Michael Kremer's Approach To Economics

To mark the appointment of Michael Kremer as the new Chief Economist of the World Bank, the magazine In Development recently asked Tim Ogden to reflect on his conversations with Kremer, originally published in Tim’s book, Experimental Conversations. Here we share Tim’s reflections on what has changed in development in the decade since the original interview.

Tim: The interview reprinted below is an edited version of a series of conversations that began at the end of 2014 and continued well into 2015. All of those conversations were long before a Nobel Prize (yes, yes, I know), the gutting of USAID, DFID and much of the official development assistance world, and, of course, before Kremer would have been considered for, much less appointed, Chief Economist at the World Bank. Perhaps the most jarring part of reading this interview again more than a decade later is how much value Michael put on building up infrastructure that would allow for the use of evidence in policy, when so much of that infrastructure is now destroyed or faces a highly uncertain future.

It’s impossible for me now not to look at this interview, and the current state of international development aid and infrastructure, through the lens of Kremer’s O-Ring Theory. You can read Michael’s defense of RCTs against critics as flowing from the need to painstakingly investigate each crack and bottleneck in the development process and assess whether relieving this or that constraint will flow through to outcomes. But now we can also see how fragile the production chains of building and applying evidence in development turned out to be!

A decade ago I would probably have been more amused by, as opposed to inured to, the irony of the present situation: the context of the interview (and the book as a whole) was an “upstart” group of economists, NGOs and funders pushing against World Bank (among others) orthodoxy centering macroeconomic concerns and pointing toward measurable, implementable interventions like deworming, teaching at the right level, delivering bednets, or cash transfers to the poorest. It worked! AMCs, GiveDirectly, GiveWell, Deworm the World all can be tied to the work of those upstarts. Now as we see a cyclical return of industrial and energy policy to the top of global development agendas, one of those former “upstarts” is taking the post of Chief Economist.

Still, my re-reading gives me some optimism. The key concerns in development policy that Michael describes in the interview—the importance of evidence, of getting incentives right, of innovation, of building institutions, of creating space to scale while recognizing that scale has its own unique challenges—could hardly be more important now. The need to confront uncertain new challenges while old challenges stubbornly linger (despite progress), the ability to combine theory and evidence, to apply judgment to resource allocation while thinking about longer-term and second- and third-order effects, to be realistic about what can be changed while being ambitious about what needs to change, all of these are desperately needed. Michael Kremer has been thinking about them, and doing something about them, for a long time.

The interview, which originally appeared in Experimental Conversations, published in 2017 by MIT Press, is reproduced with permission here at In Development.