Welcome to the Ideas Untrapped podcast - and my guest today is Development Economist Lant Pritchett. He is one of the most incisive and insightful scholars in the field, and his influence at the frontier of development research cannot be overstated. His research mostly focuses on economic growth, its contributing factors, and the development implications for peoples and countries. It was a privilege for me to talk to Lant, and I took the chance to ask him questions about some of the big themes of his research like Migration, Education, and State Capability.
This is a two-part conversation. In this episode, we discussed Migration and Education. Lant provides insights into how the demographic transition in many rich countries has now pushed the migration debate to the forefront, as opposed to when he was writing about it two decades ago. How the Solow model might explain the absence of migration on the development agenda, and why he thinks the ‘‘brain drain’’ is ‘‘mostly a myth’’. He also explained to me how we ended up with the wrong dashboard in education policies and the distinction between assessment and examination in measuring learning. I want to thank Lant for talking to me, and thank you all for always listening. I hope you enjoy it.
Transcript
Tobi;
My guest really needs no introduction. There's nowhere in the world of development, global development, and development economics, where Lant Pritchett is not a household name. So I’ll like to say welcome, and it's a pleasure to talk to you.
Lant;
Thanks for inviting me.
Tobi;
On a light note, let's start on a very light note. What have you been working on recently?
Lant;
So recently I've been doing two things. I've been wrapping up a large research project on basic education in the developing world, sort of K to twelve, and that had been an eight year research project that's just wrapping up. But more recently, I'm trying to ramp up my engagement on labour mobility. The world is facing a real demographic transition point, with the rich industrial world, particularly workforce age populations, just in constant decline while their aging population is increasing. And at the same time we have this massive youth bulge in parts of, not all of, but in parts of the developing world. And, you know, I'm an economist, whenever you see huge differences, you think, well, here's an opportunity for exchange. So the world's biggest opportunity for exchange right now is the West, as we call it, desperately needs workers, Africans definitely need the hide productivity income and jobs. And it's a great opportunity for exchange, but it's blocked by laws and policies that just make migration next to impossible. And I'm working to break that gridlock and get some sensible ways in which we can put willing workers into needed jobs.
Tobi;
I think that's a good launchpad to start the conversation on migration, which you've worked quite a lot on. I read your book Let Their People Come a couple of years ago. As a general question, what do you think we have learned from the time you wrote that book and you were compiling that research and now? Because definitely to me, it doesn't feel like much has changed in terms of the debate. And like you said, migration is such a big issue with economic and political consequences on both sides of the Atlantic. So what have we learned? And if nothing, why is that so? Why is there such a resistance to thinking differently about migration?
Lant;
What have we learned is a great question. Let's start with the demography of this. That book was written in 2006. One thing about demography is you can predict it very far into the future, right? Everybody who's going to be a 30 year old worker in 20 years is ten years old today. And so it's really not that hard to know what the future, the 20-, 30-year future of the labour force is going to look like, because everybody gets a year older. So on one level, we've learned nothing. But on another level, I think there's a current ongoing night and day shift in the urgency of the issue, because things were easily forecastable when I wrote the book - what is it, 2006? 2023 - 17 years ago. 17 years ago, I was saying, look, there's going to be this demographic crisis in the West and you're going to need these workers, but it was far away. So when you ask has anything been learned, it's like, no, but all of the projections for what was going to happen 17 years ago are now 17 years closer. And now, all of a sudden, the Prime Minister of Japan, I don't know if you've seen this, but the Prime Minister of Japan gave a speech a couple of days ago saying, “for the demographic future of Japan, it's now or never.” And it's like, no, it's never. The opportunity you might have had to address your labour force crisis through fertility was 30 years ago. It's over now.
Now the only issue is how are you going to get workers to work in the Japanese economy to fill the jobs that you need, given that you have the demographic crisis you have, which you now can't fix? I wish I had a good word for this or a clever way to put it, but it's sort of like when a child touches a hot stove, do you say they learned something? Well, yeah, kind of. They learned that the stove is hot. But people had been telling the kid, the stove was hot, don't touch it for years. So, you know, did they learn something? Well, kind of. They know it in a different, more intense way than they maybe knew it before, but they didn't learn anything new. So my first response is, I was just way premature with Let Their People Come in 2006 because the problem was still too far away for politicians and policymakers really to focus on it. But now it's like, boom, it's in your face. labour shortages in the West aren't like this hypothetical going to come thing. They're here, they're now. They're everything I do, everything I look at, I think it's here now. And now, like I said, the prime ministers of countries are going, “we really need to worry about this demographic thing.” So on one level, nothing learned. On another level, radical change and attention to the issue because what was easily predictable and was predicted is now happening in a way you can't ignore it.
