 Thanks a lot Martin for this tour the horizon of this tour the force We decided that we would try to Start the Q&A session With two brief introductions or comments one from Annika Sundein whose chief economist of Cedar and the second From Tony Addison whose chief economist and deputy director of wider. So Annika over to you Thank you very much Finn and thank you very much for the invitation to come here today And thank you very much for an interesting and very rich Lecture Martin. I think it's clear from what we heard this afternoon that social protection is absolutely crucial for combating poverty and for for re-distribution And in particular in the in the changing of poverty poverty today is much more about inequality The distribution of resources rather than the absolute lack of resources We also see a core of chronically poor people also for whom very little has happened Also in countries with rapid economic growth So it's central in our efforts of leaving no one behind and as as as recognized by the SDGs But I think it's also important to underscore How these programs if they are well-designed are part of the social contract in a society and in that way our integral to nation-building democracy and social cohesion If we look at developing countries today, they're expanding their social protections programs rapidly Sub-Saharan Africa is just one example and and many donors like Cedar are involved in These efforts and Sweden supports programs in several countries in Sub-Saharan Africa If if this is going to be successful if these programs are going to be successful long-term However country ownership is absolutely crucial It's the country itself that has to design and implement their programs and there I think Professor Revalio makes a very important point and that's the one about administrative capacity We see that many of these programs are complicated And we have to think about that when when when they are implemented What type of programs can and should be implemented and I think we as donors have reason to to reflect here If we then look at what kind of programs are are implemented In particular in Sub-Saharan Africa It is the conditional cash transfers that we've just heard about And they they are model on the programs that were introduced widely in Latin America in the 1990s in the 2000s These programs and as research have shown have been have been successful in reducing poverty at least in the short run But going back to the to the issue of country ownership I think it's very important to be careful when you take a model that's been successful in a certain context and then transplanted in another context You really have to think about the country where you are when you implement a social protection program When you design these programs and think about the various components I also think it's important to recognize that these are not just singular programs They really are systems and that goes to the fact that they have to meet several objectives It's about poverty alleviation about protection It's about protecting against risks that we all face during life unemployment sickness disability work injury old age And they have had they have to help build capacity for increased product productivity health and education So the programs that we see expanding widely now the cash transfer programs. I would argue is just one piece of the puzzle They build on the idea that they are they are targeted and they should be temporary All be it for a fairly long period of time And it's only the poorest that should receive the benefits and that's as professor valin clearly pointed out There are a lot of problems with targeting. It's difficult. It's expensive. It's complicated. It often misses the mark I would I would add another another argument to why why we shouldn't focus so much on target And it's it's what what are the what are the people who what are the characteristics of the people that that these programs are aimed for There are some groups that will never be able to support themselves through work Children the elderly the disabled these are also the people who are at risk for poverty And are the target of the cash transfer programs. So instead of thinking about Designing the programs more more or or targeting them on income. I Would say that given that these are the groups that are at risk for poverty There's an argument for permanent social protection programs such as social pensions and child allowances We heard that today's rich countries Appear to have done much better than today's poor countries To reach the poor when today's rich countries were poor my hypothesis is that this is because universal programs were were part of Policies when we went from being poor to rich Sweden is a clear example of that In the beginning of the 20th century Sweden was one of the poorest countries in Europe The first social protection program that was introduced here was a social pension in 1913 Then that was then followed by child allowances 30 years later and then successfully the programs were expanded Programs that are targeted at the poor are all also easy to cut Universal institutions that Encompass a majority of population tend to reduce levels of poverty inequality much better Because they don't have the exclusion problem problems and they have support by the middle class But of course if we look and in particularly if we look if in sub-saharan Africa today We know that tax bases are small and fiscal constraints Prohibit countries from introducing universal schemes for example looking at the young population in Africa today It would be difficult to introduce universal child allowances social pensions could be could be easier So targeting may be a way to start But if you are going to target on income or wealth you have to make the construction simple and transparent Not just because of administrative capability, but also because of it's much easier to understand Simple targeting is a way for beneficiaries to understand why they receive the benefits and how much they receive And it also makes makes pays the way for having a transparent and functioning grievance Procedure so you can complain why didn't I get the benefits when I'm eligible? The second point that I want to talk about it is of course the conditions in the in