 Hello, everyone. Welcome back to Conversations with Tyler today. The guest is Michael Kramer recent Nobel laureate in economics Michael. Welcome. Thanks. Obviously you're famous as an economist, but I'd like to start with the notion of Michael Kramer as founder. In my notes I have it that you found it at least five nonprofits with the six to come. What is it about founding that for you is so enjoyable. Oh, that's, I do like doing that. And, you know, I, I guess I, it's great to feel like you're having impact on people's lives. And I think that some of the things that I've founded have gone on to have that impact. You know, that's very exciting. And it's obviously also an intellectual challenge to think about how, how to, how to put things together and how to grow a team and, and get something, get something moving. But what comparative advantage of yours is it using so a lot of economists will produce ideas and let other people do all the founding, right. So what, what is it that you bring to founding that's special to you. So, you know, I think one of the things as, as I think there's a lot of relationship between the experimental method, and, and the things that are needed to help found organizations and I think that's something that I think there's historically in economics, many of us have seen research as something that's divorced from doing things in the real world. And in some cases, even antithetical to it. It's really different in many other fields. You know, if you look at nobody thinks it's strange that people who are in, in computer science go on to found firms or that people who are researchers and in biology go on sometimes to found firms obviously there's plenty of people in computer science or in biology who aren't interested in that, but people don't think it's strange that there's some people in those fields who do. And I think we're now getting to a time in economics where I don't think I'm, I'm unique in this I think on many economics researchers, researchers in development economics in particular have gone on to found organizations, and, and those have had had real impact. So let me, I could explain a little bit more about, I don't think this is exclusively tied to development economics into the experimental method, but I could explain a little bit more about why I think the experimental method and and contemporary development economics research does have a natural affinity for that. That I get why you have a natural affinity. So if I think about your O-ring model, as you know that predicts the less productive people in an organization in a way drag down the productivity of the more productive people. Now you're one of the most productive people. You might think according to O-ring theory, you know, maybe you should found with Abhijit and Esther, but not with anyone else, right. There's not a certain kind of comparative advantage in that model. So how do you think about the economics of you as founder? What, how should I model that? Well, you know, I think that I'll just give, you know, an example. I guess the most recent thing that I've been involved in, in founding was co-founding. It was an organization called Precision Agriculture for Development, and what that organization does is it, it's based on mobile phone based agricultural extension, or at least that's where it started. It's now broadening out. And, you know, that's something that requires, we use tools from experimental economics with AB tests, we use ideas from behavioral economics, so it's using a lot of tools from economics. But, you know, it also takes a bunch of many other skills to, to found things and to operate an organization. So I don't think it's a matter of those other people being less skilled. I think it's a matter of people being skilled in different areas. Do you think you will ever found a for profit in developing economies? I don't, I don't, I don't have any plans to, but I don't know, I don't always have plans, have plans in advance, so who knows. And what's the first organization you founded or co-founded? The first organization was an organization called World Teach, which placed volunteers. I spent a year teaching secondary school in Kenya. And after teaching in Kenya, when I was living in Kenya, I'd be asked to teach in schools frequently. And it was, at that particular time, I think the situation's really changed. There was a lot of demand for, for teachers. And there were lots of people in the US who are interested in volunteering. So it seemed there was a role for something to match them together. That was one organization, but, you know, I've, I've more recently, one, one, I guess, a lot of people who found NGOs often go on or found organizations, sometimes going to be funders. People go from being founders of for profit tech firms to being VCs. And, you know, one organization I've been involved in for 10 years now is Development Innovation Ventures, which is part of the US Agency for International Development. And what USAID does is, I'm sorry, what Development Innovation Ventures does is it, it helps invest in innovations for development. Sometimes those are nonprofit organizations. Sometimes they're for profit. Sometimes they're started by development economics researchers. Sometimes they're started by, by, by others. And one of the reasons why I think, why I was saying that I don't think this is something unique to me is that, you know, when we've looked at our track record, we see quite a few, I think a really strong record of success. And, and a lot of that is development economics researchers. Now your current work on advanced market commitment. Why do you think that advanced market commitment is more politically popular than patent buyouts? Right. Maybe it's useful for me to give a little bit of background on this. I had written an academic article, many years ago, proposing a particular way to that the public sector could, the government could buy out patents and then put the, put the intellectual property in the public domain. And the idea is this would provide