How can we use the things we share in common to address some of the most challenging problems facing the world? This course examines issues concerning poverty, the environment, technology, health care, gender, education and activism to help us understand better how to initiate positive change.
Breaking out of Cycles of Suffering
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How to Change the World
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Poverty and Development
Discussion about poverty and the relationship of poverty to philanthropy and to foreign aid, actions taken to mitigate the effects of poverty, of major theorists and economists working in this area and , also, a new approach to this subject through randomized experimentation.
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Michael S. Roth
[MUSIC]
So last time, we were talking about, some of the debates around, global
poverty, extreme poverty. And how, aid or
philanthropy might make a difference in elevating people
out of extreme poverty, or helping them elevate themselves out of extreme poverty.
And my hesitation in the way I just said that
is, is really at the heart of a debate in,
foreign aid, and, whether it's through governments or foundations.
About whether there's a poverty trap, or whether aid creates dependence.
And we, we can see this in the, the most famous
example of this is the debate between William Easterly and Jeffrey Sachs.
But I don't want to focus too much on, on a debate between peopl.
But really the issues
at stake here, and it, it's pretty easy to grasp.
The poverty trapped people feel that some parts of the world, and some
some groups of people are, just not quite on the ladder of economic growth.
Remember we talked about how economic growth and is,
is the key to the, alleviation of extreme poverty.
It's not just dealing with extreme suffering, although that
does have a moral claim on us to be sure.
It is dealing with extreme suffering in such
a way as to provide the opportunity for those who
are suffering to experience economic growth to initiate economic growth.
So they are no longer dependent on our
efforts or someone's efforts to alleviate their suffering.
So the argument of those who think there's a poverty
trap, and that aid can get people out of it.
Is that in a region that's say suffering from severe tropical
diseases and dirty water, lack
of sanitation, malaria through from mosquitoes.
That in such an area you need to give a kind of aid that will
break out of the cycle of suffering, the
cycle of oppression, the cycle of economic stagnation.
And by doing that you give people
the, the opportunity to initiate their own economic growth.
That they're stuck in this trap, cycle of poverty, and that aid
lifts them out of the trap and into a more virtuous circle of development.
Not solving all their problems, but letting them
have the the capacity to solve their own problems.
On the other hand you have people who
say that precisely by intervening in those hardship
areas, we create an expert, expectation
of intervention. An expert, expectation of intervention
that then diminishes the capacity of the recipients of aid, to help themselves.
Now, I'm not going to try solve this problem.
Very, a lot of some smart people and people with a lot
more expertise than I have in this area, will debate this still
in journals, academic journals and newspapers around the world.
Our interest today, as we, as we finish up our,
or at least my section on, on poverty and, and aid.
Is to talk about, RCT's randomized control trials.
Which are efforts to not provide one single answer to
whether there's a poverty trap or whether there you create a
culture of dependency.
But to actually test interventions to see how they effect specific communities.
So what we want to have through these interventions are small steps.
That judiciously implemented make differences in the lives of people.
So that they can then initiate the changes to make their own changes.
Even the critics of aid acknowledge the poorest people
in the world do need assistance of some kind.
To, get them out of a cycle of, poverty and suffering.
And that's the Sachs approach, and the approach
of the World Bank, and other, intervening organizations.
It is possible to create economic growth and innovation with
social protection.
And you can see this in many developed nations, as well that combination.
We're going to talk a little bit before we close out my remarks
on poverty and aid, with the work of president of the World Bank.
I've been I've been mentioning his work and the work of
that institution at various points in this in, in this lecture and
now I'd like you to look at his, his brief remarks at the Social Good Summit.
Dr. Kim, was speaking not long after a terrorist
attack in Kenya on, a mall that left some many
people dead and, and was much on the minds of
the audience in New York, during the Social Good Summit.
And so you'll hear him talk about that in his video and, and he'll also talk about
the importance of politics and political energy in creating a social movement
to deal with extreme poverty. He's a, he's someone who's optimistic.
Even though he spends his time in some of the most challenging parts of the world,
he's optimistic because he's, has seen what the
combination of expertise and social movements can, can do.
>> I'm very proud to introduce our next speaker.
This is one
of our keynote listeners, Doctor Dr. Jim Yong Kim from the World Bank.
Please welcome him.
>> Good afternoon everybody.
I'm so thrilled to be back here at the
92nd Street Y. But let me start with a
some reflections. And a
bit of thought about what's happening in Kenya over the last two days.