the conditional cash transfer programs That they impose on households if you were if you are to receive the transfer you need to send your kids to school You need to go to health checkups And and as we heard in Latin America this is this has had success in in health and education outcomes at least in the short run But here I would argue that Policymakers try to solve problems that may originate somewhere else by imposing conditions on the poor If you ask people living in poverty what they want, but what do you want for your children? The answer you will get is education. They want education for the children to be able to make a better lives for themselves But in the countries and the countries where Cedar work The obstacles are many. There are high fees to go to school. The schools are poor quality There are few schools and they are far away So the question if if the supply side problems will be fixed by imposing conditions on the poor One argument is that if you do this the poor could could could have a voice need will put pressures on governments to expand health and Education But I think this is actually questionable given that people living in poverty almost always lack power and voice So I think instead social services need to be part of the social protection system And ensure equal access and that's much more efficient than imposing these conditions My final point is about the the long-term perspective and that social protection really is long-term and that it takes time to build I said that you know Sweden started with social pensions in the beginning of the 20th century It took 60 years until our social protection program was fully expanded to what it is today. I Also think it's crucial to think about the design of the programs and financing together They go hand-in-hand Tax revenues are necessary for these systems to be sustainable long-term and as countries expand social protection programs They also need to expand their domestic resource mobilization. They need to think about how they're going to finance these programs the link between social protection the link between the design of the program and the financing is also crucial because if you Do that, right? You can build a willingness to pay taxes and get get get get something that's also sustainable And of course the link between the labor market and these programs are are crucial to create incentives to work. Thank you Well, this was a tremendous Tour de force by Martin the the first example that Martin gave us the first Empirical example from England had personally tremendous Resonance for me because I come from the coal mining area of the north of England and My ancestors the family history the family legends are all about actually moving in and out of poverty depending on the the cycle in terms of coal production and Avoiding the workhouse in Victorian England and certainly there's a family legend of a of a young woman Having to go into the workhouse In the early part of the 19th century And actually being separated from the rest of her family because this is what the workhouses did to Determine you and make sure that you didn't go into the workhouse unless you were in a very desperate Condition there's also actually a family legend about another member of the family who tried to solve his poverty problem by stealing a sheep and Stealing a sheep in early 19th century England was a hanging offense and he was convicted and he was hung if he'd stolen a pocket handkerchief or something smaller he'd have been transported off to Australia Martin's homeland so in some ways this This sort of set of examples, you know illustrates the the kind of political dynamics around poverty the seeking of control Over poor people But also as Martin said in the case of India the expression of people poor people's rights They're their right to demand a better future for themselves and for their children But as Martin showed it's a very complex set of Factors that you have to get together To produce an effective social protection program in some ways we live at the most Exciting time ever in terms of poverty policy as Martin said we've never seen so many people Move out of poverty. We still have deep poverty across the world But we have lots of exciting new Technologies some of them coming from new technology itself to replace the old mechanisms and old ways of doing things so for example the right to sorry the The make work programs the public works programs that India has had for many years Martin mentioned now the move over to biometric identifiers precursor now to Moving to more effective and cost-effective forms of financial transfer One issue of course with with public works programs is the quality of the infrastructure that's constructed Which is sometimes not a very good quality a very good comparison might be for example With Ethiopia which Martin didn't have time to mention where there's a very large public works program Reaching now, I think nearly 10 million people which has done a reasonable job in terms of creating infrastructure Potentially better than that of India, but you know, we've now got better ways and means to think about these issues But it's still a difficult mix because there are of course all kinds of macroeconomic Dimensions the very macroeconomic shock that might make social protection Essential to keep people out of poverty could be the same macroeconomic shop that reduces fiscal space that reduces public revenues available for that social protection Clearly as we move towards Basic pensions more universal systems of social protection It has to be within a macroeconomic framework that preserves those over time and sustains them So these are really very very big issues now Martin is very well known as an Innovative quantitative economist particularly in the use of household data and other data And something that's very much come out for me in this lecture But also in Martin's book is the importance of data and it might be nice during the Discussion to have a little bit more sense about what kinds of data we do need in the world Over 30 years We've seen much more data created particularly household level data Better measures of poverty, but I think none of us feel as researchers that we really have the data that we Sufficiently need sometimes to