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Rationally speaking, is a presentation of New York City skeptics dedicated to promoting critical thinking, skeptical inquiry and science education. For more information, please visit us at NYC Skeptic's Doug. Welcome to, rationally speaking, the podcast, where we explore the borderlands between reason and nonsense. I'm your host, Julia Gillis, and with me is today's guests, Professor Chris Blattman. Chris is a development economist at Harris Public Policy at the University of Chicago. And I'm a big fan of his blog, Chris Blattman Dotcom.
It's got a lot of thoughtful essays, as well as some of the best link roundups that I've found. I've been wanting to have Chris on the show for a while, but the most recent impetus that spurred me to reach out to him for this episode is a paper of his that came out a few months ago that was sort of well designed with interesting results, investigating the question of what are the effects of factories that we might call sweatshops on the workers who work there in other countries.
So, Chris, welcome to the show. Thanks for having me.
So I sort of gave my colloquial stab at at the question that your paper was addressing, but why don't you kick things off by giving us the more precise articulation of the question you were investigating?
Sure. So I guess I spent a lot of my time working on anti-poverty programs. I've worked mostly in sub-Saharan Africa and some in Latin America and a little bit elsewhere. And, you know, I look at a lot of government and NGO programs that are trying to reduce poverty by generating jobs or some sort of social transfer.
And these are, you know, these these have been largely successful.
But I guess I always had the suspicion that really, you know, how much poverty could we believe?
How sustainable was this? How effective was this? And it seemed like and certainly I don't think there's any debate the way that the poorest countries are going to not be poor is mainly by getting firms.
And that probably means industry and and that most of the most of the the national income that's created in sort of middle income countries is in this formals, in these sort of the formal sector, in in industry, sometimes in services. And so for a country to go from two thousand head to maybe twelve thousand dollars per head, they were going to basically have to industrialize. And so I thought, well, maybe I'm wasting my time on this.
And the other thing I used to see that made me think about this is once in a while, there weren't many factories in some of the places I've worked like Uganda or Ethiopia. But but there have been many more recently, certainly in the last decade. And and when I did see a factory, sometimes there would be a job call and maybe for 10 or 20 or 50 jobs, you'd see a few hundred people lining up around the corner. And so, you know, economists would sort of look at that and say, well, revealed preference, if they're lining up for these jobs, then they then these must be pretty desirable jobs.
And so I thought I thought, well, wouldn't this be interesting to test? And and I looked around for opportunities to do so. And if you think about it, this lineup of people outside a factory, if three hundred people want this, this may be scarce set of jobs. Well, this is a terrific this is a terrific opportunity for for the randomized control trial, potentially, where we where we take the people who are interested and eligible if there's an excess of them.
And and what if we what if we could assign those jobs by lottery? And so that's essentially what we did. And we did that in a small number of firms. And we we tried to see what happened over the short run and eventually will. We're going back now to see what's happening in the long run. Oh, interesting.
What kind of firms were they? So so in the end, we we we we found five firms to work with in Ethiopia. So this is so obviously we have to be circumspect about what we learned. How much can we learn from just five firms in just one country? You know, at the same time, Ethiopia is an interesting place. A lot of people, when they hear Ethiopia, they sort of conjure these images from the 1980s and some kind of famine and maybe some anthem by Bob Geldof in the background.
You know, Ethiopia is actually in some many parts of Ethiopia, quite prosperous, the the center and most populous part of the country. And it's probably I think it's the second most populous country in Africa. So maybe 80 million people and the center of the country in the most populous is the source of the Nile. So there's no lack of water there. There it's green. It's verdant. There's a lot of development. And there's a huge industrial boom, especially in the last few years.
But over the last 15 years really is as there's been a lot of domestic industry exporting to Europe and elsewhere. And increasingly you're seeing Chinese and Indian firms, big firms that have huge factories back home. And they are trying to. And what they're doing is they're starting up new. They're starting up new. They're sort of getting a toehold in Ethiopia. And they're thinking, is this the place that we're going to start to jump? To as wages start to rise in China and India and is this a place where we can do business profitably and shipped to Europe really cheaply, especially if fuel prices go back up?
Well, I was actually asking just more concretely, what kinds of products were these firms making there?
So one was a textile and garment factory. So they'd make the textiles and then they'd they'd have and most of the people were employed in the garment making. So this was the cutting in the sewing and one was a water bottling plant. So beverages is usually a huge industry in a lot of developing countries. Another was a shoemaker. So, you know, there's a long history of Shumake in Ethiopia. There's a decent chance that if you bought a pair of Italian shoes, they they were actually made in Ethiopia.
One was a greenhouse operation for flowers and another was a greenhouse operation for herbs and vegetables and things of this nature. So and these are industrial sort of factory like in the sense that its production it sounds like agriculture, but it really the way it's organized, it's really tightly concentrated production. Right.
So you had to there's a there are more workers who wanted these jobs and there were actually jobs for them. And so you randomly assigned workers, you got the firms to agree to to randomly choose which of the applicants they would they would hire. So then did you just have two groups of the people who were given jobs and the people who weren't given jobs?
So at first, yes, eventually we added another treatment where we where we offered some of the people cash to start a business to essentially help starting a business, sort of to not only compare factories to there to there to the to what they're often poor outside options were, but also to compare it to some sort of improved self employment. But at first we didn't have that chance. You know, the first cohort with the first factory we walked in was was was just the simple comparison.