Tobi;
But even with that, you still hear many of the standard objections to more migration, whether it's in the wages of domestic workers in the host countries and things around cultural integration. So, just do a quick recap for me why these objections are false or untenable at best. Because a lot of people are still susceptible to the same arguments even with copious evidence and years of research debunking them, you still hear these things. And in the age of social media, where information travels very very fast, you know, and it's also easy to appeal to people who might be affected by this and politically weaponize their disaffection. So the standard arguments to migration, whether we're talking about the work of Borjas and people who are built on the back of that, why are they untenable?
Lant;
I mean, we can talk about why they're untenable or many of the factual claims are false, but I think we want to start a step before that. I think the biggest problem with conversation about migration is fundamentally, and I'm talking mainly about the rich industrial West, which West includes Australia and West includes Japan, the rich industrial world. Okay. The problem is, since the early 20th century, these countries have forced two questions to have the same answer. And they're radically different questions. One question is, who are we as a sovereign entity that control a border? Who are we going to allow to be physically present on our territory and perform labour services? That's a clear question. It's a policy question. It's a legal question. It's a regulatory question. You can have an answer to that question. Then there's the separate question which is, who is the future of we? Who are we going to allow to come to our country and on the premise that they're going to become a citizen, become a future one of us and determine the future of who is us? Right? And I feel that forcing these two questions to be the same, you get a complete distorted discussion of the first question. So I think nearly everybody who's arguing about the impact of migration or labour mobility, which is by the way, I try and use two different words…
I try and always use the words labour mobility because when I use the word labour mobility it's clear I'm talking about the first question [which is] who are you going to allow under what terms and conditions to be physically present on your territory and what kinds of work are you going to allow them? What kinds of contracts and labour are you going to allow them to engage in? That's a question we can debate and have independently, in my view, of the question - who are the future citizens of the country? Right? But when you force those questions to be the same, I think nearly all the discussion of wage impacts is complete subterfuge bullshit. Because the problem is if you say, oh, I don't want people coming to my country because I just don't feel they're going to fit in with us, boy, that sounds racist. That sounds exactly why whites in America had restrictive covenants that wouldn't allow African Americans to move into their neighborhoods because they're not like us. They'll change the nature of our way of life. And so most intellectuals in the West are reluctant to actually deploy cultural-based arguments for migration, but it's much more politically acceptable to say, “oh, well, I'm not saying that I am racist and that I don't want people of different races or ethnicities in my country, but it would be terrible for our workers. And therefore, that's why we're not going to do it.” And I think for the most part that's just bullshit. It's just subterfuge. It's just substituting an argument that's politically acceptable but false for an argument that's true but not politically acceptable.
So, I think the reason why these false arguments, quite untenable arguments persist is exactly that. It's that these arguments are factually untenable, but it's easier to justify action in terms of those rather than deal with the concrete issue. And the way in which I'm proposing countries can deal with a concrete issue is start to think about separating these questions. So we have legal mechanisms for people to come and work in the country that perhaps have some path to citizenship, but you don't have to decide the citizenship question immediately when any work authorization is granted.
Tobi;
Of course, there are also people on the other side of these arguments who advocate for more migration and letting more people travel and be able to work. And like you said, they often mix up these two arguments as you have delineated them. So my question then is, is it time for advocates of more migration to maybe swallow some bitter pills, especially on questions of rights? Because I think that is where some of the hot buttons lie. What rights would people have? What are the benefits they are entitled to in their host country? And some of the fiscal implications of that, you know, even though some of you may be a cover to hide larger cultural or behavioral argument. So is it time for advocates of migration to, I dunno, maybe, embrace more pragmatic arrangements, so that we can move this issue forward a bit, you know? What do you think?