a way of rewarding innovators without some of the distortions accompanying monopolies. And, you know, I think I like the idea academically, but it didn't really go anywhere politically. And, you know, the idea was, I was thinking very much about pharmaceuticals. And I think this is speculation, but I think the pharmaceutical firms are very, they're obviously very attached to the current system of intellectual property. And I think they felt that they may have felt that if they sold their patents and put them in the public domain, that would weaken the legitimacy of that, of that system or it was just very different than what they were used to. Whereas, the idea of selling their products wasn't so much. And so you can avoid some of the distortions of monopoly. The monopoly, you know, one of the key distortions of monopoly is that when the price is high, when there's monopoly pricing less of this gets sold, when less of this gets sold, you know, that's harmful for, for many products, but in the case of pharmaceuticals, that can be, that can be very harmful to human health. So the, the approach was commit in advance to buy the efficient quantity at the, and then some, for some products in particular vaccines, it's fairly easy to know roughly what the efficient quantity is in advance. So commit to buy that in advance, and then that can get to the both create incentive for vaccine development and the efficient quantity to be, to be purchased. In the case of many childhood vaccines, the efficient quantity is enough to vaccinate and pretty much the entire birth cohort, obviously, practice you can't reach quite everybody. So that idea was, that idea did turn out to be politically acceptable. And a number of countries, together with the Gates Foundation, pledge $1.5 billion to finance the purchase of a vaccine against the disease called pneumococcus. But in particular, there was already a vaccine for the strains of pneumococcus that were common in the developed world, but there had no firm had yet developed a vaccine against the strains of pneumococcus that were common in the developing world. So that they pledged that firms did develop that they would, they would purchase it or they would help finance the purchase. And that led to three, three different time pneumococcus vaccines have now been developed against the strains that are common in the developing world. And 700,000, you know, hundreds of millions of people have been vaccinated and 700,000 lives are estimated to have been saved by those pneumococcus vaccines. So I think that's a tremendous example of a success. I would actually, you know, often when we think about founding we think about founding organizations. That wasn't the case of founding an organization. But it was a case where a lot of issues had to be thought through the economics issues, but many other issues as well. And, and the policy took, or I don't want to say the policy took off or the policy was adopted in the case of pneumococcus and then there's been additional work to try to use this in other other settings as well and a few other examples. So the political economy and legitimacy issues aside, is the main micro difference between patent buyouts and advanced market commitment, simply price versus quantity uncertainty, or is there some other kind of strategic behavior that might make advanced market commitment better. How do you think about that trade off. Let's say you didn't know what was the quantity that you needed. Yeah, so I think it's very hard to, I think it's very, very hard to use advanced market commitments for innovations that you don't even know that you need ahead of time. So in the case of, let's say malaria vaccine, we can say, look, we know we need a malaria vaccine or. And you can, you could potentially say, we have a process, FDA trials or the European equivalents or others for, for deciding when something has passed that goal. So then you can use an advanced market commitment. If you think about the opposite case, let's say the post it note. You know, we didn't know we needed the post it note until it was developed. So it's very hard to have an advanced market commitment or price or something like that to, to get to incentivize the development of innovations that we, we never knew we needed until they were invented. And so I personally think it would be worth seeing if we could explore patterned buyouts as well. I think that there's a different, there are different tool for encouraging innovation that's worth considering. Do you think your ideas on advanced market commitment can improve say how military procurement is done today, or do you view that as another example of advanced market commitment. There's something special to doing something in very limited doses, some malaria vaccine, COVID-19 vaccine, this sort of hit and run approach you enter you leave. It's hard for outside parties to gain the system very much, but if you do it over decades, there's eyes and hours military industrial complex, and the big mess that you get right with high costs a lot of overruns. Is that AMC, or is that somehow people not heating your work. So I would say, okay, so I break that into pieces. So, you know, I think one, one question that you raised is, oh, if you do this over time, maybe people learn to game the system. I think that could be true. But I also think that the system designers will learn over time how to do it. And I think that's one big insight from the experimental method. That, yeah, it's not just the experimental method, but we've sort of rediscovered it there, which is something that every every founder, every innovator knows, which is it's not a one time event you've got to you need a continual cycle of testing, adapting, you know, coming up with a new version, etc. So I think there are a lot of details and how you implement an advanced market commitment. I don't want to claim that you know everything that the pneumococcus advanced market commitment got everything right. I think it probably could be improved over time. Obviously they'll be