And it came about mainly because I I met an industrialist in London who was was building a bunch of factories and in Ethiopia had just taken over a water plant. And as I had with many factory owners over the years, that that had meant that many. But when I did, I pitched this idea and and usually they thought it was interesting. But they just you know, they don't have time for that.
And he was not in my backyard. Right. Well, you know, I was actually surprised and we found this in Ethiopia. A lot of people were really interested. I'd say the majority of firms we talked to, we approached with three or four hundred firms. A lot of them were were open to it. The ones that were growing, maybe the ones that were just opening up, I should say. We're we're saying, listen, we've got enough going on without dealing with that.
Others where we're really interested, they're interested because they thought the question like where their jobs are leaving poverty and where their problems is was an important one. But they all had problems with turnover. They they had a lot of people who had quit and they didn't know why and they didn't know where they were going. And so they also thought this was a good opportunity to learn something about their workforce. So saying you're going to track their workforce and track people who don't work for them over time was was in some ways an attractive proposition.
I see. I'm intrigued by the idea that that the industrialists were interested in the question of whether their jobs were leaving poverty. I guess I sort of cynically have to assume that they must I don't know if this kind of cynical or not, but they must think that there's a decent chance that their jobs are relieving poverty or else they probably wouldn't want the study done. Right?
I think that's part of it. I don't know. You know, maybe this makes Ethiopia a bit different from other places, you know, has this Marxist history. And so a lot of people have there's a certain social consciousness that pervades a lot of things. And I do remember one factory manager, not the owner, but the floor manager saying, oh, this is such an important study. Our factories really exploit people.
And I think it's really important to see that. And so. Well, that's exactly there is a bust. My stereotype. Yeah, no, there is a lot of stereotype busting.
I think this would be true elsewhere, maybe where we saw some cynicism, where, where maybe some of the foreign, particularly some of the Indian investors we talked to. You know, sometimes I if I if I felt I detected cynicism there, I think it was maybe a selection effect. Like the people who are coming over to pilot these new factories where they could find the cheapest labor. Maybe, maybe that's true. But but but yeah, even then, I think, you know, had they been a bit more established, they would have been interested partners.
I think they valued this information.
And what about you? What were your expectations about what you would find during this study?
So we were super. And I did this with Stefan Durcan, who's at the who's who's at Oxford University. And Stefan and I were extremely optimistic about these jobs.
We thought that even if the jobs themselves, we thought there's a chance the jobs paid more than most people's outside opportunities. Also, a lot of the people coming in, they're young women mainly. And they're they they basically were finding maybe ten or twelve hours of work a week. That's the most they'd had over the last. For they'd applied and and so we didn't know what their employment options looked like outside the firm, so it wasn't so much that the firm was going to pay them a higher hourly wage than whatever else they could do.
But but we thought it would guarantee them 45 hours a week. So that would raise their total income because they'd have more hours and it would also be more stable.
And so volatility is really problematic, right. When you don't have much cushion. Right. Especially when you know, they do have a cushion in that a lot of them are living at home. And so this is, you know, if they if they're unemployed, they, you know, their outside option or the reservation wage, the way we talk about it sometimes is high in the sense that they can always go home and be fed.
They're not always, but most of the time. And so so they were but we thought, well, this is going to, you know, steady wage, even if it's not that high, is is important. And it may be that these jobs are hard to get. And so maybe that's why people are lining up. And even if that wasn't true or even if that was only, you know, that might only be part of the story, let's say that you're getting some scarce skill that firms desire.
So you get this textile job in this textile jobs grow. The next room that comes along wants to hire you above some completely inexperienced person. And so it may be that over time you see the sort of rising wages as as firms bid up the wages of the people who've acquired the sort of scarce human capital. And so that was that's what we were thinking could happen. Great.
So maybe now it's time to talk about what did happen. We found the opposite. Wow.
We were completely surprised. So, I mean, maybe we shouldn't have been surprised, but but I think we were I don't know I don't know what to think after the fact. So what we found was basically, first of all, these these young women and the young men, they had pretty decent employment opportunities outside the firm. So a year later, we went back.
And for the most part, if they if they hadn't worked in the factory, if they had quit the factory, they were finding 30 or 35 hours of work a week, doing other things, working in the informal sector or working for doing casual labor, working construction, working on their own farm. And so I guess there you could say the employment prospects outside the firm were much better than we than it appeared in the in the months before they were applying for the job.
OK, that's a totally shocking. People are applying for jobs precisely the time when they have the least employment. But but it was anyone's guess what they're really what their outside opportunities were then. Then it turned out that these informal opportunities in farming and whatnot, as miserable as the wages were and is uncertain as they were, in some ways they were much higher than the factory was paying.
And so if you stayed with the factory, your income was essentially identical. You had a lower wage, but more and steadier hours, at least from a week to week basis. But your option outside the factory was was a higher wage with lower and less steady hours. But over the course of a month, most people were getting the hours they needed. And so over the horizon of a month or a few months, your income was the same in both options.
So unless you really hated month to month or week to week volatility, then then, you know, it's not clear there was any real income advantage to one over the other.
