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Hello everyone and welcome to a brand new episode of It’s not that simple from the Francisco Manuel D Santos Foundation great to have you there it should be a fantastic episode because as today we’re going to be joined by Esther Duo a well-renowned international Economist abdulatif Jamil professor of Economics
At MIT also co-founder and co-director of japal that’s the uh uh poverty lab that she started as well president of the Paris School of Economics she won a a variety of Awards as well most notably the 2019 Nobel Prize in economic Sciences along abijit benergy and
Michael Kramer uh she’s done a lot of work uh around alleviating Global poverty and that is obviously going to be the topic of today’s discussion so Esther first of all thank you so much for finding the time to join us I know you’re a very busy woman uh I’d like to
Set the scene for our uh viewers for our listeners um and and Define what poverty is in your eyes and also explain why it’s really not simple to deal with well the key is to to remember that poverty is is is multi-dimensional is not just one thing uh the World Bank
Defines extreme poverty as people who live under roughly $2 a day accounting for differences in P in purchasing power so you have to imagine yourself living in Lisbon for two hour for $2 a day per person uh that’s you can already see how difficult that would be but it’s not
Just about about money poverty is also about the lack of a good education the lack of access to distant Health Care the inability for example for women to to work when they want to or maybe most generally for people to fully realize what they might want or are able to be
By by virtue of lack of of resources or the accident of different you know what I find incredibly interesting and obviously I’m not the only one about the work that you’ve done and the research that you’ve done is that you really have shown the importance of thinking small
When it comes to Poverty not as far as the small impact but the small actions so would you share that uh uh that Vision uh with us yeah so the moment that you you you start defining poverty this way it kind of pretty naturally leads to this way of
Thinking in term of relatively uh a specific intervention so you could call them small intervention but their effect might be impact big on people’s lives because in the same way that poverty is multi-dimensional the problems that affect po people are multiple and multi-dimensional as well and therefore
You know you could be tempted that oh this is such a big problem I’m going to find a Miracle Solution that’s going to erase the entire problem at once and it would be great but such solution really does not exist uh what is much more productive is to say well you know being
Poor leads to a myriad of problems and a myriad of problems call for a myriad of solutions so instead of getting despar you cannot solve the entire problems at once and go Problem by problem solution by solution and the advantage of specific problems is that they call for
Specific solution that you can uh design you can test you can investigate and in this way you can make real progress it’s interesting because what I’ve seen in in other in other interviews that you’ve given is you’ve also explained a little bit the mentality you need to have when dealing
With poverty and that can be a little bit like a plumber right you actually need to get in there and and solve it on a day-to-day basis and when you talk about having $2 a day to live on that is literally nothing so when when when you
Try to apply your models to to fix this issue what what do you think is the most important thing that politicians need to have in their head I think the most important thing that politicians but also researchers and even activists need to have in a head is that
You need to be constantly humbl because with all of these issues that that we have to deal with we don’t have the answers a prior no theory of human beh or human behavior or Society can really give us the answer the best you can do and that’s where the plumber mentality
Comes in is okay I’m going to put my best food forward I’m going to try something out it might or it might not work very much like when a plumber comes to your house and you know they can’t see the whole thing part of it is hidden
Under the sink in the walls and so on so they say okay let me try this and then maybe it works maybe it doesn’t work and then if it doesn’t work they don’t you know say oh well you know if it doesn’t work in practice it must be that
Practice is wrong because my theory is is right what they do is as they say okay fine let’s try something else until they get to the to the solution that solves the issue and in the process also probably understand the root cause of the issue that’s really that the approach we are trying
To have that is at the same time very very pragmatic and also you know nourished by desire to understand the the lives of the poor in order to you know come up with other ideas and other Solutions down the line but uh always being guided and being chastised when
When needed by reality and facts and I think that’s the key thing that all of us uh can learn are politicians learning this Esther and are they prioritizing poverty the way they should so these are really two different questions uh whether or not politicians are are prioritizing poverty it depends
A little bit on their political leanings which itself reflects uh maybe the the sort of the will of the people at least in democracies and in some sense as an expert I have nothing to say about that personally as as a citizen and as a human being I very much much think they
Should prioritize poverty but no this is a little bit uh uh Beyond certainly beyond my remit as a you know as an expert um then there is the next question which is you know given your priority what’s the best way to get there so if a politician’s priority is
Poverty or even within poverty if a politician’s priority for example is to improve the quality of Education or the number of kids who who get immunized then that’s when I can come in or not just me but all of the um the researchers and and the technicians and
Say well you know what’s the best way to get there you want to achieve that there are multiple things you could try what do we already know what are the the area of uncertainty uh what you could try and how you could test whether or not this