learning learning on both sides of the of the table on this issue of the political economy. Let me, let me, without going to the military example, let me say one thing that I am concerned about with advanced market commitments, which is, I think there's a tendency. So, you know, we Rachel Glenn, I wrote a book on advanced market commitments proposing the idea we focused on malaria. We set up where I was involved in in co chairing a working group at the Center for Global Development that working group recommended both a technologically distant target like malaria and a technologically closer target pneumococcus. What the political system went with was that technologically closer target pneumococcus. I think that I think that partly is due to political economy reasons. You know the politicians want to quick when the bureaucrats wanted to quick when, and their firms, or other entities, they're going to be pushing the things that they think they've got a technological advantage on their technologically close. So I think that is an issue and I think I personally I think it would be from in terms of the economics. I think it would make sense to really try a technologically distant product. I think some of the, some of the, I think there's some advantages of advanced market commitments for technologically distant products. So that's the political economy issue that I would say is, I don't want to claim it's the only one, but that's one that's most prominent for me. And then you would nominate that specific so seller powered space stations a trip to Mars or what do you want to do. Yeah, well, look, I would love to have say a malaria vaccine. I think would be, you know, would be a be a great example. I think there. Let me give you another example and look I'm going to give examples that are from the world of development economics but I completely agree with you these could be used and many other settings as well. So a lot of people in developing countries cook with, you know, a small fire in their house, and that creates incredible indoor air pollution. And that's estimated to kill millions of people a year. It also produces not just carbon emissions but some things that are some chemicals are actually much much worse for global warming than that per per unit of volume. And there have been efforts to develop cleaner stoves and that now those haven't gone that far, in part because they haven't found something that consumers want to use. So I think that's actually a great case for an advanced market commitment, because part of the idea of an advanced market commitment is you have to meet certain technological thresholds. But you also need to get customers willing to put up something. So we could say, look, if somebody produced a cleaner stove. And if consumers were willing to pay $10 for it or then there could be an additional $20 or $30 worth of subsidy, for example, I mean details would have to be thought out. And that would be another example. But sure, just so that we could have things to reduce recidivism rates, we could have programs to address educational challenges. There's a whole host of areas in high income countries or in the United States where we could really, there are technological challenges that for whatever reason are not attracting quite the level of effort that tech companies are putting into other fields. And if we want more innovation, we could promise to reward that. If you think the market risk premium is off for very large investments for biomedical research, do you think the same is true for smaller investments? That is one of the micro foundations of what goes wrong with the market risk premium on biomedical investment. Does it plague all venture capital firms for biomedical ideas, or just the big stuff because it's a liquidity issue. And so for vaccines, we need advanced market commitment, but for ordinary investments venture capital will work just fine. What's your view. Oh, I, you know, there may be issues around around risk. I'm not that's not necessarily where I would go first in terms of the market failures associated with vaccines. You know, the first market failure associated with vaccines is just a straight communicable disease. If we thought about individuals buying vaccines on their own. If you take a vaccine, that benefits would benefit you if you're closer nearby but you know indirectly it even benefits you because I don't affect somebody. They don't infect somebody, you know, eventually that they don't infect you. You could subsidize only the buyers right you could have vaccine vouchers, let the production side take care of itself and capture the externality that way, but presumably there's something wrong with the generation mechanism. So I, it turns out, you know, there's a there's a whole host of distortions here. So we do subsidize vaccines governments are do a lot of the purchasing, but governments are, I think then there's a commitment problem, at least in some countries, governments aren't necessarily going to pay the full social value of the vaccine. They may pay less than that. And, and if if that's the case, then firms won't might not be adequately incentivized, they may be incentivized but maybe not adequately incentivize to produce to produce the good if we think about something like malaria, for example, there are many different governments involved, you know, many, for example, many small African countries, no one of those countries has an incentive to say, Well, let's, let's, let's pay, let's pay a price that would generate the socially appropriate incentives to develop a lot of vaccines. So there's a global public good problem there in addition to everything else. So, there's quite a few distortions in vaccine markets. I think that I think that in general, however, we don't think that monopolists capture innovators capture that much of the value. There's a fairly small fraction of the social people have estimated the social rate of return to private investment R&D often estimate numbers like 70%. So, I don't think it's limited to vaccines