But then can we still conclude that that people were at least made not worse off by having the option of taking the factory job because they well, potentially better off the wealth that they might prefer, lower risk or, you know, more stability. And that bundle is worth it to them.
And some people did.
And if it weren't for the fact that we also found rather, you know, puzzling but and rather worrisome increase in health problems amongst those who were offered the job so and so I should so basically and here's an important detail before I get into that, most people quit the job, so they started the job.
They often didn't have any factory experience. They started the job.
Something like 10 percent didn't show up or quit the first day. And then within a couple of weeks, something like a third had quit.
And by the end of the year, only about I'd say a third of the people who are offered the job were not only in the job but still in the industrial sector anywhere.
So two thirds of the people offered this job, not only quit the job, but quit the whole sector and didn't try to get a job in another industrial firm.
And meanwhile, a lot of the control group managed to try it.
One of these jobs and also, for the most part, got it, because you were so banning them from taking any job at any factory, you were just withholding a job. Right. Particular factory you are not withholding. Right. And it turns out it wasn't that not putting them in the right. No, we didn't blacklist anybody.
We told the firms just try not to hire these people for a few weeks. And and for the most part, the firms didn't end up the people in the in the in the control group. Get either program, either the job offer or our other other sort of cash grant and business development program, they they found jobs if they really wanted to, at another factory eventually.
So by the end of the year, all we've done is you could think of the treatment actually as as increasing the number of weeks of time you had factory work during the year. So the the average person who was offered the job had 20 weeks of factory work during the year, and the average person who wasn't offered the job had 10 weeks of factory job per year. So we increased how much the treatment was like 10 weeks of on. It is one way to think about it.
And then the people who didn't get offered any of the programs at the beginning, nobody had any real health problems. And by the end of the year, on the day we interviewed them, about four percent reported some sort of serious difficulty doing some sort of basic activity of daily life, like standing or walking or and those mostly were seemed to be chronic issues. It wasn't just malaria that day or or maybe a flu, although sometimes that was the case.
So four percent, that's the baseline. Four percent have some sort of health problem. And in the people who are who are offered the job, it was eight percent. So that doubled. And and you have to remember, most of these people had quit. So. So what that is, is an extra 10 weeks of factory work raised your your risk of reporting of serious physical ailment by by four percentage points. So that's like one point, you know, that's like one point two or three percentage points per month.
Yeah. If you can extrapolate. Former, yeah, I mean, it's all these are small numbers, too, so, you know, it's we have to be careful. We're now talking you know, we're talking about a thousand people in total and each treatment group is about three hundred and change. And so so, you know, we're still we're just talking in each treatment group.
We're talking 20 or 30 people with a serious, serious ailment. And so you have to be a little bit careful. But these are, you know, statistically significant and rather worrisome numbers that aren't pointing in the direction you would have hoped.
Yeah, and the whole argument about how giving people additional options, even if they're kind of bad options, can't make them worse off. If, you know, if people are freely choosing those options and clearly, you know, they must think that those are better than what their outside options were. That whole argument relies on the assumption that people have sort of full information about what the relevant costs and benefits of the options are so that they their choices are sort of informed choice.
So I'm wondering whether the health risks of the factory jobs were whether we have reason to believe that those were known to the workers who chose them.
We have a little bit of information on that. I'd say at the end of the day, the punch line is I think they understood, at least in part. And so you can you can understand their decision probably in two or three ways. One is one is that they they knew there was a risk, but they underestimated those risk. And I think the risks and I think that's probably true, but they didn't necessarily after the fact fully, they didn't they didn't necessarily change their perception of risk.
So so even after the experience.
So I think they understood that there were some risks. You could see it as they make that choice because it's rational. But but nonetheless, they're making a very constrained choice. So maybe so we look at the factory jobs as in some sense as a safety net. This is how people are using them. They were using them for a few weeks or a few months when they really needed cash because they were unpleasant and a bit risky. And so they're not necessarily a choice people would have made if they weren't somehow desperate.
So you might look at them in the same way that we look at. Payday loans or other sort of quasi extortionary lending like a market will generate these know and it might be human, it might be myopic people who take up these loans, but but it's such a big portion of the population sometimes that it's actually people who just really need that thing. And they take it, even though it's it's actually could lead to bad outcomes.
It might be better than their alternative. And and so so that's on the other hand, you could you know, I think there's there is something to this story that they might not have really understood the choice they were making.
I mean, there is of course, you can make the case that even if people are freely choosing this, this kind of unfortunate bundle of health risks and low wages, et cetera, there's still potentially an ethical case for not giving them that option. I'm a little leery of that case. But, you know, many people make it. But, you know, then there's the separate question of like, are they even freely choosing? Which makes it makes it even harder to defend.
Well, I think, you know, I feel like not really, but like. Yeah, full information.
Yeah. I guess I'm not sure that anybody has full information. I think even the factories or the factories are providing protective equipment and particularly, you know, take the take the green house operations, for example. There's a lot of chemicals. So this is one of the sources. Repetitive stress injuries and and things associated with chemicals seem to be part of the story. We're going back in a few months to sort of investigate this in more detail, four years or four or five years afterwards.
So this is a this happened some years ago. And we're going we're going to have much longer term results now with much more detailed health impacts.