Lant;
Absolutely. I think that's a very perceptive question because I feel in the space of people that are debating and talking about migration, refugees and labour mobility, those three kind of different channels, the kind of if we use the word migration just to mean the intent that somebody is going to move permanently from one country to the other country and acquire different citizenship, then there's refugees, and then there's labour mobility. I think there's this tension between more and better. And I'm advocating that the path to better runs through more. Whereas a lot of people in this space want better, but it's not at all obvious that they aren't willing to sacrifice more for better. So I'm an economist, so I believe that if the price price of something is higher, people will do less of it. So I feel if you go to countries and you say every person who you allow into your country to do labour services of any kind automatically has to be entitled to the following long list of entitlements. They'll say, “gee, no, we're not going to do that then, we're going to have robots or we'll do without.” No one really should be talking about abrogating fundamental human rights. I mean, I've never say, oh, people should be expected to in any way, shape or form sacrifice fundamental human rights in order to move to another country. But there's a huge space in between. I like that you use the word entitlements versus rights. I feel a lot of human rights are negative rights. These are things that you can't have done to you. It's just immoral, illegitimate to ask you to sacrifice the privileges against these negative things being done to you. Suppressing your freedom of speech, suppressing your freedom of association, forcing you to change your religion, et cetera. But citizens of the West enjoy this huge amount of entitlements which they're entitled to legally as citizens. But migrants don't necessarily need to become endowed with the full panoply of entitlements that citizens have just because they're in the country. And we accept that for students. If you go to study in the United States, no one says, oh, because he's in the United State as a student, he's entitled to every social program available to any citizen in the United States or a tourist. I guess it’s the lack of imagination here and I love the title of Ideas Untapped. I think there's a lack of imagination here because we're not making the right analogy.
It's like, look, we allow people to be in countries for all kinds o f reasons, like tourism, for students, for passage, to do high level business deals, and we don't expect that to come with this huge array of the complete entitlements of the citizens of the country they happen to be in. And, you know, there's kind of a fetishism about work. Like, if you happen to go to another country and work for three months, that needn't come with the full entitlements of every entitlement every citizen of that country has. And then we just need to have an open and untapped conversation about what is the right line between, for sure protection of rights, for sure limitation of reneging on contracts, of abusing migrants because they're in a difficult legal situation of not being in their home country, but the array of entitlements is a hard question to answer, and countries need to take that on. Okay, if we're going to let people come to our country, what does that entitle them to and in what sequence and how? It’s a hard question that countries need to deal with but I don't think it's impossible question. But it is often made impossible by the insistence of like, no, it has to be perfection immediately. Because if you say that, you act as if you're advocating for better, but I feel you're not advocating for more, and lots and lots of people would love more.
And second, it's not obvious that there is a path to better that doesn't go through more because a lot of the abuse that people suffer is that they're being trafficked to reach these labour opportunities in illegal and informal and undocumented ways, which puts them at even more risk of abuse. So the analogy I use is prohibition in the United States. At one point in the United States, we passed a constitutional amendment, we banned the sale and production and import and everything of alcohol. But then what did we end up with? We ended up with a whole bunch of alcohol being marketed illegally and everybody marketing alcohol was, by definition, breaking the law. And so we ended up with a really, really crappy regulation of alcohol. And the only path to better regulated alcohol was to end prohibition and have it be legal. And I feel we're in this prohibition mode, vis a vis labour mobility, and it just isn't viable.
Tobi;
Sometimes the context within which these debates happen is also ideological, especially in America the right, the left. There's a tiny section of the right that I would like you to respond to their argument, or I should say their sentiments. Maybe I'll fit someone like Tyler Cowen in this category, who are pro immigration but who largely favors high performing technical talent from other countries and not people that can work in the jobs that you argue are actually badly in need of workers in the industrial world, what you call the hard non-tradables. Right? So how would you respond to that? What would you say to them who favour more immigration, but what they want is basically the stem talents of other countries? You know, let them come. Perhaps, they argue, that, productivity is stalling in the United States and to keep pushing the technological frontier, it has to be a large absorption of technological talent from other countries.