that might be an extreme case, but I would actually be in favor of trying to boost R&D incentives in a wide variety of fields, not just not just some of the ones that are that we've mentioned so far. There are some estimates, they're actually from one of the groups you founded that a deworming pill could cost as little as 50 cents a year per person in many parts of Africa. So why isn't deworming done much more. Oh, I've actually been, you know, very, you know, you could say the glass is half full you can say the glass or half empty you can say it's half full or you can say it's, you know, almost three quarters fall I think it's about three quarters fall. So, you know, I, when I first got involved in deworming it was testing a small NGO program. We found, you know, phenomenal effects of that. So, you know, the original work found education health gains and education gains. Now we've found we've tracked people over 20 years and we're seeing people are have a better standard of living there anymore. Following the early results here we presented the results of government of Kenya to the World Bank. Kenya scaled this up nationally, then, in part, with assistance from the World Bank, primarily just to remain some of that information, Indian states started doing it, and then the national government of India took this on so they're reaching, you know, low but hard to know the exact numbers but probably 150 million people a year. So it's, and you know, many other countries are doing this as well so it's actually quite widely adopted. But there's still a massive residual right. What's your best explanatory theory of why the residual isn't smaller. It would seem to be a vote winner. African countries fiscally are in much better shape than they used to be they're more democratic. Public health is looks much better the response to COVID-19 has probably been better than many people expected, say in Senegal, possibly in Kenya. So why not do deworming more. So, you know, I think that there's the people who have worms are pretty poor people, the richer people are less likely to have worms with any given society richer people are probably more politically influential. There's also something about, you know, if, if worms are, they gradually build up in your body, and one worm is not going to do that much damage the problem is when you've got lots of worms in your body that and even there it's going to take time. So you, it's not, you know, I've had malaria. I don't think I've had worms. I hope I haven't. You know, when you have malaria you feel terrible and you go from feeling fine to feeling terrible and then you take the medicine you feel great afterwards. If you've with worms it's much more like a chronic thing and you when you expel the worms from your body that's sort of gross. And so you don't I don't think even at the individual level, do you have the quite the demand that you would that that would be to measure it with the scale the problem that's sort of a behavioral economics explanation. So I think there are political issues. And then I think there are behavioral issues. I would actually say that a huge, huge issue. This sounds very boring, but this falls between the Ministry of Health and the Ministry of Education. You know, the, the, the, and each one of them has different priorities. You know, the Ministry of Health is going to be, they're worried about delivering things through clinics, they're worried about HIV, malaria, tuberculosis as it should be. The Ministry of Education thinks, you know, our job is to, you know, they're worried about teacher strikes. So it's very easy for something that falls between either fall between the cracks or be the victim of turf wars. And, you know, it sounds, it sounds too small to be, how can that really get in the way, but I think anybody who spent time working in governments understands those things can very easily get in the way. I, in some ways it's surprising how much progress has been made. But I do, I, I'm actually, here's one way the political economy works in favor. You know, if you're, you mentioned democracy, I think that's a factor. I think when you've got, I actually find, I don't want to be necessarily a big fan of politicians, but in some ways, politicians hear how much this costs. And I think they can affect that many people for that small amount of money. And they're like, Hey, I want to get on that. You know, maybe I could, you know, this is something I can claim as an achievement. So I, you know, I, we saw that in Kenya, we saw that in India. I think of Michael Kramer on the issue of economic growth. I see at least three stands strands rather. The first is the very famous population paper. There's a kind of increasing returns with market size. The second is your I think 1993 JME paper with Larry Summers, good policy or good luck, where growth rates vary a great amount. And a lot of that is due to luck or positive real shocks. And then there's the work on education, which would seem to imply growth is pretty stable over time because human capital doesn't change that rapidly. The current Michael Kramer of 2020, sort of, how do you put that all together and think about growth in the in the best possible model, where do you stand now. So I've actually so, so one insight is from the study of growth is a fundamental driver of growth in the long run is technological change. And so I think one thing that we economists should be thinking about more is what are the institutions to increase the rate of technological change and to try to direct it to human needs. And that's one of the reasons why I've been excited about advanced market commitments, patent buyouts. I think, you know, we've got a set of institutions, primarily intellectual property institutions, but also research funding institutions. And those, I think we should be experimenting and trying, trying new approaches to this and, you know, trying to improve things over time. So I would say that would be one key message about about economic growth. Another, another paper that I'm