inform policy. I Have one and here this is the point at which I end I have one question for Martin and the question is many young researchers are thinking about careers in economics and if they want to go into Economics obviously one of the great areas they could go into is development economics and they could go into The economics of poverty. So my question to Martin is if you Were recommending to a young researcher now, what should they go out? What should they commit in their future to doing perhaps in the form of a PhD or some other piece of work? What would your recommendation be to that young person that young man or woman going out from Stockholm to work in India or the Congo in terms of research impact pieces of research that would really change policy for the better and for poor people Thank you if I could invite Martin Annika to join Tony and Maybe I could Just mention that I am deeply interested in that data point Some of you may know that at wider we we holds sort of two conferences a year and We had worked quite a lot on developing a concept paper for a data for development conference to be held in September this year and Just two weeks before we were going to announce it the World Bank came up and said we're going to do the ABC DE Conference this year in June on data for development. So there seems to be at least a shared concern about this Obviously, we were then changing so we are now going to respond to crisis in September instead But the data point is a very valid one Martin, do you have any sort of immediate reaction to Annika and Tony? Well, I think it might be efficient to collect questions. I mean I'm hoping there's Lots of questions I'm going to start over here on the left hand side if you could sort of indicate if you want to Intervene have a question and then sort of move over. Please do introduce yourself if you have any questions Okay. Yes, please. Thank you. My name is Gunnel Axelsson. They're from Church of Sweden International Department working on development issues I would echo very much of what Annika said about especially about targeting in a more universal approach and really saying as Scandinavian and Sweden listening to your arguments about targeting and the Downsides of that is quite I mean we all have it from from growing up and the political debate and all about marginal effects Etc. And and we know all from our personal life the the benefits of inclusion systems However, we can see that it is the more and you also reflect that that it's more the more targeted system that are now not only in Latin America, but also in in in Africa and Asia often promoted and we can see that At least up until now. I think it has been mostly diffed and the World Bank that has been Promoting these kinds of programs When many of the experts actually have the Anglo-Saxon welfare welfare model in their DNA to say Whereas we can see that the experiences from the universal models as we have in Scandinavia hasn't been in that influence or influential in Giving a device to development countries Of course, this is easy for us to say yes, it's good for targeting Not as comfortable maybe for to say the same thing in the United States because it Inevitably goes back to your own society and the our own system So my question would be would you think it's possible for institutions like Difford and the World Bank to actually promote to more Universal models Okay. Yeah, please Yeah, it's me. Ahuna Bransian and I'm the CEO of Center for Business and Policy Studies I You said in the beginning of your talk The need for adaptation of policy in relation to Evidence that comes from research and the type of evaluations or programs that you have described to us I would like to ask The problem of adaptation of policies what is the reason In your mind behind that is it the fact that people are unaware of the research and the evidence and lack of Expertise and actually then adapting policies or is it more maybe the type of questions of values and ideas about models or and That is behind that you don't believe in the evidence so to speak Or or or kind of have a higher higher higher type of goal with your with your Choice of a model Okay, I think here in the front with Tobian and then over here afterwards First marketing. Thank you for your excellent presentation and an overview. I think yeah This is the perfect place for this. This is a school and this was a fantastic lecture So it's also an inspiration to all of the teachers and students here. I have two questions Two different Issues you mentioned political political economy a couple of times in your talk But I was wondering how you you think of these different programs in different political Circumstances I could see big differences in terms of how much of Populism you you may fall for as a politician under certain political regimes and and how that may be different in others So under what sort of political circumstances would you promote certain policies or or avoid them? And I'm I'm thinking now in terms of also interest of Sida and other donors Where should we push push for these kind of programs under what political sort of umbrella should that be done? The other one that I didn't really think you you you touch so much on and and I think it's also interesting And I think you Annika was hinting at this is The trade-off you mentioned here was was sort of within the realm of of having Transfers, but really another trade-off is different items in the government's budget and And really is this the most cost-efficient way over time to reduce poverty or would sort of education or health care or something else Be more relevant and and one of the issues here. I think it's extremely hard also when we now say we should evaluate things and see what works Evaluating school reforms and poverty takes much longer than than maybe evaluating some of these programs Per se, so how do we actually figure out what is the most cost-effective way of reducing poverty? Thanks over here And I think we will pass over to Marty also my name is John Joyce I'm the chief economist at the Stockholm International Water Institute. Thank you Martin for a very innovative lecture and I want to pick up on Tony's point and about data and picking up on what Martin said you and his lecture on data not designed