But but, you know, so so so you're there's a lot of chemicals involved in dying textiles. There's a lot of chemicals involved in gluing shoes. There's cleaning solvents and there's sprays and other things in these commercial farms.
And you would in in the city, your job was spraying at the commercial farm, spraying chemicals to sort of get rid of pests. They would test your blood every week and check for toxins. And then if you're if you're if you're toxin levels got too high because you got exposed to something, then they send you off to the packing area for a few, a few months or at least a few weeks.
And you think might have written it on you think that the health problems were not the result of, like, lax worker protection standards that were, you know, the result of cutting costs or like taking advantage of the low regulation in Ethiopia or something like that. This is just like risks inherent to the work.
Well, I think, you know, who knows with these chemical effects are I mean, maybe they know, actually, but but I'm not sure the firms or anyone really understands. I certainly don't understand the precise risks associated with some of these chemicals. And but if you're toxin levels are going up enough that they're rotating you off. So that might be a reasonable thing to do as a firm, especially if you're uncertain of the health impacts.
But but and it may seem reasonable to the employee, but that doesn't mean that a year or two later, unbeknownst to everybody, that actually there are all these sort of hidden costs that people who quit and go on to other things suddenly experience or tend to experience over time. And it may get worse over time or may get better over time. We don't know yet.
But but I think there's just a lot of hidden risk. It's really hard to it's you know, it's very hard to connect cause and effect in these circumstances. And this is I think this is one of the I can see how this becomes an argument for getting not only having basically a case for more systematic testing and application of the knowledge. Probably these are questions that wouldn't have been answered one hundred years ago at the same stage of industrialization in the West.
But they are answered now.
But no one's necessarily being held accountable to sort of maintain certain health standards because of what we now know. It's just it's not known there and it's and it's not applied.
Mhm. The, the concern I think people sometimes raise about requiring stricter worker protection laws at these factories is just that, you know, it'll raise the cost of operating for the business and then they're going to be less likely to want to locate in that country with those laws. And so then maybe they go to another country and the workers in the first country are now worse off because they didn't even have they no longer even have the choice of taking these, you know, risky jobs that nevertheless might support them through a rough patch.
Does that? Yeah, no, it's absolutely true.
I mean, it's a hard tradeoff to make. I guess, you know, right now what this evidence is suggesting is someone's bearing the cost. I mean, you always there's always a cost borne for those risks and problems. It looks like the workers might be bearing it might be might be taking on those costs and they might be taking on them. They might be taking on those those costs as a result of not being fully informed, not through any malicious way, but just because maybe even the firms don't fully understand some of the long term risks and costs.
And so. So, yeah, and so it's now and it's certainly true that if a country unilaterally moved in that direction, then it would it would probably be at a disadvantage. But if the whole industry moved.
You know, if the if those protections or if that insurance was somewhat cost effective, it might not be, but a lot of a lot of a lot of measures and a lot of the sort of insurance against these costs and risks might be relatively cost effective. It's not clear to me that you'd see investment globally go down that much. That's a really hard coordination problem.
Is there actually empirical evidence that when a country unilaterally passes stricter worker protection laws, that's like foreign businesses are less likely to locate, there are more likely to move away? Like it seems very intuitive that that could happen. But I know there are many cases in economics of some things, some, you know, cause and effect seeming very intuitive and common sense. But then the empirical evidence is much more mixed.
I mean, I have no idea. I'm familiar with this factory. Work is is very distant from from what I've worked on it. To the extent I've worked on any poverty employment. I actually I most of what I study is violence.
And and so I and I and I started studying poverty and employment programs because I wanted to look at the relationship between employment and violence and and this burning question that I had about factories in this sort of existential question about why am I working on these anti-poverty programs when there are firms was made at me.
And that's how I stumbled into this project. But this project is in some ways a bit of a detour.
What did to her what was your personal update from this results like? How did it bare it all on on that question of like the merits of anti-poverty programs relative to just letting business run its course? Or did it bear on anything else?
Well, I mean, fundamentally, I still believe that the only path to riches, unless it left the country sitting on a billion barrels of oil, the only path to riches is through industrialization. We just I don't think we know another way. So so so there's that. But but I. I guess I'm less the gains from that industrialization, I suspect especially for unskilled labor intensive industry, the gains from that are probably not accruing to the workers who have a lot of people to compete with.
It's not until you get a lot of firms and a huge increase in labor demand, and that's likely to happen at later stages of industrialization. It's very early days in Ethiopia. At that point, you're going to start to see wages build up, get built, built up, and and you may start to see some some, you know, those those profits being being shared.
But I you know, this is this is just on some level, this is just labor markets working like we expect them to, that labor isn't very scarce and the skills aren't skills don't seem to be required for production in these firms. And so firms are just using interchangeable workers and and paying them their their reservation wage. And so their reservation wages the least they'd be willing to accept over whatever their outside option is.
And so it doesn't make the worker themselves. It makes them only negligibly better off not getting paid more than exactly otherwise.
And over time, as you get lots and lots of labor demand out there for more and more and more firms and workers, outside options improve. And and you get this sort of big you can get rising wages. And that's what you know, whether it's in the Mexican market or region or whether it's in China or whether it's in Bangladesh, you see you see rising wages over time. And this is why this is precisely why a lot of these firms are looking at Ethiopia, why they went from Mexico to China in the first place.