working on recently with Jack Willis and Yang Yu, you know, looks at something that. So when I was in graduate school in the 90s, I studied economic growth Robert Barrow was my advisor. You know, one of the things I learned is that there's not unconditional convergence. Poor countries, some models predict poor countries would catch up to rich countries, but, and maybe they do a few condition on a few take countries that have similar policies or similar human capital, but overall country poor countries don't catch up. Well, you know, I was teaching my class, my development economics class a few years ago, and thought my better update my slides. And, you know, we looked at looked at that again. And that's totally changed. Actually, since the, you know, this was something that was after the nine days, this pattern changed. Now poor countries are catching up to rich countries. And it's not just driven. This isn't just a matter of India and China. Or, you know, this is a broad based phenomenon. So I think that's something that I think is very exciting and very encouraging in a world where within certain countries there's been a pair of increases in inequality. If you look at a global level, there's also been this tremendous lifting of people out of poverty. And I think that's very exciting. And don't you find it puzzling that the global economy is really much larger than 40 or 50 years ago, but total factor productivity or measured rates of innovation seem to be down. The pharmaceutical pipeline, at least pre COVID is commonly described as drying up or slowing down. And yet there's so many more consumers out there for drugs. Does this in some way invalidate or raised out about increasing returns to scale theories that maybe market size doesn't matter very much. So my, you know, the, the view that we took that I took in my paper on the 90s on this was very much, you know, follow, you know, I was a near contemporary of Chad Jones. And I think Chad's fundamental insight, you know, there are, you know, technically first Chad, what's the production function for new technologies, clearly having existing technologies helps you invent new technologies. So having calculus helps you invent spacecraft or aircraft. On the other hand, it's not clear that it helps you that you that improvement in existing technologies helps you one for one in in in developing new technologies in some sense it's getting harder and harder to invent new technologies. And, you know, Chad's work at the time showed that and more recent work that Chad has done. So we're facing a in that world, we're facing it's the task of technological advances getting harder and harder over time. We see that the macro level, see that at the micro level, we see that in the increasing size of teams needed to develop new innovations. The task ahead of us is getting harder. And that means that where there's a race between the total resources that are going into innovation, and the, and the increasing the increasing difficulty of the task. So you have those two forces operating against each other, I have no doubt that the increasing size of the market and the fact that there are now many people who are contributing to technological changes helping us. And the issue is, we're, we're, we've got a harder and harder task ahead of us. But if there's some constraint out there limiting the benefits from larger market size. What is indeed the constraint you would wish to target. So you're Michael Kramer you're put in charge of everything. And you can target the constraint that's slowing down growth. What's the first thing you look at. So, you know, if you. So the first thing I would look at is the thing that we have the most control over, which is the institutions we use to try to advance technology. And so, if you believe Chad, and you know I, I do on the, there's just something fundamental about the technology that about the progress of technology, which means that the, that's getting harder over time to, to have a constant growth rate and we invent more technology, but we don't increase the growth rate over time. And that's, that's just something inherent about technology. Obviously that could change. Could be that when we get AI working well enough, we actually get to an incredibly virtuous cycle, and you know we head off to a singularity where, you know, the AI gets smarter and smarter over time. So there's nothing, we don't know whether that's a fundamental constraint. But if that's whether that's a constraint or not, there's not much we can do about it. What we can do is we can think about the myriad institutions. We talked about IP institutions. There's also research funding questions. Should we be funding research the way we do, or should we be saying, look, it's not a matter of writing a grant proposal, you know, after once you're five years past the PhD, we're going to fund you based on what you've accomplished, not based on your grant proposal. And that's a, you know, one example, I have no idea what the question is what the answer is to that. Should we have, you know, should the committees be be different size and they are now, should they be. Should we say that we're going to fund something as long as somebody really likes it rather than take the average of the committee view. There's a bunch of questions about what the optimal way to do research funding is. And I think we should be experimenting with us, trying to learn more about how do we set up institutions to questions about research publication process to try. That's the thing that we can control. And I think that should be a priority for anybody who cares about economic growth. Let's say the current Michael Kramer sets up another high school in Kenya. What is it that you would do that the current high schools in Kenya are not doing what would you change. You're in charge. Right. So I think we've, you know, the. I think we've learned a lot in education research in recent years. So one thing that we saw in Kenya, but was also seen in India and many other places is that it's very easy