for purpose measurement errors, etc And as an economist, we always like to use the quantitative side of things, but I'm just wondering how we've used qualitative data From an ethnographic perspective and how much Economists now need to start working more seriously on qualitative data in order to reduce Specification bias and mis-specification, etc. Thank you. Okay. Thanks. You want to take care a Turn Martin a time response. These are all good comments, and I can't do justice to all of them, but Anika's Comment really I Like this this way you talked about it and I'm not sure is that really how? Happened I mean I know this a little bit about the Swedish history, but but if it was the case that that the rich countries Started with universal schemes and regressed to more targeted ones It would be very nice for my argument. So I like it, but I'm not is that really? Has that got any external validity beyond Sweden? I'm not sure but I got to look into that you know because it nicely It nicely emphasizes my point that Currently all this emphasis on fine targeting in poor countries You know is running against that Historical process and the historical process makes a lot of sense starting universal and you develop capabilities you get more finely targeted and You don't overdo it because you've still got it's little got to be politically sustainable That would be a very nice story, but so I'm going to look into that I Like the way of you described it fits very well with how I think about it. I guess but I have to look into it Data who is the point of I didn't write down then who is talking about yeah Well, you you're talking qualitative, but somebody else on data. I just can't oh Yeah, right. Okay, it was Tony We're two different very different questions. I'll do it doesn't separate. So Tony um, I Know to your two questions You know, we all know how important data is I think there's two kinds of ways that data matter here One is for doing the kinds of research and evaluation of what works and what doesn't and another reason How data is used in policy? And I think I have to be careful about those differences I see it an almost the important role for high quality surveys often times the specific programs building the capability for Survey data collection in poor places and I think that's happened in a big way. I mean you're here often here's characterization that social economic data is poor in poorer places and probably that's true, but it is a bit Exaggerated I mean you get some really good data as poor countries But data for informing research and doing evaluation When we start to take that data to to social policy then we get into a lot of trouble Because then we've got to extrapolate to much larger samples Then I start to worry. I mean this this proxy means test. It's so popular. I'm doing a study now for Africa where we're Across every country that we have data in Africa. We're just systematically going through to figure out under the ideal conditions How well does the proxy means test really work now? In the audience a proxy means test is that what it sounds like you don't observe income That's the data problem So in the survey do a good measurement of income when you go to scaling up to the policy You've got to impute incomes in under less than ideal circumstances for the purpose of implementing the policy They're very different things Proxy means test is an attempt to use a few relatively small number of variables to predict somebody's income Based on the correlates you found in the survey But you take that that model and you apply a scale it up to the country as a whole and you implement a policy Even under excellent conditions on the survey what you get in the end is really Sorry, it's very very poor indeed The the inclusion exclusion errors are it's horrible. I mean in many countries what we're finding you It's just a little bit better than tossing a coin If you really want to reach they undernourished Women and children as part of your anti-poverty policy Good, you know, this is not going to work and part of the dissatisfaction with social policy Finally target social policy in poor countries from the community perspective is they see it They just see how badly it works All right, which is part of the motivation for this study to really do a careful job of seeing how well it works And I tell you when I look at it Doesn't look good and we're basing Our social policy in poor places on this Technology so very important distinction the data you use for the surveys and the evaluation Versus how you scale up to the social policy based on Correlates you find in that data. You can have a great survey, but the correlates are still so weak The information base for fine targeted programs is very poor and you're not going to reach the groups that you Want to reach as effectively as you might like It's very subjective though. All right, there's another little observation Two people can look at the same thing. I see this repeatedly and come to different conclusions Toward late in this study that we're doing in Africa. We haven't written anything yet, but we've been massive number crunching Late in the study I Started looking at what people who defend proxy means testing which once included me by the way Until I started really looking at it seriously I Look at what the arguments they make and and they occasionally do something quite similar what I'm doing and they look at it And say oh look how good it is and I look at and say look how bad it is and it's the same thing It's a glass half full half empty There is its perception but but obviously people are defending a this technology is is taking over you're seeing it all over the world Developing countries this proxy means test technology, and I really worry if that that's going to be able to deliver again back to the point that You may be much better off with the universal program and and somebody raised these the really important issue of funding these programs I think it was Annika Remember what I was doing with that n-rega. I'm taking the budget of n-rega. They've already got a budget I'm taking that and I'm allocating it uniformly I'm not spending more money than they've already decided to spend I Don't think they're spending enough. That's another point. All right, and that