The world is slowly emerging from the economic wilderness of the past three years. What fixes have worked most effectively, and what innovations—sweeping policy reforms, creative business models, analytic insights, bold planning initiatives—hold the most promise for the future? Our panel of global experts weighs in. [End Page 3]
Esther Duflo on Learning to Learn
The global financial meltdown exposed our unjustified faith in conventional solutions to social and economic problems. The recovery presents an opportunity to acknowledge our ignorance and learn how to learn.
Around the world, all kinds of people—entrepreneurs, teachers, activists, local government officials—are constantly trying out new ideas, from the commonsensical to the highly improbable. Many fail; some succeed. Either way, the rest of us usually don't find out.
Consider the many programs being carried out by governments and organizations all over the world: disease-prevention strategies, school-reform initiatives, job-training programs. We could all be learning a lot from the results of these projects. But there is no systematic process for aggregating lessons from individual experiences. This is particularly true when it comes to social policy, where success is harder to measure than in commercial ventures. Randomized impact evaluations can help. But they require time, money, and expertise, which local actors typically don't have. Rich countries sometimes evaluate what they do, but rarely learn from this wealth of experience about what they could do.
Progress in impact-evaluation is being made—especially in poor countries, where dozens of researchers have been working with NGOs to help them evaluate their projects. As a result, we know more than we did 10 years ago about what may work to help the poor, and we will know much more in 10 years. Governments can encourage this progress by funding innovative projects, under the condition that they are rigorously evaluated. France's €250 million social experimentation fund and USAID's development innovation lab are built on this model, and provide exciting templates about what the future could look like.
Esther Duflo, a professor of economics at MIT, is co-author, with Abhijit V. Banerjee, of Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, due out in April.
Cyrill Eltschinger on Long-Term Planning
China has become the world's second largest economy, surpassing Japan in the last quarter of 2010. What accounts for its relative success during a time of economic turmoil?
One thing that China does well is long-term planning. Each year, it adapts and fine-tunes its short- and medium-term plans without losing sight of its long-term goals. Any country that wants to recover from the recession—much less develop and grow—should take heed of this aspect of Chinese policymaking.
Centralized planning like China's is only possible with centralized state authority of the Chinese variety—not a palatable option for the democracies of the developed world. Yet the problem in the West is that the shelf-lives of goals and plans are limited by short political cycles that make even medium-term planning nearly impossible. No economy can thrive by relying on one short-term plan after another. Developed nations need to move toward embracing as much long-term planning as their political systems and cultures will allow. [End Page 4]
Marina Gorbis on Social Production
In areas as diverse as health care, entertainment, and even space research, social media platforms and tools are ushering in a new era of social production, with many people who are not paid employees working together to create great value. The Galaxy Zoo website was set up by a collective of astronomers, allowing thousands of ordinary people to tag photographs taken by NASA's Hubble Space Telescope and help classify new galaxies. Players of Foldit, an experimental video game, manipulate simple protein-like structures; along the way, they are helping to uncover clues in the...