Lant;
My first response is that's exactly the inevitable consequence of bundling the two questions. If you bundle the question who are future citizens? And the question, who's going to be allowed to work in our country? It inevitably leads to we should allocate the few scarce slots we're willing to allocate, that inevitably leads to global war for talent kind of migration policies where you're going to attract the best and the brightest out of Nigeria, out of India, out of other places to come to America. And that makes economic sense. My point is there shouldn't be two categories. There should be three categories. Currently the debate happens as if there's two categories. There's migrants and there's refugees. Those are the two kinds of people that move. Whereas my point is we need a third category. In part, we need a third category because as you point out, and as I point out, and this is something that is, I think, completely absent from the debate in the West so far is that the change in occupational demand with respect to some measure of underlying skills in those occupations, it's U-shaped. There's actually been more increase in demand for the low skill, physical, non routine activities and an increase in demand for the super high skill. So if you look at change in wages or change in occupations in Europe, in the US, there's more demand for things that aren't easily amenable to technology and aren't repetitive, like, just to use a prosaic example, like cleaning a hotel room.
Cleaning a hotel room is a very hard, it's not an easily automatable thing because it's different every time, you walk in, things are in different places. And so the result of the technological changes in the West is that everybody's complaining about the falling wages because the middle of the wage distribution has been hit hard by technological changes. But we have a whole bunch of jobs that are needed at the low end that the domestic citizens don't want to fill, and in the US, there's going to be something like a million more needed people in home health care. It’s not a job that any American middle class family is, oh, you need to grow up and be a home health care aid. It's not a super attractive job to the emerging youth, and we just don't have any youth coming into the labour market, so we need to fill those jobs. But if you say to a country, oh, you should determine who you are as a people and who you are as a nation and who your future citizens are, in order to meet your needs for home health care, they're like, no, we want computer scientists, we want data engineers, we want doctors. So what I'm saying is, Tyler's argument is inevitable if you accept the premise that what we're talking about is immediate and expected path to citizenship, labour mobility and the only form of labour mobility is migration.
If you look at what's happened with Canada and Australia, who adopted points systems for their immigration, that's exactly the way it went. You gave points for higher levels of education. You gave points for speaking the language. You gave points for things that were cultural match. Canada has massively benefited from global war for talent kind of recruiting through a points-based system. But there's a whole bunch of other jobs in Canada that you also need to fill. And Canada is dealing with this. It's like, okay, how do we deal with all of these existing [jobs] native born Canadians don't necessarily want and so you're not taking them away from anybody by having more people in here working on those, but on the same type, it's a very difficult political discussion to say, we are going to, in some sense, put the future of who we are as a people at the hostage of the immediate needs of the labour force. So Tyler's arguments make a ton of sense if you accept the premise there's no temporary mobility. Once you allow for rotational or temporary or time limited mobility, which can include path to citizenship, then the whole conversation changes. A fundamental principle of economics that is often ignored is instruments to targets. If you have two different targets, you need two different instruments. And so if we've have multiple needs for immigration, we need multiple pathways. And I think Tyler is right about one pathway. I'm a big advocate of the other pathway. Because I am a development economist, if I say what would really benefit Africa, it's not Tyler Cohen having aggressive American policy to take the best and brightest out of Africa, it's creating multiple pathways for Africans.