goes back to the very important point that was raised by I think Professor Baker your second comment. I think items on the budget the trade-offs between Things you know this is really neglected and it silos if you look at this they've got social protection silos We've got human Development silos education they've got worse and worse as in the sense of they're not communicating each other and very few people in development Now are asking those questions about the trade-offs. Should we be building bridges or should we building schools? And we're not informing. We're not telling countries about that They want to know that this answer to your question as well, but we can't tell them We're because our research is in these silos and this is a really big problem I'm not seeing enough of that kind of Broadcross sectoral work and that's one of the many recommendations. I'd give back to Tony's second question Many recommendations I give to PhD students those bigger trade-offs that between the the the line ministries If you like and it's it's part of the politics of it when we deal with countries we deal specifically with the ministry And we're tight. We're tied to that ministry We used to have the cape much more capability. I think for the cross ministerial Debates and discussions than we have today Sadly, I think the old planning commissions the legacy of the sort of control economies that were common in In in developing countries. Well, you know the control economy was pretty much a mistake We know that market-driven economies are much better producing growth and all of that fine I think that's pretty well established, but the planning ministries all got axed with one with very few exceptions some stayed But they were doing different things We didn't we gave we threw the baby out of the bathwater You know the baby was the the capability for making those broad cross sectoral Prioritizations in public finance. I think we've got diminished capability in that area The silos have not helped other questions the how to get more universal programs this is The person from church of Sweden very first question You know a little bit uncomfortable with this Anglo-Saxon versus Scandinavian model characterization, but okay, that's not a big issue I can live with that. I'm an Anglo-Saxon side, but I'm thinking I don't think that and certainly wasn't just Scandinavians or Nordics or whatever you were talking about this this is goes goes way way back Certainly lots of discussion of this in the 18th century there was Anyways a lot work could say there, but that's more history of thought stuff on your the more much more important question How do we get well bank and DFID? Well, I think DFID is pretty much following the bank on this How do we get them to talk about this scope for universality? Well by by me and you and discuss them in discussions like this You know, I've tried for 24 years good to get the bank and the fund to Think differently about targeting, you know, and I will acknowledge it as one of my greatest failures It's so embedded You know target the thing finally this word targeted you'll do any you're sure spend money on poor people, but target it really well In situations where you don't have the capability to do that credibly It's really you're you're you're just and in the end it's poor people Not getting the benefits and the self they should be getting because in the end you have to judge it by impacts on poverty not by targeting It's a mantra that has been very hard people will you know smart people will obviously recognize my arguments and and agree But it's become and in fact again the silo of social protection In the industry of social protection has not helped either So I don't have an answer to that I think we just got to keep That that's that thing I keep saying that targeting is not the objective It's poverty reduction now we can debate about what that means But I think we've got it. We've got a pretty clear idea and we can talk about specifics, but Keep your eye on the objective In terms of people's welfare and how you get there and the more we can emphasize that the better What have I left out of me is comments on the I Think a lot of it is is the politics of capture and bureaucratic inertia. I think it's the main Reason we don't see more adaptation to it from evidence that in programs become embedded and they have a Lobby group in the government and they have a constituency and they're fighting for keep their program all the time And we see that repeatedly and that's not not a that's not just a problem of developing countries You know everywhere we see that and that kind of Entrenched support and a bureaucratic inertia and protection of the your favorite program is the main reason I think and we just have to call that out and Now a lot of this is a researcher I always think what I'm doing and other researchers are doing is really doing just that calling it out You know informing a public debate with evidence to try to move it on a bit and that's really the main Point of my lecture on the John's point about the qualitative data. I I'm I've never ever thought you could only Study poverty and inform anti-poverty policy with qualitative data. I find it very limiting But equally well, I've never thought I Well, that's an exaggeration. I probably once thought you could do it with only quantitative data, but I've now Come to the view you need both But you don't need it in the way it's it's often used I mean, I'm a big fan of doing qualitative work after quantitative work You know Not before or in parallel with So I'd really like to see more economists doing this. This basically means do your quantitative work Every time every study. I've done almost everyone. I've had puzzles You know what we do in economics and empirical research is very black box like we have these black boxes You know, we can't see inside them with our tools the worst case of course the randomized control trial is it's a complete black box About how you got the outcomes that you got But but everything it's not just a problem of RCT. So I mean a lot of what we do in economics is very not very It's not very revealing about the process is empirical economics It's not very revealing about the processes that generate impacts and I find actually talking to