that I gave Jamaica, Sri Lanka, Mauritius, Cuba, Japan(Meiji era), Kerala, China, Singapore, Hong Kong, Costa Rica etc.. people became much better educated than their counterparts in other countries with similar levels of income (GDP/per capita) Educated citizens benefitted by being healthier, knowing how to avoid disease, when to go to doctor, how to follow instructions, being better able to advocate for themselves. Knowledge of human biology led to desire to control fertility, which in turn led to use of contraceptives, this also involves negotiating fertility in a marriage, which the husbands usually control in agricultural societies. Being able to understand and participate in modern societies is enhanced by education. -- Not true. Countries that prioritized trade and industrialization stayed on the slow path. E.g. India with its efforts on import substitution industrialization policies, while neglecting basic education and health, this has continued even after opening up the economy with the result that India is far behind China, and is behind Bangladesh in some human development indicators (life expectancy in India is 68 vs 72 in Bangladesh), despite rapid economic growth. Also if trade is so important, why were China and India so far behind at independence? After all China opened its economy to free (opium) trade, and India was ruled by UK, the leading light of industrialization and trade. -- Costa Rica, my knowledge is from HPA (1989) where Sen and Dreze talk about Costa Rica as a model fr
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brb243
Hello Lucy, This is compelling. _ Because authoritarian economies lower worker and environmental rights more easily than democracies. This attracts foreign investment which promoted industrial growth. This is independent of education levels of the host economy (works for both highly skilled and low-skill workers). _ Thank you for the information. This shows Singapore has been investing into education since before it industrialized. Hmm.. this could point on the notion that education precedes industrialization and development. _ I do not see a causation to be proven in this paper. Only correlation is shown. Can you please provide evidence of this? I believe that manufacturing becomes so disaggregated (Baldwin, The Great Convergence) that it comes to the point that one worker 'connects the blue cable' the other worker 'puts on a case' and eventually 'a smartphone is made.' _ This is interesting. It seems like India is doing many good things for its citizens. For example, I heard from Mr. Nandan Nilekani about the ID digitization of India, which, as he reports, supported the growth of the nation. _ I am not sure, maybe skewed statistics of the authoritarian government? Maybe the firm rule of the authoritarian government? _ Point noted. Clearly, I should learn more about the Meiji Restoration in Japan. _ This makes sense that the % of GDP spent on education should take the fraction of school-age population. Perhaps this point should be brought to the World Bank which omits the educational spending indicator adjusted for % of school-aged children? _ I have studied a similar topic in Cape Town. _ Perhaps because educational gains are not as easily measurable as health outcomes? Because donors do connect with others health suffering (also get sick) but do not connect with others problems that arise due to low education (this is less of a problem among affluent donors in affluent economies)? Because educational-outcomes RTC studies have not been pursued
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lucy.ea8
Amartya Sen explains https://www.theguardian.com/education/2003/oct/28/schools.uk4 https://www.ucl.ac.uk/ioe/news/2017/jun/whats-use-education-nobel-prize-winner-professor-amartya-sen-launches-ioe-centre-education-and
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brb243
OK, thank you. The Guardian article cites: "use of the opportunities of global commerce for the reduction of poverty have drawn on help from basic education on a wide basis." This means that education, given favorable trade environment, will reduce poverty [and thus improve wellbeing]. I am glad that the IOE Centre for Education and International Development exists/thrives.
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lucy.ea8
Not sure what you are saying here, under the British, India was deliberately deindustrialized, and made to produce primary commodities. That is the reason why India was so behind. Trade between the West and China had negative effects on China (opium trade). causation in social sciences is very hard, the time period (30 years) and the number of countries (101) give me confidence in the results. "The whole idea that you could somehow separate out the process of economic growth from the quality of the labour force is a mistake against which Adam Smith warned in 1776." https://blogs.lse.ac.uk/southasia/2015/11/19/india-is-the-only-country-in-the-world-trying-to-become-a-global-economic-power-with-an-uneducated-and-unhealthy-labour-force-amartya-sen/ "For India to match China in its range of manufacturing capacity — its ability to produce gadgets of almost every kind, with increasing use of technology and better quality control — it needs a better-educated and healthier labor force at all levels of society." https://www.nytimes.com/2013/06/20/opinion/why-india-trails-china.html Unfortunately, India is doing so-so, Kerala is an exception and one of the best developed states in India today, the rest of India did not focus on education and lagged behind. https://en.wikipedia.org/wiki/List_of_Indian_states_and_territories_by_Human_Development_Index This is not about economic growth, this is about how investments in education and health by the 3rd poorest state in India 50 years ago, took it to the top of the country 20 years later where it has stayed since then. https://en.wikipedia.org/wiki/Kerala_model how about: Poor countries have enough resources to educate their people, IFF there is political will. China had the political will so did Kerala(India), Taiwan, South Korea, Singapore, Hong Kong, Sri Lanka. In all the examples that I gave education is at the root. Sri Lanka, Cuba, Jamaica, and Kerala education was the cause of better health. South Korea, Japan, Tai