This this attempt Works going back to the work that that led you to winning the the Nobel Prize in 2019 much of it was was focused in in around uh India and and Kenya regarding everything and all the data that you were able to compile at the time how was it and
Continues to be pertinent to solving these issues in other geography such such as Europe so a lot of my work tends to be on India and then other U countries in the global South like Kenya or Ghana I’ve also done some work on Morocco and so on but if you take the
Entire uh Network jaal that you mentioned the J poverty action lab that’s a thousand researchers working in all of the geographies of the world including richer countries like Europe or also the the US and Canada so really the the the philosophy that you need to
Try things out uh and then you need to test things that applies regardless of geography and the researchers in our Network work everywhere in particular there is actually a lot of work uh in in Europe uh neighboring Spain uh has launched into a huge effort uh lately to
To test out the impact of a new ARA of social policy policy measures then there is a question of whether some of the Insight apply when the context are very different and the truth is that some do some don’t because uh some things uh might have you know Universal
Applicability and and others as lessons are very dependent on the context for example how much resources is available I think when it comes to to Europe uh obviously it’s I’m sure it’s incomparable to to other areas of the world you mentioned in India Kenya Ghana but from from your studies and the data
As well Esther what do you think are the main causes of poverty in Europe that differ from from other areas of the of the planet and the maybe increase in inequality that we see so I always find it very difficult to think about the causes of poverty or
Like the causes of anything really uh because those are kind of multiple and intersects and so to me it’s much easier to think about the impact of something than about the cause of something it’s much easier to think of the effect of something than of the than the cause of
Something um but uh if and so that’s one way in which I’m not going to exactly answer your question and the other way is that let me try with some commonalities perhaps um which is something that you find that is common in in almost all countries is a deep
Mistrust of the poor uh by the people who are not so poor and in particular by policy makers and in even in the way that it’s often reflected in in the laws or in the systems uh there is this idea that’s pretty root deeply rooted in a
Lot of our systems that um the poor are tend to be lazy and that maybe that’s why they’re poor and if we are too generous with them then we might make them more lazy so you you can even go to an argument where it’s like it’s really
Wouldn’t be doing them a favor to help them too much because it would them help them go into you know further dig themselves deeper into this into this poverty and this is something you’re finding in Europe uh for example in in France there is a big kind of uh um attempt to find
Out who might be cheating on on the receipt of the minimal minimum uh protection income uh and that you find also in poor countries for example with very complicated rules to access social programs to make sure that nobody who is not eligible really gets it and I think
Something that is uh common again to reach and poor countries is that when the rules are a little bit more generous and a little bit less as complex um you get people who really should benefit from these Services who get to access them uh without getting much uh you know
People who are ineligible or without making people lazy for example when people get uh kind of a stability income like a sure income regardless of their work that doesn’t stop them from working and now I’m coming to your to your question on differences I think a big difference
Between rich and poor countries is that richer countries have much more developed social protection measures avoiding the the very desperate situation where people literally have no food to put on the table and that is something that poor countries don’t have partly because they don’t have the resources to do it partly because this
Is not the way that their social distribution system where where design or thought about I I think the issue of poverty also is is so impactful when it comes to its relationship with education and health whereas poor education obviously can lead to Poverty health is very much
A result of the poverty right tell us about the dynamic between these these uh uh three elements that of course are key to having a healthy society and here I’m talking about not only from a physical IC perspective but from a a mental perspective and an economic perspective so what’s very interesting
Is that all Tre are really related to all Tre in bidirectional way so for example um in in Kenya one of the first randomized control TR was an experiment by uh Michael Kremer and Ted Miguel on D Waring that showed that uh a very simple treatment that cost 50 cents uh a child
A year can um help kids dealing with their intestinal worms and therefore mean that they they miss fewer days of school they learn more in school and when they’re grown up because theyve been able to follow now this kids for many years after they’re still following them up
When they grow up they are healthier and they work more and they make more money so you can see how something very unlikely which is this like very simple treatment which is a health treatment has implication for education and for income both directly and via the education Channel conversely uh when um when
People are very uh get a bit big Health shocks that is the one thing which in poorer countries and actually also in richer countries has catastrophic impact sometimes on their economic status because they can’t face the bills and uh they they go into debt in order to pay
For the bill and so on this is like the one big shock that really can can put people uh can set people back sometimes for generations and that’s again more likely in poorer countries because richer countries have better protection against those economic impact of Health shock conversely when people are not in