Tobi;
On Africa, I don't want to draw into any particular comments on that, but let's move the debate closer. Which is, we also worry about migration in Africa, especially…
Lant;
Oh, within…
Tobi;
Yeah. For example, in Nigeria, there is always a huge debate about the number of Nigerian doctors that leave for the UK every year. Canada is also a big competitor now. Another industry that is causing quite a bit of domestic disruption in Nigeria is software talents, which is a new and burgeoning industry with lots of investments but the talents are moving in droves, which inevitably brings up the issue of the brain drain. Right. I usually cite Sandefur and Clemens work on the Philippines, but I encounter some resistance to that argument that no, no, no, don't tell us about Filipino nurses. So now, is the brain drain, is it a myth or reality? I know that's a bit of a vague question, but…
[Laughs]
Lant;
Well, like, it's mostly a myth, but at the same time, most myths have some grounding in some deep aspect of human reality. Myths that persist are capturing something deep and important. Right. So let's start with the way that it's not a myth. The way that it's not a myth is that if a country is not yet in the position in which there's really rewarding ways for the high talent workers to use their skills, then people are going to leave the country and not come back. And then brain drain is, I think, a significant problem because a lot of the pathway of the the education of the people to become the superstars in software and medicine, capable of moving to Canada, Germany, and the US, was publicly funded. So there is a legitimate concern. The whole premise is we'll educate our people because we'll recoup our investment through taxes when they become more productive people. But if that productivity happens in another place, then, yes, there's a serious problem there. But I think what we've learned from lots of experiences with India, where I live and have been working on and off for over 30 years, eventually there's another rhyming thing that's never going to become as popular as brain drain, and I call it cortex vortex. I think one reason brain drain gets so much attention is the two words rhyme, which is not a good reason for an argument to have credibility. But I'm afraid it's like people [go] “brain drain, oh, yeah. Brain drain, oh, yeah. Rhymes. It must be true.” So I want to contrast that with cortex vortex, your brains moving back and forth. There's a vortex of movement, and I think India undoubtedly has benefited from the fact that the early migration out of India into America was permanent. These people left India. But then, as India changed its economic policies, became a more dynamic place, the rotational mobility that there were trained Indians in both places that you could establish the connections, that you could create essentially huge software firms that were essentially US firms based in India. Meaning. All of the revenue was in the US. All of the work was in the US. But the work was being done in India. That was a consequence of the previous establishment of connections.
So I think, on net, the benefits of vortex cortex, when countries become sensible and viable places to do business, exceed the risks of brain drain. So, not that there can never be a brain drain situation, but the brain drain situation is often a much deeper problem with the country. And when the country changes, you can move from brain drain risks to cortex vortex benefits. And I think that as a country, in Nigeria, I would be saying, well, look, we really should be thinking about why software engineers aren't setting up businesses in Nigeria much more than worry about losing Nigerians to the US. And moreover, the more Nigerians we have going and working in the US, eventually it is going to benefit Nigeria in the long run by creating the possibility of connections. The third issue. I realize I'm giving long answers, but the third issue is an issue that Michael Clemens has raised and has documented is if there were viable, again, time limited pathways, then the net effect of investment in training in these things can far exceed the drain and hence you actually get more skilled people from the possibility of migration. So if you look at the Philippines as an extreme example, like if brain drain were true, Philippines should be desperately short of nurses because there's Filipino nurses all over the world. Exactly the opposite, because Philippine nursing schools train a whole bunch of people with the promise and premise that some of them are going to go work and get jobs as nurses in other places. But the net number of nurses trained versus the net number that actually go abroad is very small. So the opportunities for Filipino nurses to work abroad have dramatically increased the supply. And so there's way more nurses, we need to think of the long-run endogeneity of the number.
So again, people's ability for counterfactual is often very limited. They see a Filipino nurse working in the Gulf and think that nurse could have been working in the Philippines, so therefore it's created less nurses in the Philippines. And they have a very difficult time imagining the more complex counterfactual of well, that nurse actually created five or six additional trained nurses who are in the Philippines because they got trained as nurses and went abroad for a while and then came back and worked in the Philippines. Or never got the opportunity to work abroad. So the net brain creation is a huge driver to the extent that these very high returns to possibility of going abroad increase the total creation of supply often gets completely ignored in the brain drain discussion. So I'm sure a lot of Nigerians are investing in their software skills in the hopes of working abroad. And the net effect of software skills available in Nigeria may well be hugely positive, even though you can point to lots of individuals who leave.
Tobi;
One evidence that you're having a conversation with Lant Pritchett is if his answers always lead you to your next question. Speaking about the cortex vortex now. There are people who argue, and sometimes they toy with a very horrible idea of limiting emigration in African countries, especially emigration of highly educated, highly skilled people because of the fear of brain drain. And one argument that I've heard is that there is less incentive for national development if your brightest and the best leaves. The political incentive is for the ruling class to keep looting. They have no incentive to fix anything. I mean, citizens get educated, they grow up, they leave. Nothing about the political dynamics of the country changes. How would you respond to such people? How would you tell me to respond to such people?