people I don't I think I'm I'm much better at quantitative work than qualitative work And I always try to get people who have the reverse comparative advantages to work with me But I think you can learn a lot about processes of how things actually happen by talking to people and Subduing subjective data in intelligent ways as well recognize its objective, but but you can still learn from it. I Think I left anybody out. I think I've covered most of the questions. That was pretty on array Other questions. Yeah, please here in the center and then here My name is Odie. I'm a PhD student from South Africa. So I China's been quite successful in Regicing poverty and I think the num if you look at the numbers the The global numbers a big chunk of that is coming from China Can can we attribute all of that to growth and and if not What can how much can we attribute to grow to growth and and where do we have attribute the rest? Okay Here in front My name is root Kipam Shana. I'm a former a diplomat and a former banker originally a synologist my question in my question I want to introduce another kind of silo and that is the silos we see dominating the Many countries in the emerging markets And I'm thinking of a traditional Structure social structures like clans case and so on the Indian case system you could call an infline inflationary rigidity in the Indian labor market and my question is Since these social structures frequently seem to operate as poverty traps How do you eliminate a poverty in countries where? The strength of the social structures exceed that of the state Possibly looking at the fiscal revenue relative to GDP. Thank you Okay Are there questions? Okay here over the back Sorry sure absolutely. No, please go and then we take the other one out. Thank you for a very interesting lecture My name is Christina. I'm from the trade unions I have two questions the first question is in the in the beginning of your lecture You mentioned the fact that rich countries of today were better at targeting the poor When they were poor and it would be interesting if you could elaborate on that and explain why why was that? the second question is the the factor of a weakening bargaining power of the trade unions and the lower level of union unionization in the world right now and how that would affect the the possibilities of protection and promotion And in some countries like in Sweden it is actually the the two-part model that sets many of the protection and promotion policies So how would you see that? Thank you Thanks, I did not be in the back Thank you professor Rebellion my name is Damir. I'm economist working at Stockholm peace research Institute The question goes partly to your case studies when you mentioned in China case That knowledge through the movie you provided didn't really transfer to action So the question is what helps to move people from being knowledgeable being informed Changed attitudes and moving to action change in behavior Okay Thank you I think we will pass over to you Martin and then Tony and Anika if you have any Okay, the I'll try to go and order this time rather than chopping around the the South African PhD student Okay, so there's two levels of answer to your question First is a kind of almost a mathematical level. You can think of a change in poverty is determined by growth in part and changes in distribution Okay In a narrow sense All of China's public deduction has been due to growth rather than changes in distribution because distribution has got worse Relative distribution in a relative inequality in China has been on a trend increase over 30 40 years not not not sort of all the time increasing not monotonic as we say but but Some periods falling other periods, but you know the trend at the upward has been dramatic In fact, if you just extrapolate the trend in China's inequality Back over the last 30 years, you know, it's going to be the same inequality of Brazil within 10 years But I don't think that'll happen And I actually think it's topped out I don't think it's there will be little bit of limits because there's changes in the Chinese economy particularly coming from the absorption of rural labor China started from a situation of Massive it's a classic go career Lewis model We had massive labor surpluses wage rates were no then no upward pressure on wage rates for a long period That upward pressure is now emerging wage rates are rising at the low end in China The capital is actually starting to ex-leave China looking for lower wages elsewhere And that's a very good process That's it's great good news because real wages are poor people who were poor are rising and that's great Going forward, I think that'll put a there are other things that involved too, but that's one of the big economic changes It's going to Put a break on the right on rising inequality, but there are the forces Working in the opposite direction. So we'll see what happens. That's the easy answer All right now they go up to go a deeper All right, and when you go deeper it gets more complicated I'd point to a number of things that were really crucial So then then you got to ask well why what to determine the growth what to the inequality what to what was going on? What's under the surface? There are a number of things. Um, I Actually think the sequencing of economic reform China is one of the few developing countries that know you got that sequence roughly right It started with agriculture and rural development Moved on to a basic industry. It moved up a kind of a sensible ladder In its policies, this is a highly interventionist economy This is amongst developing conneries with high with good with a lot of administrative capability They can do a lot they can also make big mistakes as they often have Some of the greatest mistakes in human history Like the Great Leap Forward and the Cultural Revolution, but but um When you when you the sequencing and reform from Deng Xiaoping's initial impetus for reform in 1978 focused initially on agriculture and Rural development has stayed with that for till mid to late 80s and and then started to move on to industry and that Sequencing was roughly right actually think they moved on too quickly I think they could have had an even more dramatic poverty reduction and it is astonishing what