for kids to fall behind the curriculum curricula in developing countries tend to be set at a fairly high level similar to what you would you'd see in Iraq countries. However, kids are facing all sorts of disadvantages and there are all sorts of problems in the way the system works. It's often high teacher absence kids are sick kids or kids don't have the preparation at home often. So kids can fall behind the curriculum, but whereas we've had the slogan in the US of no child left behind in developing country education systems focus on kids at the top of the distribution. So what's been found is if you can set up and there are a whole variety of different ways to do this, either remedial education systems or some technology aided systems that are adaptive that go to where the kid is. We've seen huge gains from this in India and we're starting to see adoption of this in in Africa as well. And that can have a very big impact at, you know, quite low cost. Another thing is, I think it's called structured pedagogy, which is just providing very detailed lesson plans for teachers, and that can be done in a variety of ways. And, you know, we're seeing big effects from that as well. So, you know, the good news here, as in a lot of development is, you know, we, if we try a variety of things and if we think about it, using, using theory and using the tools of economics and tools of other disciplines, if we can really make progress. Does it work just to pay the students for better grades. So, I've, I'm, you know, my understanding, I'm not an expert on that on that type of work, let me give you two contrasting results. So I think some of Roland Friar's work on that if I remember right was in the US wasn't so encouraging. But I'll tell you one thing that I think I am reasonably excited about. I've done some work with Rebecca Thornton and Willa Friedman and Ted McGill on, on scholarships on where sort of a lot of developing countries you have to pay, have to pay something to go at least go to secondary school, not primary school, even primary school it's officially free, but they're often fees. So there was a program in Kenya that said if kids did well and up at sixth grade, their fees would be covered for seventh and eighth grade. And these were in poor schools so you know this was going to poor kids. So what we saw was obviously there's a direct benefit of allowing kids, more kids going to higher grades of school. But we also saw that kids were putting in more effort in response to this, and not just the kids at the top of the distribution but throughout the distribution. It also looked like teachers were putting in more effort as well because they, they were motivated to try and help their students do better. So I think having some sort of merit scholarship program is something that, you know, I don't want, there are some flaws in our paper, I don't want to claim we should, I don't know whether we should scale up, maybe we should, because it doesn't seem, saying that kids who do well in school can go on to the next level of education doesn't seem that controversial. So maybe we should scale it up. I don't want to claim the evidence is totally definitive on it. We could test this more, learn about how to make it work, but I think this is the type of program that also deserves, you know, should be part of a system, probably should be part of a system and certainly deserves more testing. One strand of your work concerns peer effects. There's your paper on the hodge and its influence, right college roommates your paper on alcohol use. So if peer effects are so strong in the United States, again say in high school, how should we restructure how we treat honors classes, should we have more of them fewer of them. What's the right way to think about what you might call intellectual segregation in this country. Yeah, it's a great question, great question. And I don't want to claim that I've, I don't know the answer to the question but I think we should try and find out let me just. I believe there have been some results. I'm not not super familiar with us with the papers but I believe there's been very positive results from peer mentoring programs. I believe that some results in Italy, you know, very recently from this. So if you can create incentives for students to help each other out. That can be very positive. Now that does require sort of changing. This does not seem to be a problem in most developing country education systems I know but certainly, you know, us can have can have a system where it's not cool to do well in school, and can have a culture like that or not cool to do too well in school. And I don't care about that in India, but, you know, thinking about how can we set up a system of incentives and rewards to try to address that is a really interesting question. So I have to choose to sort of despite saying this isn't even a problem in, in Kenya. I have students, Ronak Jane and Brandon 10, who have some, I think, very excited, very preliminary so I don't want to, you know, I don't want to more work needs to be done on this but they have some very exciting results for Kenya, suggesting that you were talking about this pain kids to do well as individuals. So they've been trying something level the classroom as a whole, where they reward the classroom as a whole for doing well. And you can imagine that can create possibly created culture in the class as a whole, where you want each other to do well. And their initial results on this are actually extremely promising. Here's a few questions from outside of economics. Oogali is arguably the Kenyan national dish. Does it taste good. No, not to my taste. There are Kenyan dishes that do. There's a mixture of corn and beans that I like. And then there's, you know, I have had Oogali that was delicious in fancy restaurants in Nairobi that Isaac and BT took me to. But in general it's a little bland. Why doesn't Harvard Square have food as good as that you can get in Kenya? A lot of purchasing power, obviously high level of education, but it's terrible. Yeah, I