Many of you know there was a terrorist attack in Kenya at the Westgate Mall.
And as the World Bank Group, we have a large operation in in Nairobi.
And we had, about ten people who were
in that mall when the terrorist attack happened.
Thankfully we
got them all out last night by five o'clock and they're all safe.
But not only, not only our Nairobi staff, but
staff throughout the world bank lost family members, lost friends.
And I just want to reflect a little bit on what this means.
You know the group was Al-Shabaab, and this
was not about Kenya it was about Somalia.
Somalia's a country where
43% of the people live in extreme poverty.
You know, when the Secretary General came to the World Bank and we did a
panel together, and he was speaking to the
finance ministers of 188 member countries of ours.
He said something that will always stick in my mind.
He said that in every country I've every been, the key to peace is development.
You know, when we talk about
a movement to end poverty.
We're not just trying to create a movement out of thin air.
We're trying address the most critical problems on earth.
The Secretary General got it exactly right.
Unless we tackle the 43% of the people in Somalia who are
living extreme poverty The prospects for peace simply won't be very good.
You know the
the movement to end poverty is an idea that's beginning to grow.
Now what will it take to actually end poverty?
Well we you know we at the world bank group we've studied this for
almost 70 years And here are some really critical elements that we know now.
We do need economic growth.
We need economies to grow. We need private sectors to grow.
And we need to create good jobs. And more importantly, the second thing,
those jobs have to include young people, women, the extreme poor,
people who have been left out of the job market before.
Everywhere in the world, we're seeing social movements
popup in places where no one expected them.
I'm an anthropologist, I've studied social
movements, and nobody expected the Arab spring.
Very few expected what we saw in middle income counties like Turkey and Brazil.
The bottom line is, that the poorest want to be lifted out of poverty.
They want to lift themselves out of poverty.
But even the people who are emerging into the middle class, want better
health care services, want better educational
services, want a future for their children.
So that, that, that, that the task to end poverty,
we need to do the, the things that we've always done.
Focus on economic growth. But we need to be inclusive.
But the third thing, the thing that I think could
really change things, is to begin a social movement.
Now, many of you know about the global poverty
project next week, there is a concert to end poverty.
And if you haven't already, look at the, look at the, look at the petition online.
It's at zero poverty2030.org. Z-E-R-O poverty 2030.o-r-g.
.Everyone in the world, leaders, politicians, philanthropists have to
know that all of you care about ending poverty.
I had been part of social movements my whole life.
We I've been working in in global health
in places like Haiti, and in, in Latin America,
like in, in countries like Peru, even in
places like Sibera, where we worked on tuberculosis projects.
We have been part of movements that have been pretty successful.
The global movement around AIDS was one of the most successful movements in history.
We now need a global movement to end poverty.
We need to bring on board the faith based groups.
We need to bring on board
NGOs and CSOs, especially those NGOs and CSOs that are not household names.
The smaller ones.
If we can build a movement and, and make it clear to every single leader in the
world, that we care about poverty and that
we can end it, we can do something unprecedented.
You know, it was only 1990 when 43% of the human beings on this planet
were living in extreme poverty.
We made tremendous progress, and by 2010, we had cut that number down to about 21%.
So five years ahead of schedule, of the schedule that was
set by the Millennium Development Goals, we halve the global poverty rate.
And now we're already below 20%.
But the next stages are going to be the most difficult.
In order to end
poverty by 2030, we have to have it once,
have poverty twice, and have it almost a third
time, in order to get to a level, where
we, where we will feel that we've ended extreme poverty.
Once again, we can do it.
For us at the World Bank Group, IDA, our,
our fund for the poorest, is our most important tool.
But everyone has to get involved. And everyone has to remember that
in the fight to end poverty, we're also
tackling problems like the ones we see in Somalia.
The Secretary General and I just traveled to the Great Lakes region, where
we went to the Democratic Republic of the Congo, to Rwanda, and to Uganda.
And because we have this fund called IDA, we were
able to put on the table an extra one billion dollars.
In a place that
still hadn't really coalesced around the peace agreement.
And it was based on our conviction, the Secretary General's and mine, that for now
and for now on and forevermore peace and development have to be linked together.
Before that's not what we did.
We would go in and sign peace treaties, and
we would wait and see if the peace would hold.
And then afterwards maybe we would go in with some development projects.
We're not going to do that anymore.