Good health that they work uh they work less um they are less productive and so they are this inter relationship that that that PS out and those exist to a certain extent in richer countries but they are darker in poor countries again because uh there is no uh protection
From the systems also because a lot of the work is physical and and and require strength and good health to be to be performed you mentioned that obviously in richer countries and Europe is an example of that there are more social programs there’s more security for the poor generally and historically that has
Been true but have you noticed a a shift maybe in that in that tendency where the the welfare state is failing the poor more and more even in poor in in in richer countries like Europe and what what impact has migration maybe had in this to a lot of the European states
That have had to accommodate U big populations of of of of international and foreign people so let’s start with your descriptive question I actually think that that in term of the the protection that exists uh maybe things have improved in the world in richer countries because they have improved in
The US the US didn’t have any really health insurance system that was covered everyone and ObamaCare changed that uh in in pretty significant way in Europe I would say that the our ability to protect the health of our citizens is remarkably good when you compare it to
The US today or to to the rest of the world so there is tension and there is there is discussions around it but we should kind of pose and reflect that we are pretty lucky with the system we have and we should we should really do our
Best to preserve it now let me go to the question of migrants because that’s a pretty uh F politic questions so that’s a pretty frequent argument that migrants are putting pressure on the health system but in fact uh the older studies uh show that if anything migrants bring
A bit more money to the um social protection rate LS than they cost uh so of course they they have things that they need to they they they are paid by the system and they also think that they bring because they are young and they work and to their work they’re bringing
Social security contribution and on balance either it EV out or in some countries it’s the migrants bring up a bit more money than they than they take in particular migrants tend to be young and more likely to work so on the one hand they take there’s more family
Expenditure from the social system on the other hand they are the one paying for the pensions of the elderly uh people a native population so the conclusion from the OCD is that they tend to be a n a net positive and as our population age more and more and more
The migrant population will become more and more and more positive from a budget situation in fact they will become pretty critical to the financial health of the social protection system including uh pension and retirement funds yeah that’s interesting because it was going to be a follow-up question regarding what we’ve seen here in
Portugal where actually migrants have made a very positive uh contribution mostly through through Social Security so they can actually be like you mentioned the net positive and a positive influence rather than many times the perception that can be out there uh uh due to certain political agendas that that that migrants are are
Are negative uh have an negative effect in a society um I wanted to talk a little bit about um uh inequality as well and its relation to to poverty um what have you noticed let’s say in over the last decade or so regarding inequality uh between The Have and the
Have Nots I mean have you seen an increase in this um is it possible for the for the middle class to survive in Europe focusing specifically in this uh geographical area so the work of the world inequality Lab at the Paris School of economics has shown that the inqu qualities have been
Rising in the world and in almost every single region of the world dramatically not only in the last decade but in the last several decade in particular Europe that used to be remarkably equal again compared to either the us or to most of the developing world is becoming unequal
It’s still less unequal than the US less dramatically unequal but inequality really uh increase in an increase R for example the richest person in the world is is today a French person that’s kind of a good symbol of of of the fact that that that inequalities are also
Inequalities is also a big issue in Europe today and I think you’re right to point out the the middle class because what has been going on again over the last several decades is on the one hand remarkable progress for the extreme po around the world where the rate in the
Last 30 years the rate of people who live in extreme poverty has been divided by two on the other hand so this is as countries like China like India but also part of Africa started finally growing and uh taking out um people out of extreme poverty that’s of course
Wonderful news and also when people are very very poor it doesn’t take much to take them just above uh the poverty line at the Other Extreme the very riches have captured a huge of fraction of global growth so what and then a big part of the world
And that’s really from the the middle classes in Europe up to a pretty high level in the income distribution have been completely squished in this process with uh income staying uh mostly flat in real terms with standard of living not really improving a perceiv standard living certainly not improving especially after
A previous period that was a period of General Improvement in quality of life so for the European citizens of you know middle class from the poor to the middle class it’s really been a very very difficult time for sure I mean and and and something that I believe makes it
Clear as well that inequality continues to rise is we’ve never had as many billionaires as we have on the planet today right which is absolutely insane we saw that during covid as well being being uh intensified um as we look at what can be in store for the planet over
The next decades EST there I think it’d be it’d be a mistake for me not to mention uh climate change global warming and how that can affect uh populations moving and what that does to different sections of the world right so I know it’s it’s it’s obviously a very complex
