This seems like a very good initiative. It's great to see this cause area moving forward.
Now, like some of the other commenters, I'm having some trouble understanding what kind of work IIDM includes. I agree with the earlier comment which said that the framing of IIDM so far has emphasized improving decision-making a lot more than improving institutions. The original 80k article focused mainly on the possibility of correcting cognitive biases (the kind that people would learn about in cognitive science or psychology classes). There was no mention of the large body of academic work relating to institutional design (this would mainly be learned in political economy or political science courses). Until reading the comments on this post, I was under the impression that IIDM was focused only on "how do we improve decision-making within the current political system" rather than "how can we reform the political system to work better". So, for example, I thought that EA-funded organizations working on voting reform wouldn't fall under IIDM.
If you want IIDM to include institutional reform, then I think that should be made more clear. At least for me, one thing that would have helped is if a different name was used for the overall cause area (like improving institutions) and then within that cause area you have IIDM, which is focused only on improving decision-making within a given institutional structure.
However, I'm pretty unsure of how much overlap there is between these two cause areas, so I'm not sure that it's even worth having the institutional reform people in your working group. Does someone working on constitution design have much to contribute to a discussion on how to teach civil servants to better deal with uncertainty? At least in the academic world, these two fields are fairly separate (from what I can tell). Maybe it would better to have these mostly operate as two separate cause areas.
What is the LTFF's position on whether we're currently at an extremely influential time for direct work? I saw that there was a recent grant on research into patient philanthropy, but most of the grants seem to be made from the perspective of someone who thinks that we are at "the hinge of history". Is that true?
This looks great and thanks for posting! One question: how come those other organizations working in this space, who as you note have a track record of success in other countries, haven't expanded to countries like Malawi? In other words, why is lead exposure reduction in Malawi neglected by other actors?
Thanks, this is a very good comment. I mostly cited that article for the literature review, which includes a few papers that argue for a causal connection between learning economics and free-riding. However, I looked into it more today, and it seems like the entire body of work is inconclusive on this question. Here's a more recent literature review on that.
I'll edit that part of the post to be more accurate.
Thanks for the post. One question on the background: is there any data (from the EA survey or elsewhere) about the percentage of EAs who lean towards suffering-focused ethics?
Thanks for the talk and the report. I think this it's a very interesting topic and an important one to work on, given how many socially-minded people seem to care about impact investing.
I have a few more questions in addition to the one about perfectly elastic demand curves:
1. You note that if public markets are efficient then it will take nearly the entire population of investors to divest for the divestment movement to impact stock prices. This seems to make sense: it only takes a small group of socially-neutral investors to drastically increase their investments in the bad company in response to divestment from others. However, if we consider a movement to increase investment in a socially-good company, it seems like this idea doesn't apply. Let's say that the good company makes up .001% of the total stock market. It seems like if .001% of investors are willing to accept lower returns for investing in that company, then they should be able fund the company all on their own. In equilibrium no socially-neutral investors will hold that company's stock, and the stock would yield lower returns than socially-neutral stocks. So perhaps movements which promote investment in good companies are more likely to succeed than divestment movements are.
2. From your research it looks like the current ESG ratings are very low-quality. Given how big of a market impact investing is, do you think that there would be value in trying to improve those ratings?
Thanks for the reply.
You're right that the paper I posted doesn't present direct evidence. I just thought it was important that in their literature review they claim that prior studies show that demand curves are not perfectly elastic (at least in theory. They aren't citing empirical papers).
On the empirical side, I'm surprised to hear you say that there seems to be agreement that long-run demand curves are perfectly elastic. On page 18 of the founder's pledge report, you seem to say that there is expert disagreement on this, and you cite multiple recent studies on both sides of the issue. Has more evidence come out since the report was published?
It seems like you are fairly confident from your research that impact investing will tend to have little impact in publicly traded markets. I briefly looked into the theoretical literature on this, and I'm not seeing why we should be so confident in that idea. For example, this paper from 2019 claims:
"In general, systematic screening of assets based on investors’ preferences leads to a return premium on the screened assets, in equilibrium, and such return differences cannot be arbitraged away by 'neutral' investors".
They then cite four theoretical papers in support of that claim (note: I haven't actually read through these papers. I just glanced at the introductions and the setups of their models. It could be that these are bad papers).
Were you aware of this literature when writing your report? Why should we be so confident in the arbitrage argument?
Thanks for the comment. If differences in careful thinking are the main sources of differences in people's altruistic behavior and those differences can be easily eliminated through informing people about the benefits of thinking carefully, then I agree that the ideas in this post are not very important.
The reason that the second part is relevant is because as long as these differences in careful thinking persist, then it's as if people have differences in values (this is the same as what I said in the essay about how there are a lot of differences in beliefs within the EA community which lead to different valuations of causes, even when people's moral values are identical). If these differences in careful thinking were easily to eliminate, then we should be prioritizing informing the entire world about their mistakes ASAP, so that any differences in altruistic priorities would be eliminated. Unfortunately, I don't think it's true that these differences are easy to eliminate (I think that's partially why the EA community has moved away from advocacy).
I also would disagree that differences in careful thinking are the main sources of disagreements in people's altrusitic behavior. Even within the EA community, where I think most people think very carefully, there are large differences in people's valuations of causes, as I mentioned in the post. I expect that the situation would be similar if the entire world started "thinking more carefully".
Thanks, it's a very nice article on an important topic. If you're interested, there's a small literature in political economy called "political selection" (here's an older survey article) . As far as I know they don't focus specifically on the extreme lower tail of bad leaders, but they do discuss how different institutional features can lead to different types of people gaining power.