Because we know that the key to peace is ending poverty.
You know I have a four year old son, and my
four year old son by the time he's my height, and
he's about to graduate from college, we could have ended extreme poverty.
He could possibly graduate from college into
a world in which no one was living in extreme poverty.
I'm so glad to be here, I need your help,
you guys have fomented so many great things in the world.
What we need right now is a global movement to end poverty.
A global movement to end poverty that just might bring
about peace in some of the most difficult places on earth.
We're counting on you, and I know that we can do it.
Thank you very much. >> [SOUND]
>> So,
I'm here with Dr. Jim Kim, who's the President of the
World Bank, and it's a pleasure to have him here today to talk with us about how
to change the world, Specifically about issues
of extreme poverty and global health and
I thought Dr. [UNKNOWN] we'd start off
talking a little bit about our current situation
in which we see in, from one perspective, rising
levels of prosperity, but also, increasing, levels of inequality.
And I, I wondered if you would talk a little
bit about the relationship of inequality and extreme poverty today.
>> Yeah, first of all, thanks for having me on, this is a great idea.
And I just, you know, salute Michael. Your leadership in taking
on a course like this.
For the World Bank Group, we've been looking at this for some time
and in 2006 we wrote a whole report looking at the issue of equity.
>> Right
>> And that report starts off by looking at
the life chances of two people born in South Africa.
One a black South African and one a white South African.
And then later it compares those two, the chances
of those two people to someone born in Denmark.
>> Uh-huh
>> And as stark as the differences are between the white child and the
black child Both of them have huge differences with a child born in Denmark.
And so one of the things we're focusing on
here is the critical importance of equality of opportunity.
>> Yes.
And this has, this is, ranges from health to education and, and what
we're working very hard for is a countries have got to commit to try
to build equality of opportunity and there's some really
interesting data you know at IMF they show that
countries with higher inequality have periods of growth that
are shorter and ultimately lead to lower overall economic growth.
Belize lee has has has found that high structural
inequality Poses real significant barriers to prosperity, quality institutions.
There's a lot of very
good evidence that suggests that inequality in
a society really does limit overall growth.
Now you know there, there's not uniformity of opinion on this.
>> Right >> Right.
>> It's still an open question But, I think another element that has that
has surfaced recently, and if you look at the at, at the Arab Spring.
Now, what happened there was that there was economic growth.
There was actually
GDP growing at very high rates in some countries.
But what we know is that young people and
marginlalized groups, women, were not participating in that growth.
>> Yeah.
>> The unemployment rates were very high.
And even in countries that have made efforts
to reduce inequality, Turkey and Brazil are good examples.
You know, what we're seeing there is that inequality
of access to quality education, in Brazil for example.
Inequality of access to quality services, this
all led to protests happening this past summer,
>> Right.
>> That really surprised everybody. So there's some really important lessons.
That the economic data seems to suggest that at least
in several very important instances, greater inequality leads to slower growth.
But on a much more direct level, I think all politicians now begin to understand.
That if you allow
inequality to persist, and people really do understand that there's a whole middle
class out there that's enjoying opportunities to
health education, social protection and good jobs.
Then what we know is that everyone has access to smart phones.
People that you would never expect have access to Twitter and Facebook.
And so things have changed for leaders. >> Yeah
>> And so what we're seeing here, is that people now the notion
that health and education, and social
protection were things that were just expenses.
And the most important thing was growth and as long as you had
growth you could let those things go
because eventually the growth would trickle down.
I, I, I think that just about every leader in
the world now has this understanding that growth is extremely important.
But you ignore that bottom 50 or 40%
at your peril, including for your political future.
>> So, you, you mention Bill Easterly's work, and there's a whole school around in
development economics as you know better than I do That, that worries about whether
certain forms of aid or certain forms
of redistribution of wealth, actually create cultures of
dependency or distortions of behavior that have
unintended consequences that do no benefit the poor.
Whereas other people I just did, just did in
this interview with Jeffery Sachs a little while ago today.
Who talk about the, the moral obligation as well
as the economic, rational of liberating people from, poverty traps.
They worry less about a culture of dependency and
more about, the suffering that becomes, a vicious circle.
And
I wonder if you would, you know, how does you, how
do you in the world bank think about this tension between
those who worry about a culture of dependency, and those who
urge us to really address the immediate suffering of the most poor?
>> You know, I have great admiration for both Bill Easterly and Jeff Sachs.
Jeff is a close friend.