happened the absolute poverty reduction is Fastest and great largest in terms of the sheer numbers we've ever seen Could have it could have done better with if it if it had stayed with it was a lot a lot of the agriculture and rural agenda The grand reform agenda was left undone by the time the industrialization push the TV is the Manifest export led manufacturing growth by the fight by the time that started to take over in the trajectory for poverty reduction Well, the bulk of the work is still was done by a rural poverty reduction in China Another aspect that they got right I think Which was there is a very important lesson this the first is important lesson for Sub-Saharan Africa because Very few countries in Sub-Saharan Africa have got that sequencing right they've tried to they've gone straight for industry They've neglected agriculture and that's been to their peril and that has not helped their poor the poor so Second thing is as evidence-based policymaking We don't think of it and actually the politics was driving the first as well But it's the second especially the politics here was that you had a potential food crisis in China in the late 1970s that they really had to address a food security problem We're massive, but there's the second very important thing was in the sequence is in the The way they learned the way they tailored their sequencing a reform and the specific reforms the two evidence now Denk Chopin again. He said seeking truth from facts That was a political reaction to the culture revolution to ideological based policymaking and there and and it was so important I They didn't have the tools To do good evidence-based policymaking yet, but they had the culture of evidence-based policymaking as a reaction to to now essentially And that was really important so you saw all the time they were looking Experimenting the program I talked about today the debauch program that emerged out of an experiment in Shanghai They they try and all these experiments going on all over China They still are and they're looking at them and learning and all that seems to work. Let's do that Yeah, when I look at the quality of their evidence, you certainly don't see randomized control trials, but you know, maybe now The quality is is not always there, but the culture is there, and that's really important And that's another lesson for sub-Saharan Africa So there are there are deeper deeper answers to your question. There are other things I could say, but I think that's Start um The question about silo social structures. This is really hard And the caste system in India particularly has been just so Hard to change it's um, and I don't have an answer I I see it all the time at the Now all the time we're worried about social exclusion We're worried about social exclusion in everywhere from from be hard through to Brussels And and we're seeing it all the time And this is partly why I emphasize the importance of thinking about relative poverty as well as absolute poverty You've got to look at both and that's really about the concept that sociologists have and people like going back to people Like Peter Townsend and Bretton social exclusion is is hugely important as a concept in my view I have there are debates about that some economists are not so fond of the idea, but I like it and I can't it gives me a way of understanding a lot of problems and the lack of inclusion associated with the rigidities in India's labor market associated the caste system is is just Horrible it's horrible for the information transmission for learning about public programs not as well as for the labor market I Don't have any simple answers You know the India's been Officially if you've been fighting the caste system since India has been a country. I mean since it's been an instance in Paris 947 that the struggle has been going on to But it's it's still there. It's alive and well What do you do? I don't know There's a nice topic to add to the really tough questions that Tony would like to give PhD students and I Needs it needs a lot of focusing though before you can turn it into a researchable question but certainly we have lots of research on the implications of Cast and clans social structures the costs of those the economic costs of those and and the Effective policymaking as well, but in terms of research on how to change it. I don't know Um Christina's question rich countries. I Think the answer rich countries doing better targeting when they were no poor I think the the answer goes very much to the previous discussion about Universality, but I put that out as a hypothesis that where was it? Where is Christina? Oh, yeah, sorry I put that out as more hypothesis that Rich countries will were more successful in social policy early on because they they better Tail it what they did to the capabilities they had administratively the constraints they face politically but That's that's that's my contention, but I can't prove it, but I think that that was important I think the decline of unionization is a big concern You know I'm sort of I I Worry a lot about Internal labor markets. I worry about dual labor markets. I worry about the problems of labor market rigidity I don't think there's a hell of a lot. We can always do about that, but I think making I can see the potential for gains to poor people from Making labor markets work better more effectively, but I don't think unions need to be against that so I think a lot of the If the union movement was more sympathetic with the arguments the people like me make about labor market flexibility in the scope of poverty reduction We could make more progress But labor movement has been a by-and-large a hugely important progressive force in the history of fighting against poverty But not always and we should recognize that too And the point about labor market flexibility is one example You know, I think I can give you others too But by and large my answer is that yes, it's it's a big concern And I think it will make it harder probably To achieve the kind of social consensus that we need particularly around I mean, I think we have a social consensus around poverty reduction I don't think we have anywhere now a social consensus around inequality reduction We just have continuing debate and I think The labor movement