And now they're looking to go from China, for example, because wages are rising in both places.
And so and textile firms and some of the and some of the other industries are looking at the first one is to jump as soon as wages start to rise.
So so this is all is expected. So there's no revolution here in economics just just saying, yeah, labor markets are pretty competitive and and people are being paid, you know, no better than the right side options. And there's nothing wrong with that. But these health risks give us give us some pause.
But meanwhile, we when we do improve the cash grant and the business startup intervention so gave people three or four hundred was I think was with three, two plus a few days of business skills training, which is a lot of money in Ethiopia.
It's several months of wages, at least for these people.
Did they have to use the money on a day to start their own business or could they have spent it on anything? No, they could do whatever they want with it.
And that was made very clear. I mean, it's not going to eat it all. You want to eat some of it in the future. That's what we do when we get a huge lump sum. It's really hard to save in most developing countries there really. You know, the idea of getting a putting something in a bank account or buying mutual funds or things just doesn't really exist. Inflation is high enough that you don't want to hold it in a bank account or in cash because it's sort of like Yulu.
It's inflation's like fifteen percent a year in Ethiopia.
So just depreciate. So, so.
So what do you do to sort of push. Money into the future. Will you invest it, you put it into productive assets and so that's what most people do when they they spend a little they save a little bit. They put a lot of it into productive assets. And so they put it into Kausar or a little, you know, trading enterprise or things. And they get about four or five or six more hours of work a week. And they but in this case, their earnings went up about I think it was about a dollar a week.
So went up. Their earnings went up by a third. So dollar isn't relative to that.
The control group and the factory group. Exactly. So their earnings were higher, their earnings were good. Thirty three percent higher. And now that was a small and it was a small increase over a small number, which is the only reason you get a big percentage change. Thirty three percent. But if you're making that little, that's a big change. Right. That's because that matters. Yeah.
Well so so why what was your motivation, including that third group to compare to the factory jobs? Was the idea that like this is these kinds of grants are actually a feasible alternate approach to development?
No, I think so. We knew from other research that that was likely to happen that people will invest money in productive assets and they'll raise their their earnings. And this I think the idea was to say, well, let's simulate an alternative universe, Ethiopia, where people's outside options are better because something's different.
Maybe the informal informal sector works better or access to finance is really cheap so that people can can productively invest when they have good ideas. They don't have to get a cash grant. Cash grant won't lead you to invest if financial markets are working well, because you could have borrowed that money anyways and you'd be producing your best amount. So. So cash grants only work when people are constrained financially for some reason.
And so we're sort of simulating a world where people's outside options are better.
And we're saying what, what, what is how, how, how, how does the factory job compare to that alternate world where some event maybe it's just not necessarily a large scale cash transfer program, which isn't too sustainable, but but one where maybe informal labor market opportunities are better.
How will the factory perform relative to that? And and in those cases we actually saw.
So you remember? Well, for example, I think the control group who didn't get either program, something like some no, I can't remember the exact number maybe was like half tried out a factory job during the year.
It was probably a little less than half by the end of the year. Twenty percent were engaged in factory work. So so that's compared to the one third or the thirty three percent of people who'd been offered the job. So being offered the job increase the likelihood that not only tried factory work, but you were still in it, but it was only 10 percentage points. It's only 10 percent of the people who received the the cash grant. So basically have the likelihood that you went searching for a factory job and and and and that you were still in a factory job at the end of the year.
So we improve. You prove your opportunities just a little bit outside. You get some extra cash, you make you do the equivalent of making financial markets work better. And people are half as likely to apply for these factory jobs, at least at the prevailing wages.
Did you also, like, have thoughts about the connection between factory jobs and violence? I was interested in that thread. We didn't really go down it well.
So not not so much. Well, we are a little bit now because there's some there is there has been some unrest in in in in the region of Ethiopia where a lot of this industrial development is going on and some of that unrest is over, this industrial development, particularly some of the land issues it's creating. And that gets us into sort of the muckety muck of Ethiopian politics and what's going on right now.
But we so we're going to look a little bit into this.
But I, I don't expect a big connection.
So in general, across the board, you can't it's hard to find a connection between how well someone's doing economically in terms of their employment and their income and maybe how aggressive they are or how there's some relationship in terms of whether they pursue sort of criminal careers.
So they go and work as a mercenary or if they go and work as part of a criminal, either petty crime or engage in organized crime, at least where those opportunities exist, they don't exist.
And in Ethiopia, for the most part, but places where they do have more income affects that margin a little bit. You're a little bit less likely to engage in crime or paid conflict. It's not clear. It has much of a relationship to the kinds of conflicts that are not, say, motivated by your material interest.
Huh? I actually would have expected there to be a correlation at the very least, because I believe that IQ is correlated with propensity for criminal activity and also IQ is correlated with your income. So I would expect the you know, that to be translated as well.
So there's I mean, there could be a correlation in. Yeah, I'm not sure that that would hold in developing countries where I think the. But but I think it's I guess I'm talking about the evidence we have from from, say, randomized controlled trials, so trials where we would take very poor people who have the up.