Lant;
I have to say there's two levels to this. First kind of this is getting beyond my pay grade, so to speak. It's like the true dynamics of how countries come to do national development in this fourfold transformation that I talk about, of the politics, the society, the economy, and the administration, it's a huge, complicated historical transformation. And I'm not at all convinced forcing your best and brightest to stay in the country because they'll be really unhappy, and therefore, by being unhappy, they're going to play a positive role in the political dynamics is a plausible story to first order at all? I don't know. Maybe. But it's hard to point to the cases where by not allowing these people to migrate, they instead of becoming a Nigerian doctor working in Canada, they became this path-breaking political transformational figure. And a very striking counterexample is Gandhi in India. Came back to India when he was in his 40s, having spent a significant amount of time in the UK and a significant amount of time in South Africa. You could have said, oh, man, if we had just forced Gandhi to stay in India, things would have been so much better. And there are a number of significant examples of people who went abroad for a period and then came back and made a positive difference, too. So that first one, it's like, kind of on first order sounds plausible, but I don't know of any either historical, or social or political or economic solid evidence that it's true.
Part of my brand is skepticism. Just because it sounds plausible doesn't mean it's true. First of all, yeah, that sounds plausible, but I'm not sure it's true. Had Gandhi not been allowed to go study law in the UK, would India have in the long run historical trajectory, be in a better place? I don't know. The actual historical thing was, and I feel embarrassed as someone who has lived in India for a long time, but I think he was 44 years old before he came back and became a prominent and effective political advocate in India. And who's to know that that experience of living broad didn't radically increase his productivity as a transformational political leader? So that's the first thing I'd say. Second thing I'd say is I have these fundamental liberal tendencies that forcing people, even if it's good for the country, forcing people to do it, makes me nervous.
Tobi;
Yeah.
Lant;
Even if I did accept that it were true, that it would be marginally better for Nigeria if these people didn't go off and work in other countries, putting that burden in a coercive way on the individual makes me nervous. Just makes me nervous. Because how did the burden of Nigeria's national development transformation fall on this person just because they happen to be a good programmer? That's not at all an obvious thing. And then the last point I want to make is, you know, I sometimes want to promote the analogy that human capital is a lot like physical capital, right? And on this, both sides have been completely hypocritical in the sense that when Westerners make this argument, I go, hey, until you guys start refusing to take Nigerians physical capital, when Nigerians want to invest in Swiss banks or British banks and say, no, this physical capital should be forced to remain in Nigeria to promote the national development of Nigeria and so we should ban Nigerians from being able to put money in Switzerland because it would be better used there than in Switzerland. Until you're willing to make that same argument, I'm pretty sceptical that your argument a Nigerian should be forced to remain in Nigeria is really a principled argument. Because analytically, it's exactly the same. And yet the West is like, oh, yeah, yeah, all of the money that wants to roll out of Africa into Swiss, and British and other banks [we’re] super happy to take it, even though exactly the analytically same argument can be made as, oh, this money should be better invested and if we force people to invest their money in Nigeria, they'd be more aggressive about creating a better investment climate. But the West is fully complicit in taking all the money that wants to come out of Africa, and yet when it's people, all of a sudden they acquire principles. And then, secondly, the same thing for the country, it's like, look, if you're losing physical capital, you might want to look at why people don't want to invest in Nigeria and create a better investment climate.
Tobi;
My final question on migration, before we move on to another baby of yours - education. So as a development economist, and also you've written about this, why isn't migration so much on the “development agenda”? I don't know any development organization or any communique or report that is so big on migration as a development policy. Policy that radically increases the welfare and the incomes of the people, like you said. Because sometimes development is usually framed more as a country thing than the people. So why is it missing on the agenda?
Lant;
I think there are lots of reasons. And let me start with the one that is less, I think, discussed and deserves more consideration. And the answer is the Solo model.
Tobi;
Okay.