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brb243
Not sure what you are saying here, under the British, India was deliberately deindustrialized, and made to produce primary commodities. That is the reason why India was so behind. Trade between the West and China had negative effects on China (opium trade). -This implies that adding more value to exports domestically may enable nations to thrive. _ causation in social sciences is very hard, the time period (30 years) and the number of countries (101) give me confidence in the results. -Well, effective altruists may like proven causation. Otherwise they cannot be sure that education leads to growth. What if growth leads to education? What if something else (maybe international investment??) leads to both growth and education? _ -Are you criticizing that India aims to educate few elites (e.g. in engineering and IT) leaving others behind? Should India sacrifice some of its growth to more inclusive education? _ how about: Poor countries have enough resources to educate their people, IFF there is political will. China had the political will so did Kerala(India), Taiwan, South Korea, Singapore, Hong Kong, Sri Lanka. -Well, if there is political will, countries may choose to invest into issues other than education, if they believe that will help that country's competitiveness. Perhaps, if the SDG goal of inclusive education is highlighted, then India would invest more into meeting that objective? _ I read the book, it only talks about the successful economies and then only about trade. Nothing about the initial conditions, policies and how they created todays countries. -I agree. It hints on the latter. _ -Thank you. I have the book.
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lucy.ea8
If growth leads to education, then why is South Africa behind Jamaica and India, how about Bangladesh > Pakistan? Sri Lanka > Brazil? The country studies and understanding the history of various countries and cross comparisons across time and space help understanding root causes. Frankly EA is far from understanding root causes of human development, if I had to drop one index from HDI I would have dropped money not education. Its very strange EA says education has no value, but they want evidence, thinking, papers, books. If education is so critical to the functioning of EA then why does EA assume that it is not important for the well being of illiterate societies? Both money and education are big items, we can be reasonably sure that we did not miss out small things that have outsize effect. Let's take deworming, it has enormous positive effects (assuming deworming increases schooling by 10+ years/100 $USD). This is great on the marginal side for individual EA's. If one takes the systemic view then the cost of schools, cost of enrolling kids, retention, attendance costs all matter. Put all these things together and schooling costs should be 5% of GDP, there maybe marginal improvements maybe 4% is enough, but we can be sure .4% will not be enough. There is no tradeoff between growth and inclusive education. I gave link earlier "The Demography of Educational Attainment and Economic Growth" "Scenario 4 finally presents another possible direction of improvement from the baseline (which somewhat resembles the case of India), in which half of the population remains without education although 5% have tertiary education, 15% secondary, and 30% primary. This case of elitist education in a context with half of the population being without any schooling does clearly better than the baseline and even better than the universal primary education (combined with 10% secondary and no tertiary), but falls far short of the economic growth implied by universal primary combined w
Robert_Wiblin24
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"If growth leads to education, then why is South Africa behind Jamaica and India, how about Bangladesh > Pakistan? Sri Lanka > Brazil"

Because it's not the only factor?

"Its very strange EA says education has no value"

'EA' does not say this, and I don't know anyone involved in EA who holds such a strong view.

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lucy.ea8
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MichaelStJules
GiveWell also values longevity, or else saving lives wouldn't be so valuable, e.g. their malaria recommendations. The value of increased income should be understood as the value of giving people money, not the only factor that matters.
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brb243
Actually, the QALY measure values years of life at different points in life equally while (most forms of?) the DALY measure values 'younger' years of life more than 'older' years. See: Whitehead, Sarah J., and Shehzad Ali. “Health Outcomes in Economic Evaluation: The QALY and Utilities.” British Medical Bulletin 96, no. 1 (December 1, 2010): 5–21. https://doi.org/10.1093/bmb/ldq033
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