So I've worked with a lot of ex combatants, particularly in Liberia and a lot of street youth and people engaged in crime and worked on programs to increase their incomes, maybe increase the incomes of a dramatic amount, the same way we increased Ethiopian incomes by a dramatic amount. And they have opportunities for crime or illicit activity. So you then see those criminal illicit activities and mercenary work go down somewhat. But it's not it's certainly not one for one.
Another interesting thing is they often don't exit. So if you have the opportunity, if you think of think of the way that economic life for a lot of poor people is about having a portfolio of of activities that generate income. So just like your retirement portfolio has many, many stocks in it, because that's your optimal strategy for maximizing return and minimizing risk. That's the same thing. The same holds true. If you're very poor, you over the course of a year, maybe even over the course of a week, you'll work on multiple activities with multiple streams of income, and that's risk mitigating.
And if one of those things that's open to you is crime, for example, if the returns to crime go down relative to your non crime work, then you're going to shift away from crime towards non crime. And that makes sense.
But in fact, it if you're if you're engaging and this is a risk mitigating strategy, it's not clear it ever makes sense for you to stop doing crime just for these economic incentives. It always makes sense to still have it in your portfolio, partly so that you can shift back over if the returns change. And partly because you want some sort of, you know, having this extra item in your portfolio actually reduces risk. So, so so that's the other reason why you won't necessarily see you wouldn't expect there to be a really strong relationship between between income and crime.
While we're on the topic of crime, I remember reading I don't remember if this was a study you yourself did or just a study you were discussing on your blog. But it was about the effects of cognitive behavioral therapy on on combatants or ex combatants in some African country. Can you talk a little about that? Yeah, so that's yeah.
So that is a study. So that's a little bit more that's a little bit closer to my day job in the sense that after working for a long while and different economic programs to to see if raising the employment of of or the legitimate employment opportunities of these high risk men, whether or not that reduced their participation when that didn't seem to be so effective, I started looking at other strategies and one of them was stumbling across this this program in this small organization in in Liberia, an organization of ex combatants and people who had sort of lived on the streets or committed or engaged in mostly disorganized crime and had either rehabilitated themselves or gotten lucky and gotten out or or more specifically, had been helped out by this by the founder of this organization, a guy named Johnson Boort.
And I knew Johnson and Johnson through various means. And but I didn't know him that well until one day when I was I was actually sick and I was stuck in Nairobi. I stuck in Monrovia, ill recovered, but not well enough that I could leave the capital. And so I decided to get to know sort of the seedier side of the capital, to understand how illicit markets were working and what problems were there. So I had Johnson take me around for maybe a week to the seedier corners of the city to understand how drug markets work, to understand how fencing of stolen goods and and all these.
And every time we would go to some drug den run by so-and-so or some, you know, little guild of of and I use the word guild generously, but basically the area where the cell phone thieves hang out and and so forth, there would always be somebody maybe with a little legitimate business nearby and he'd come over and give Johnson a big hug and and I'd ask how they got to know each other. And he said, well, you should be like those guys.
And he'd point over to the drug, the entry point to the cell phone thing.
And then he went through Johnson's program.
And so at one point I said, Johnson, what is this program like?
Tell me what you do. He says, well, we transform youths lives and whoa, whoa, whoa. I don't even know what that is like. What do you do on day one? OK, what do you do on day two?
And step by step, when we wrote it out, like a little, you know, and it's now it's like a fifty page manual right now. It's like a long manual. But we wrote we sketched out in a few pages and then I showed it to my wife who's a psychologist, and they showed it to a colleague who's a psychologist. And I said, What do you make of this? Do you remember that guy Johnson?
And they went, Oh, this is this, this is basically looks a lot like cognitive behavioral therapy. This is. This is like an approach that we would use to treat a lot of problems in any normal populations used widely in the U.S., there's a lot of rigorous evidence for it. It's it's similar to the way we would treat aggression and problems in the U.S. But it's got these weird applications like it's basically trying to treat a different set of problems.
For example, is trying to get people to basically try on a new social identity as somebody who is not criminal, as someone who is mainstream and normal rather than an outcast and and a criminal.
And and it does.
So CBT or cognitive behavioral therapy is basically learning by doing. It's it's it's it's that's the simplest way to describe it, is it's helping people practice their way to a better life and learn simple techniques to sort of overcome automatic impulses or to overcome issues that they're having.
And you start with baby steps and you can get gradually more difficult.
I've been interested in it because it it in many ways it's kind of like applied rationality, like it's sort of training you to question your initial snap judgments about what's true, like train you to recognize your fallacious thinking about yourself and like what you can or can't do or about assumptions you're making about why someone did something, etc. recognize physiological responses that maybe lead you to do to do things that aren't in your Long-Term Interests.
Yeah, exactly. And so and that's largely what this was trying to do.
It was trying to help people become more planful and to slow down their thinking at crucial moments and but also was trying to let them realize that they could begin to act differently and behave differently and learn to behave differently and that people would accept them and they would be happier as a result.
So it was also helping them get over the hump of through or through some encouragement, some practice and some support.
And so and that was very successful and it was successful, particularly in combination with an economic program for lots of reasons, including that the economic program helped to reinforce the lessons, but also give them some space so that it actually helped them exit crime because they could afford to take the risk of of getting out of it for a while and practice being a new person and then maybe not return to that old, that old, that old self that they they maybe didn't like as much.
Do you recall what the size of the effect was? Well, yes.