Lant;
So let's talk economics first, right? The Solo model, which I don't know how many of the listeners are actually into economics, but it was the dominant model of economic growth. And it said that economic growth is a combination of this thing called investable stuff. We'll call it capital. And that includes human capital and infrastructure and all kinds of physical stuff. I'm taking human capital as a physical stuff. So there's capital and then there's the productivity with which capital is used, which we'll call A. And that was kind of the dominant model of economic growth when development organizations in the 1950s and 60s came into being. Now, in the Solo model, and I had the privilege of actually being taught by Bob Solo, so I can speak with some authority about how Bob Solo talked about it. A, was regarded as blueprints. This total factor productivity that interacted with capital was ideas that were in the air. It was regarded as technical. Now, if you think about, therefore, how the dynamics of growth were going to work, is A, this technical blueprints of how to do stuff was going to diffuse very fast, right? Because after all, if I have a blueprint for how to build a power plant or build a dam or build a highway or run a coffee processing plant, that blueprints can transfer across countries really fast. So if you scratch what was the intellectual kind of environment in which the bones and DNA of places like the World Bank were built? They were built on a model that ideas were going to diffuse fast. Well, if ideas diffuse fast, then the productivity of factors in the places that now have high A but have low human capital and low physical capital was going to be super high. And so the whole problem was how do we invest in this super high productivity, physical and human capital in these places with high A and low K? That was the whole model of development. Right? Now, what we have learned and this we really have learned in the sense that we didn't know it and now we know it, is what we have learned from five decades of research on economic growth is that model isn't exactly wrong. Exactly wrong. A, is what hasn't converged. If you ask why hasn't Nigeria had the gross prospects that we would have hoped and anticipated for Nigeria, it's because A stayed low. Not because Nigeria and we'll get to this when we get to education in two minutes, but not because Nigeria has necessarily had radically underinvestment in human capital or radically possibility for investment in physical capital. It's that A didn't diffuse, and it turns out A isn't blueprints. A is much deeper things about how you can make factor productivity in a country which go way beyond do you have the blueprint to build a power plant? Right. So the first reason why development wasn't originally part of the development agenda is that in the Solo model, we should have had human capital flowing to Nigeria because the return to factors should have been super high, because A should have been super high relative to the level of K and HK. So before we get into more cynical, and hence probably more realistic and true positive models of why it's not on the agenda, I think there was an intellectual flaw about economics itself and how it thought about growth that I don't think we've pointed out strongly enough, how completely, totally wrong it is, and how it leads to radically different assumptions with how important migration is going to be. And in the Solo model, there was no need for migration. Like, once A was there, the returns to HK were going to be phenomenally high, not low.
So we really have learned from constructing data sets and just decades and decades of growth research, that A doesn't converge. And that is a huge, huge puzzle. Right. Because if A were, as Bob Solo thought it was, a set of blueprints, it should have diffused very fast, and instead it's been not diffused. So that's an economic-based argument for why it wasn't on the development agenda. And the problem is, like I say, the DNA and bones of the World Bank were built because if you ask, why does the World Bank focus on moving money? Well, again, in this model that A has converged and we need K and HK to catch up, what these countries need is money. Right. Anyway, and it's very hard to change an organization's DNA. Then there are the obvious, and I just want to point out, I'm not being completely silly and naive… it's also the case that most of the development organizations have their intellectual agendas dominated by the rich donors, and the rich donors never really wanted it. Since they never really wanted it, it was always easy to push it off the agenda. Now, on the plus side, the World Development part of the World Bank, which is often a very flagship document, is this year on migration. So for the very first time, the World Bank is going to solidly bring development issues and migration issues side by side. This is another way in which I think the overall environment for discussing migration is going to change radically, I think, in the next ten years. And I think this is a harbinger of that.
Tobi;
I look forward to reading the document.
Lant;
I've seen drafts of it, and it will be good.
Tobi;
Okay, moving to education now. Yeah, so I'll start this way. It's one of those things that is super sexy to talk about politically. We are in [an] election season now in Nigeria, and every candidate is saying, I'm going to invest in education. We need to fix basic education. We need to make our education work. If we make it work, then this and this and X and Y will not happen. There will be no crime. People will no longer kidnap. They can, you know, a lot of things. The benefits of education seems intuitive. But what frustrates me, whether you're talking to policymakers or investors or even my friends who talk about education, is, other than researchers like yourself who are working in the field, almost nobody stops to look at the evidence. Nobody. And then we've ended up with this, to use one of your phrases, we ended up with the wrong dashboard for education, where we are basically measuring schooling and not learning. How did this happen? You can’t talk about human capital without talking about education. So how come we are still measuring the wrong things? How come countries are putting in money, and there’s basically nothing to show for it?