I think there's something about, you know, I don't know if this is the case but I think transfer populations that turn over a lot maybe maybe associated with worse quality food, but I'm not sure. Out of Africa the movie. Do you like it is it any good. I wish so long ago since I saw it. I, I don't remember it. I, I, yeah, I don't I don't remember the movie at all. What's the ideal Kenya trip say I come to you I say Michael I'm going to Kenya, I have two weeks, obviously safari but what else should I do. Great thing about, yes, I'm very happy to be a tourism ambassador for Kenya. It's, it's, it's really a great country to visit. So there's, if you're into mountains, there's Mount Kenya. There's the coast. There's there is, but I think for, you know, I think you're totally right that obviously the top thing is for for Americans would be a safari because you can get mountains and you can get beaches other places. The coast of Kenya. It's not just the beaches. It's the, the sort of the culture that's a very interesting blend of cultures there. But, but I think game parks have to be, you know, very high on the agenda for people and Nairobi right now is a cosmopolitan exciting and city it's a happening place in a way that it. You know, I didn't feel that way about it in the, you know, in the late 80s or early 90s but now it's a, it's a very exciting place to be and and you know if you talk about where you can get good food. You know, you can get good food of a lot of different types in Nairobi so I wouldn't. Not Harvard Square. What's interesting about reading James Joyce. Yeah, it was just just rereading Dubliners recently. The. It's also about development economics. It is, it is, it is it's about it's about a place that was a colony and trying to to get out of that. And with, you know, people leaving living very constricted lives and, you know, I guess, look, I don't want to claim this is the most interesting thing about about reading that but it's a, you know, I was talking about Nairobi being a happening in place well you know I was in Ireland recently that's a happening place as well. It's not the, it's not the Dublin of of Dubliners anymore. And, you know, I, I guess, I would say this is, if I think about talking about convergence recently, you know, the world is, you know, things are really improving in a lot of the world, and it's, it can be very easy to forget that in a time of COVID a time of all the other problems that we're having right now, but, but people are people are freer and people are leading leading more exciting more open less constrained lives. That's your favorite novel. You know, I don't know this a novel, but maybe the Odyssey. Why the Odyssey. There are so many, so many rich are typical stories in there. And, you know, the, and, you know, I, it's hard for me to just say why I just, I just, you know, I've gone back to it I, I really enjoy it. It's a comparative development tale, right? Autarchy doesn't work. War is bad for economic growth. Don't take too many drugs. Good point. Good point. I haven't thought about that way, but yes. I mean, literature as a whole arguably makes one believe more in what would sometimes be called a cultural backwardness theory of economic under development. There's something in Dubliners about the perspectives people have on situations they're remarkably local, and they're keen in their perceptive and they're highly emotional. The arc at which people make comparisons, typically is a very small circle in Ireland when it joins the EU and even before then is changing that I think. Yeah, yeah. It's a great. Yeah, it's a, it's a great point. I, you know, if you think about so I choose an undergraduate. I didn't study economics. I did a program called social studies. We read Weber, among other people, you know, Weber talked about the role of culture in influencing economics. There is a lot of modern development economics was a reaction to that, and perhaps a warranted reaction because I think a lot of Weber himself obviously very maybe wrong but you know very sophisticated not simplistic. But there is a lot of simplistic analysis of, you know, Confucian societies will never grow Hindu societies will have a Hindu rate of growth is inherently low. And people were making clearly, you know, statements that were just wrong turned out to be wrong. And, but even before that, economists said, look, we don't need to, you know, the founding of development, economics was added that people are poor but rational, and we can use the same tools of economics to analyze people and in low income countries as high income countries and, and that was, I think there's a lot to be said for that. But I think what we've realized with behavioral economics is that people in high income countries are not completely rational either. And there are certain patterns in the way that they're not rational. Others things can play out differently in low income countries and high income countries, just due to different institutions. But what you're suggesting is something much stronger than that that there can be certain ways of thinking and embodied in culture. And, you know, I think that I think those are interesting ideas and people like, you know, Nathan Nunn, or Alberto Alicina are doing very exciting work on the on culture and economics. I, I think we need to learn. We have a lot more to learn about how far we can take that and but I think it's a, I think there's extending work going on in that area. We have to be careful, but and, and avoid some of the simplistic approaches of the past and I also think just come back to this point about convergence. One of the things that a lot of the work on economic history and on culture in particular has emphasized is just how long lasting things are whether whether societies use the plow. Thousands of years ago affects affects society today that's the claim. And I'm very open to those ideas, but what we've also seen is low income countries really catching up and remarkably quickly to higher income countries. And that suggests