So you could basically over the course of the first few weeks, you saw various types of criminal and aggressive behavior dropped by 30 to 50 percent.
So you can think of and what that is, is that's maybe a third or half of the group, you know, going from committing a couple crimes a week to committing none and and then the rest maybe just continue with the normal business. So not every it's not not everyone switches off, but a lot of it is some people just sort of saying, I'm not going to stop doing that.
And then after a year, the people who only got the therapy had sort of reverted back to where they were before in that in some sense, they were drawn back shortly after the therapy into this life. Maybe they couldn't escape it, especially because of immediate financial needs.
And but a year later, the people who'd gotten both the therapy then followed by this economic program, had the these 30 to 50 percent gains, depending on which behavior you're talking about, had persisted.
Now, whether they go beyond a year, we don't know. We I think about going back. It was such an atrociously difficult study to do that. I really don't. I think it's really important to go back. I often do.
And a lot of my studies, this is one where I don't know that I have the money or the or the patience or the or the capacity for stress involved in trying to work with this population. But I think eventually all I collect myself and find a donor and we'll do it.
You're getting too old for skulking around drug dens in Liberia. You know, I actually started to skulk around those places in in in Medellin, in Colombia.
So it's like that for. Yeah, it's it was extraordinarily difficult. So these are guys with no fixed address and many aliases and often are evading people, maybe the law, maybe somebody they owed money to, maybe some unsavory character. It's just extraordinarily difficult to find them. And then it's just extraordinarily difficult to work in what's it's not quite a failed state, but it's it was. And then it's just, you know, it's one of the world's poorest countries for a reason.
You know, just life is disorganized. The state's disorganized, society's disorganized crime's disorganized. It's just extraordinarily difficult to get things done. Things go wrong every 15 minutes and it's very hard to solve those problems. And so it just becomes it's superhuman and and it's really it's just really hard to work there. I think so.
Well, that was kind of a fascinating tangent that I had. Actually, originally intended to discuss, but I'm glad we went down, but before we have just a few minutes left in the episode and there was one other globalization related question that had been on my mind as I was reading your blog and I wanted to pose to you basically this is like broader than sweatshops, but about globalization more generally. I've a lot of people have been thinking and discussing in recent weeks about whether the downsides of globalization might be greater than we had sort of blithely assumed all this time or that like maybe we were failing to sort of give enough respect to the people who who are being hurt by globalization.
We were just blithely saying, like, well, in the long run, it makes everyone better off. But like, of course, they're losers as well as winners. And so, you know, the some of the support for Trump and some of the support for Brexit were kind of like vindication of that view, many felt. And so there were like several things you'd posted on your blog recently about your thoughts on the kind of ethics and strategy of globalisation.
Has your perspective on that changed at all after recent events? Like do you take the sort of the sort of standard utilitarian, like, you know, we should just do what's best for everyone and there's no justification for prioritizing workers in our home country just because they're in this country.
You know, if prioritizing their needs means that like people as a whole are worse off, then so I guess over the past few years, my my thinking has evolved when I before even entered graduate school.
So maybe this is worth is now more than 15 or 16 years ago. I think the reason I started working in development was because I partly because I felt the need and the desperation in other countries are so great. I thought the returns to sort of spending some time and energy were much greater because the problems are going to be easier to solve. I think those things are all true and remain true. And I and I, I did I did have the sense that that that when someone complains about a job leaving us to go to Africa, I think, well, it can really be used to like being poor.
Here is one thing of being poor in Africa is another thing like in most of those most African countries, it's it's it's a battle with survival and I guess.
One, what's happened over the last 15 years is I think the pace of globalization and this speed of economic transformation in the United States and just the developed world in general, but really the United States has really surprised people.
I don't think that I don't I don't think that many people, you know, David Autor at Harvard has done some research at MIT and I'm blanking, has done some great work on this and and has you know, has has and I've heard him speak about how this is this is not what we've seen is outside the realm of possibility, but was somewhat unexpected in its speed.
And and also the the seemingly dismal prospects for a lot of people mid career to change and retool for another job.
And so it's not so much that I think in the long run or even the medium run, we should have a different outcome.
I do think that some equalization of industrial development around the world is really important and and and indeed ethical and essential and inevitable.
But the way it's happened so quickly that it's been dislocating and and so I can see a really good conceptual argument, maybe a incredibly strong conceptual argument for trying to slow the pace of change and that this is too rapid. Now, doing that in practice is incredibly difficult, but but we don't we haven't spent a lot of time thinking about it. And people are very careful. And and, yes, a lot of things get perverted by the political process and whatnot.
But I I guess my I look back and I say, I think it happened too fast. And I think that's I think it's fair. I don't think it's unreasonable to say all the jobs should stay in the U.S. I think it's I think it's reasonable to say that all of us, you know, none of us know what's going to befall our industry in the next so many decades, including academics. And so all of us have a shared interest, in some sense, insuring ourselves against rapid change.
And and that seems like a reasonable even at the expense of guys like even if we end up at the same end point, like making the pace slower is still causing harm or, you know, failing to help people in the short term who, like, are not getting the jobs as quickly as they would have if you hadn't slowed down the pace, basically. So it still seems like a compromise between maybe this is intentional on your part, seems like a compromise between prioritizing the needs of people in our home country versus the needs of people worldwide.