Lant;
Wow, okay, well, that was a long set-up. So I'm writing, like, one of these efforts where a variety of people are getting together, writing about different topics, people are writing about infrastructure and other things, and I'm writing about education. And I start by saying I feel that the field of education is the field in which more false things get set than any other domain. Just completely, totally, obviously false things. Perfect people are perfectly happy to repeat them again and again, year after year, decade after decade. So let me start with the most positive possible spin on it. The most positive spin on what's happened with schooling and education is that if you go back again to the origins of decolonialisation and these newly independent national governments come in and they have control of policies for the first time, it was obvious to everyone and completely accepted that the education level and if now by education we mean mastery of certain capabilities. If we define education in some sense as a vertical axis of, we want them to have skills and capabilities and values and dispositions that are going to contribute to national development, how many years of schooling are going to do, right? There's two ways to increase the stock of, kind of, skills and capabilities. One is more kids in school. One is more learning per year. Well, in the 1960s, it was obvious more kids in school was an easily available, doable, and viable way to do that. You could just push more kids through school, and as long as you push them through at roughly the same level of skills per year, you've got more of it. Right? And every time either national leaders or global leaders or people raised the quality issue, the response is, we'll cross that bridge when we come to it. There was a lot of nervousness that a lot of the early pushback against excessive expansion in the education system was really elitist nonsense, right, that, oh, these people don't really need to be educated and we should reserve education for the elite. And so it was easy to create this debate where the people talking quality were hidebound traditionalists that were anti-egalitarian, and the only acceptable position was [to] expand schooling. And so to some extent, people kept saying, we'll cross that bridge when we come to it. We'll cross that bridge when we come to it. We'll cross that bridge when we come to it.
So the reason for starting with this positive thing is, hey, we're now at the bridge. Like, around the world, nearly every kid goes to school. Like, something like 3% of children don't go to any school ever in their life. And most kids are going to school for a very long time now. And we haven't ever really come back to say, by the way, in the 1960s, it was obvious more kids in school and at constant learning per year was okay. In 1980s, there was still a lot of kids not in school, girls were out of school, et cetera, poor kids were out of school, et cetera. But in 2020, it's like, hey, we're at the bridge. The scope for increasing a country's stock of human capital or the stock of learning and skills and capabilities by expanding the years of school is over. It's just over. It's just over. The additional marginal gain from pushing out on the quantity of schooling access just doesn't hold any promise in most countries of the world. So to some extent, the discourse has to change because the facts have radically changed. Like, I don't want to go back and say people in 1960 were wrong to radically and rapidly expand education or that free primary education in 1970s was a mistake, because there were still lots of kids not with the opportunity or access to school. But that world is gone. That world is gone. And our views and attitudes and discourse hasn't changed nearly as much as the facts on the ground have changed. And so we just have to recognize that, look, the only real viable possibility for substantial, sustained improvements in the level of skills and capabilities of youth is now from more learning per year. We have to radically change that.
Tobi;
So I mean, pivoting to learning, I get that. But I want to talk a bit about testing. Right.
Lant;
About who?
Tobi;
Tests.
Lant;
Oh, okay, let's not talk about tests.
[Laughs]
I'm being quite serious, because there's two radically different things.
Tobi;
Okay.
Lant;
One is assessment and one is examinations.
And then tests, I'm not quite sure what you mean. I'm preempting you here because I was just literally writing about this two days ago.
Tobi;
Okay.
Lant;
Most education systems relied radically too much on high-stakes for-the-student-late-in-the-cycle examinations. But they relied radically too little on assessment of learning. And so when you say testing, I want to be clear, are we talking about grade ten school leaving high stakes for the student examinations, or are we talking about assessments of, in third grade, can kids read and how do we use assessment of learning? Because within the education community there's this huge negative stigma around testing, which then I think leads in radically unproductive directions, because assessment gets thrown into the bundle with high-stakes examinations. And everybody hates high-stakes examinations, particularly because they're often unbelievably crappy examinations, meaning they're examinations of how much can you memorize? And hence we're allocating future opportunities to go to college on the basis of a really crappy assessment of learning. So everybody hates examinations, but I think everybody should love assessment. Sorry, so I've answered a question you haven't asked yet.
LANT PRITCHETT ON EVERYTHING part 1