Topic but in general terms what can be the impact of global warming uh in in in the Dynamics of poverty of different regions on on the planet in your in your opinion so in fact it’s it’s reasonably simple uh in the big in the big scheme
Of things and then of course in the solution it gets to the uh detailed of you know the murkiness of each solution but the statement of the problem is the following number one most of the emissions that responsible for climate change are due to the behavior of the
Richest citizen in the world and in particular of Rich citizen in rich countries um the Lucas chel summarizes it very nicely saying that the 10% biggest emitter are responsible for 50% of totals and conversely the 50% lowest are responsible for only 10% that means that there is really a huge inequality in uh
Emissions around the world the responsibility of climate change is related to this u increas in inequality and in particular in the rise of billionaires and multi-millionaires perhaps on the other hand while everyone will suffer for climate from from the consequence of climate change the first victims the most important victims will
Be poor people in poor countries why because poor countries are in places that’s already hot and so as the planet warms the effect are not going to be the same in Sweden where it’s very cold and a little bit warmer is going to be you know Pleasant
And in Namibia or in in ner which are in a place that’s already extremely hot and extremely dry and a desert so overall the there is going to be a large mortality increase related to the highest temperature and this increase is going to be entirely focused outside of the
Richer countries outside of the oecd and this increase going to be so large there going to be millions of people every year about six to seven million of people will die just because of higher temperature by 2100 which is more than the number of people who die of all infectious
Diseases combined every year today so on the one hand the problem is caused by the behavior mostly of Rich citizens most of which are most of whom are in rich countries there are some in poor countries as well and on the other hand the consequences are very St there
Really life and death mostly in the poor countries so that is a pretty big problem that is a pretty big problem because the solutions really rest mainly in rich countries we have to change the way we behave we have to change the way we consume we have to change
You know what’s important and not but the impact is going to be in poor countries and we are not very good at at defining problems in This Global way you know why would I change my behavior because of the life of a little girl in the SEL well you know because she’s a
Human and so yeah uh and again that comes back to you know we talked about education before but there’s an education of humanity that many times I I think personally is is missing in the affluent countries and in the affluent societies of of the empathy towards those less for fortunate which
In my opinion during my lifetime has certainly reduced H um anyway again that’s a topic for another conversation um time time is running out uh before I ask you a series of of quickfire questions that we ask all all our guests um I I I do have
A um a question here that I think is is extremely valuable for for our viewers for our listeners which is taking into account all the data that you’ve gathered all the experience you’ve have working with governments as well what’s what’s the best piece of advice that you
Can give a politician that would give you a call now and say Esther I want to solve this I want to really get to the bottom of of poverty in my country in my region in my continent what what do I need to do help me what would you
Say so maybe I would start with you know trust the poor respect their judgment uh uh and respect the poor give them the dignity that they have and that they deserve and that they want and as a guiding principle it’s it goes a long way it kind of eliminates many things
That politicians would naturally do and it brings in many things that they would uh not necessarily think about that would be my first piece of advice and my second piece of advice advice is whatever you do give you yourself some space to rigorously evaluate it because
Most likely the first thing you try is not going to have the effect that you expect but you can improve upon it so you’re going to really save a lot of time if you give yourself the time for experimentation I think with these two principles in hand we could do so much
Better than than we are doing today with respect to policies that help the PO and these are the the two Respect by which I also try to to lead my life and and my work that was pretty clear thank you for that Esther so uh quickfire questions in
One word or one sentence I’d like you to try to answer these questions the first is what is one personality trait that a good leader could benefit from having I need to be a good listener yeah that that that that shows up a lot humility and being able to
Listen to others is is obviously very valuable uh what is the biggest challenge that humanity is facing now climate change doubt if you could change one thing uh in the world and in the way people act what what would it be you mentioned that I would give
Empathy I would try and teach empathy to people to try to put yourself into other people shoes and see things from your from their perspective and finally what is the most important learning of your life that most of our intuitions are incorrect and we can fix them by uh by
Confronting them to to the real world wow um Esther look I think the work you do is is is so valuable for the for the planet uh it’s been so insightful having an opportunity to learn from you during this this conversation um I wish you continued
Success in all your your work and and and re research and advice and and books which you’ve written many of and will surely continue to do so um it’s been uh yeah it’s been a great pleasure having you on it’s not that simple it was delightful thank you so much thank you
Esther definitely such a a relevant a pertinent conversation to have um during these times of change during these times of big decisions around the world when it comes to Politics as well thank you for being there for listening for watching another episode of it’s not that simple see you soon