No, I think it is well, partly it's a compromise. And and I think it's in its reasonable part because, you know, this is as a society, I do think that you can choose if you want to prioritize insiders over outsiders.
I mean, I think that's a legitimate choice to make as a society, at least in part to sort of especially if it's saying something, you know, we want to slow change down. But also, I think, you know, with with the recent election and indeed in many recent elections around the world, in many recent events around the world, I think the the the that pace of change isn't really politically sustainable.
I think it's so so it may be that the this the smoothest, least volatile path towards equalizing global income requires a a different transition, a slower transition path, and that might actually do more good in the long run. That's a really tricky argument to make. I think the only way you can really make it in a strong way is is is by saying that, listen, we as a society, we as a country are allowed to to to weigh some people more than others.
We're not going to be strict utilitarians. And and and that's that's a hard you know, that's a hard choice, hard choice to make.
Yeah, I my own evolution on the subject has been not just strategic, although I agree with you that there's a strong strategic case for slowing the pace, even if all you care about is the total utilitarian outcome. But even just ethically, I think I've been moving from a kind of like local way of making utilitarian calculations where like in this particular instance, people would be better off if we made this particular choice. And I've been moving away from that to a broader conception of utilitarianism, where in this case that might mean saying, well, you know, I don't necessarily think the social compact that we we've ended up at, where it's OK for people to prioritize, you know, their own tribes members over, you know, non tribes members maybe.
I don't agree with that. But I do think that a world in which social compacts are honored. Yeah. Is going to be a better world than a world in which social conflicts are not honored and like or like in which social conflicts are not honored. If in that particular case there's like a utilitarian reason to not honor them. Right.
Especially when a social compact is based on something very reasonable, which is insurance, which is to say that we all face risks. We don't you know, we pull down the veil of ignorance. You don't know maybe what kind of career you or your child will have.
And and so having a social compact that allows some insurance against these unpredictable technological changes that could rob you of your job, mid career is is actually a reasonable kind of insurance contract to kind of make with your neighbors. And that is very naturally going to be done with people potentially nearby you and in your country and in your political unit. So so if you're born into a world of of social compacts and of of of this territoriality, then that I think it's it's a it's a very reasonable and, you know, it's something that reasonable people are going to disagree about.
But but it's it's it's something where I've sort of shifted a little bit away from being very in some ways extreme. I wouldn't say utilitarian, but someone who just regardless of your calculus, you could if you spent time in northern Uganda during and after the war, or if you spent any time in Liberia, if you spent any time in some of the places where I spent time, it is very, very difficult to come back and sort of say, well, the you know, the allocation of energy and resources and empathy that we have as a society is is allocated anything close to correctly?
Yeah, absolutely. Well, Chris, we're actually over time, but I wanted to give you the opportunity before we close to make a recommendation to our listeners, we call this the rationally speaking pick of the episode. It's a website or a, you know, blog or a book or even like a journal article. Right. That has sort of influenced your thinking. I think you think it would be interesting to our listeners. Sure.
Well, I have a I have a post on my blog where I say the ten books or something, them all books that I said, oh, what is it called? I think it's called the books that development and international workers should read but never do or something like that.
Oh, great. And I think we can link to it on the party's website. But why don't you. One. So I would say what two books that I always two authors and two books in particular that I always push on my students, my colleagues, a lot of people who work internationally. And one is called the Anti Politics Machine by an anthropologist at Stanford named James Ferguson. And another is really any book by the political scientist at Yale named James Scott, seen like a state is a is a fantastic one or the the art of not being governed is another.
And there's so many things to talk about with these books. I think maybe a couple of the big picture thoughts is, one is that we is it's a it's an er commonly made as sort of social planners or people are even just thinking about how to make the world a better place. It's sort of easy to treat international development or international intervention of any kind as a technical problem to be solved and not a political problem, one that has like a lot of complicated social and political realize that a lot of complicated political and social assumptions.
And if you ignore those, you often you really misdiagnosed the situation. A lot of things go wrong. And that and that sort of the social planner or the do gooder or really the bureaucrat or anybody who's just trying to go out and make a difference falls into these traps all the time.
And so I think the really enlightening books are there, too. I think the two of the deepest books and deepest thinkers out there, and they're sort of universally read by a Ph.D. in political science and anthropology and then almost ignored outside of that. And so I really urge people to go read those books because they I think those are two of the most influential books on my thinking in the last 10 or 15 years. You're actually seeing like a state is on my list of books that have deeply influenced my thinking, too, despite not not being in that field, right?
Yeah, no, it's that and that one's more commonly read than the art of not being governed. But arguably, that's the better book.
Interesting. Excellent. Well, we'll link to those books as well as the list on your wonderful blog and your papers as well. Chris, thank you so much for being on the show. It's been a pleasure. Yeah, thank you.
This concludes another episode of Rationally Speaking. Join us next time for more explorations on the borderlands between reason and nonsense. The rationally speaking podcast is presented by New York City skeptics for program notes, links, and to get involved in an online conversation about this and other episodes, please visit rationally speaking podcast Dog. This podcast is produced by Benny Pollack and recorded in the heart of Greenwich Village, New York. Our theme, Truth by Todd Rundgren, is used by permission.
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