Whom I have worked with for years, and let me put it this way.
So I think that the work that Belize truly
has done people like Douglas Semoia have done This
is real, this is important stuff because they're taking
a very hard look at how effective aid has been.
You know I, I was part of a movement called 50 Years Is Enough.
>> Right.
>> And this movement called for the closing of the World
Bank on its 50th anniversary, which was about 20 years ago now.
I have
to say, I'm very glad we lost that argument
>> [LAUGH]
>> But in many ways, Michael, you know we won the argument because
the, what we were arguing was that the World Bank was focused so
much on growth, and they were basically at one point saying Look there's
a formula you gotta get the macro economic fundamentals right and focus on growth.
You know charge for basic health care. Education will come along.
But the most important thing is, reduce your public expenditures, and focus
on your growth model by getting the macroeconomic fundamentals right.
They were right in so many ways.
>> Mm-hm.
>> And a lot of the work that was done, Jeff was part of that group.
>> Yep.
>> Of helping countries get macroeconomic fundamentals right, I
think, is one of the big reasons that during the
last five years, when everyone else's growth, especially in
the developed world, was hit, the developing countries did well.
>> Yeah.
>> And part of it was they
had separated central banks from ministries of finance.
They weren't printing money to solve their problems.
There's so many things that they did right.
You know, debt to GDP ratios had gone down, they were managing
their debt more effectively, so a lot of these fundamentals were important.
But I think what was less appreciated, was that you've gotta get
your growth strategy right, but you also have to invest in your people.
>> Yeah.
>> That was your argument we were making.
We were, we were saying, you know, you
cannot undervalue the importance of investment in people.
And now, here at the
World Bank Group, the thing that's most
exciting to me, is that there's a tremendous
amount of research, on the programs that have
worked and the programs that have not worked.
And you know, what we know for sure, is that
you cannot approach this from an ideological point of view.
>> Yeah.
>> Right? Market based reforms.
Privatization.
You know export oriented strategies is good for everybody.
There's really nothing that's good for everybody.
>> Yeah.
>> So the way we've been trying to, to, to move the
discussion and you know, I, I, I, I would hope that both
Bill Easterly and, and Jeff I know Jeff emb, embraces this idea.
Is we've been talking about creating what we call a science of delivery.
>> Yes.
>> In other words, let's be really
specific about what worked, why, and where.
>> Yep.
>> And then talk about how that can
be taken to other places and scaled up, right?
>> Mm-hm.
>> So let me just give you an example.
Has aid ever worked?
Well, look at my, the country of my birth, South
Korea. I was just there a month ago, right?
And the World Bank made huge investments in,
in our fund for the poor, it's called IDA.
We made huge investments in Korea.
And I was just there, and they were saying that the
World Bank's investments were critical from, in us getting off the ground.
But here's what else they said.
But one of the things that was important for us, is
we actually didn't listen to the World Bank advice all the way.
We invested in health. We invested in education before
anyone thought we could afford to.
And then right after Korea I went to Japan.
The Japanese said we invested in universal health care before anyone
thought that we had any right to even think about it.
And so you look around at the kinds of investments that have been made in people.
And the links to growth.
I mean, you know Turkey, just in the, you know in the early 2000s, made
huge investments in health and dramatically dropped
their maternal mortally rate, their infant mortally rate.
Changes that usually people think take a long time.
>> Yeah.
Yeah.
>> They did really quickly, and they're convinced that it had a
huge impact on their current growth trajectory, which is really quite good.
Now, what Turkey learnt is it, that you know, you're
as good as what you did in the last week.
>> Yeah.
>> Becasue there were protests In Turkey.
So you gotta keep, you gotta keep at it.
But here's, here's what I.
You know, you cannot argue about moral responsibility to end poverty versus a
culture of dependence.
You've gotta step back and, and ask yourself,
what kind of investments can be made that
will enable people To build the foundations for
the future growth that we know is critical.
There are so many countries in the world that
are just not going to be able to fund the
kind of health and education investments that are needed
right now to build that foundation for future growth.
>> Yeah.
>> And so what we, what we would
say is, let, let's move from the ideological and
move to the specific.
There is $125 billion of official develop assistance out there.
I think that we have to just be extremely
humble and grateful for the generosity of the donor
countries but I think it implies we have to
be much more rigorous about knowing what works and why.
>> Yeah.
>> And then, take the responsibility to take those things that
work and take them to scale.
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