in What's left of it in the United States could be hugely important here, but I'm You know that achieving that social consensus will be about a lot more than that It will be about trying to unpack this concept of inequality trying to make the it's like it's what about Barack Obama asked He's a bunch of people were invited to the White House Last year and he asked them them people working on US inequality and he asked them How do I talk about inequality in America without being accused of accused of class warfare of Instigating class warfare and that's a hugely important question. How do we get? How do we get that discussion about inequality? To be much more focused on the costs of inequality much more focused on what aspects of inequality are really damaging a generalized discussion is just not going to get the social consensus and I but I think The labor movement could be very important part of that Damien's question on the I thought just a little clarification the movie was about India not China But that's not important and the lesson was that There are two things it's who things are broken right people's knowledge about their rights poor people don't know what is due to them and The public sector is not responsive to their needs and that both things come together to mean they don't get What they're entitled to and that's poor service delivery, which we see all the time service delivery to poor people is generally poor right and it's the combination of their lack of knowledge and The lack of a responsive supply side, but the two are kind of working together You know the lack of knowledge is often part of the reason why the supply side is unresponsive local leaders don't share information Because it reduces their power. They have all kinds of rents that they get out of that process so it's all kind of It's like a knot and you got to cut it somewhere to unravel it and what this study at the movie did is Tell me this is the point the whole point of it was to see whether just changing knowledge Would make better service delivery. Is it just about telling people? their rights under the law and To to say they know and the answer is no it isn't That the supply side and he also needs to change. So so the knot is not unraveled that way You're gonna have to have both. They're gonna have to know What did what is due to them? What and then the supply side has got to be more effective in delivering it Okay, just one last question Martin in your all the work that you've done And all the countries that you visited what has most surprised you for good or bad What is most surprised me? Any other additional last question No, no, I was just thinking about the point about looking at it as systems And if you can elaborate because I think one another reason why Sweden has been been successful Transforming from Port de Rich was that that during that period we saw it as a system and having Protection programs that also supported labor force participation and you know enabling both women and men and work by introducing subsidized child care and so on I mean it took took some time, but but been really thinking about it as Getting people onto the labor market So any thoughts on that? Martin? Well, again interesting thought, but I don't have any any comment Um, I'm more than what I've said. Uh, what surprised me the most? Oh, goodness. Let me think Oh, um Going back. Um, something you never would have expected that theoretical economics would not have predicted that Oh goodness other no surprises in the world Yeah, lots and lots, but I'm looking for the the number one surprise Yeah, you you asked me not not did anything surprising. Yes Much harder question. What was the most surprising thing? um the time Because I've seen a lot of time comparing China and India and My prior I started in India obviously, and I've been working in India for 35 years, but um I came to China in early 1990s and um And and in India there's a lot of focus on China You know people are really very interested in China and you get a discussion all the time so and I was going to China is more sort of somebody, you know I didn't think I could ever be an honorary Indian citizen, but I would love to Think of myself like that a bit and um as somebody coming from an Indian perspective And China was a big surprise Um, I was surprised at the administrative capability I was surprised at the but more subtly. I was surprised at the capability To get things wrong too Um, and I would ask myself If I was reborn in in kind of hindu style Uh as reborn as a poor person in a village in india or a poor person's a village in china Which would it be? and After about the first few trips in china and working in the field in southwest china and Sashi in the lowest plateau region. I was pretty convinced that the answer is china And why this is the most I guess the number one surprise because I'd be freer Here we've got a country that's not a democracy India is a democracy the largest democracy in the world And yet i'm saying that if I was poor In a reborn poor in an Indian village versus the chinese village I'd rather be in the chinese village because I'd be freer because I saw Poor people in chinese villages who did stand up for their rights And when they were trampled on they would they would fight they had a you know, they you couldn't do to them What I saw being done To poor people in in indian villages So that I guess number one surprise that When you think about freedom and democracy There's many levels of it You know I sure China is not a democracy at the the highest level of that term But there are are more subtle and finer grained Interpretations of what that means Okay I said in my opening remarks that Martin is a global leader in the field of poverty analysis I certainly think we got that demonstrated today both in western in terms of depth I'd like to say thank you very much Martin for a magnificent wider annual lecture I'd like also to say thank you very much to site for collaboration and to see the for support and I'd like to Thank for the engagement in the lecture You're all invited to a reception outside where the discussion can continue and you can Engage on the questions that you did not ask but I would like to ask you to join me in a big applause for Martin. Thank you very much