that, you know, we shouldn't take looking into talking about cultures indicating that there's no possibility for development or for change. There's, there's clearly that possibility we've seen it country after country. In your own intellectual development. What did you learn from your mom. You know, my mother was my mother wrote about literature on the Holocaust. And, you know, one thing that one thing that I think that brings out is that when there are issues that we can do something about, you know, we need to do something about them. We shouldn't, we shouldn't wait and, and obviously there were people who do things that very great cost to themselves in that situation and they're doing, you know, right now in coven or doing things are risking their lives to help people get through the coven crisis. I work on international development. You know, that's at least in part because I feel like there's, you know, we have a, this is something that it actually fairly low cost to ourselves. We can help address these problems, you know, the case of deworming. And this is something that costs 50 cents a year to address. And, you know, I think this is, I guess, those values. At this point in your career, why move to University of Chicago as you're doing this fall, basically, as we speak. Right. No, I'm speaking to you from Chicago. You went to your office. I'm in my office. Yeah, I was allowed. Yeah, no, no, we can we have to go through certain precautions, but but I'm speaking to you from my new office, the University of Chicago, you know, Chicago obviously the wonderful tradition and economics. One of the things that I was that I was very excited about was, you know, talk to President Zimmer here of the University President University of Chicago, and I was excited about you talked about experiences a founder and I and I've talked about technological change and the need for technological changes for changes in technology by which I don't mean gadgets by don't just mean gadgets I mean institutional change innovation and policies as well. And I think what we've seen is there's a lot of potential to generate that and you know, University of Chicago made a big commitment to development economics in general, and I hope we'll be hiring more people over time and the slots will be there for that, and to create a development innovation lab, which I think we'll use the tools of economics to create practical innovations that can improve people's lives. And, you know, to work closely with partners to develop and refine and iterate on those innovations, so that they can be scaled up. And I think what we've seen what I've been seeing in my own research was true with a lot of research of Jay Powell, Poverty Action Lab at MIT, and what I've seen in the USA's Development Innovation Ventures is, you know, when you're investing that type of technology, it's not that any time you're investing in innovation, most innovations don't don't succeed, they don't take off. But you get a few, if you're a venture capitalist and you invest in a Google or Facebook, it's fine if a lot of your other investments don't work. And I think the same thing in investing in development innovation. And when we did an analysis of the rate of return, we tried to get a lower bound on the rate of return for the early investments that development innovation ventures at USA made, and we're getting a five to one lower bound and a super conservative lower bound. I think we'll have a much higher rate in our next iteration of this. And, you know, that's looking just to be clear what a lower bound this is. You know, we invested in, we had 41 innovations in our early portfolio. We looked at the, we couldn't quantify the benefits for all of them, but we found four of them that reached, you know, of the nine or 10 that reached over a million users, we can quantify the benefits for four. If you take the benefits of those four and set them against the cost of our, of our, of our investments and all 41, the ratio is five to one. And so I think, and that's already, and I think that that will grow over time. So, I just think there's a huge, huge reward to invest in innovation. There's also a scientific reward. And University of Chicago is making a big commitment in that area. And, and that's what big part of why I came here. So you were tempted by the ability to found a new institution. Yeah, in part, yes, that was a that was a huge motivation for me. And I'm very excited about it. And what is it you think that you as someone who studied organizations know about managing institutions that maybe just regular managers would not know. So, you know, there's, I think that the, that if you're working in modern development economics, particularly if you're using the experimental approach. You know, some of the things that economists, the stereotype of economists is not paying attention to your force to pay attention to. So, let me give you a few examples. You know, one of the part of the reason why I originally got into doing experiments was to isolate causal impact disentangle. You know, is it really is it a particular program that's causing something or particular intervention or something else. And I think experiments are very good for that. But when you're doing experiments, you're typically working on a, you've got, you're typically working on a concrete problem because that's what organizations, they're doing the experiment because they want to solve that problem. And you have to get to know the people who work in that institution. You also have to get to know the ultimate customer. You know, one of the, one of the things that business books will tell you is know your, know your customer. And that means, you know, yes, you want to learn the statistics on the, on the customers, but you also want to talk to the customers. And so development economists will go typically go to it's an education program they're studying. They'll talk to kids, they'll talk to the teachers, they'll talk to the school principals. You get in the habit of doing that and that's very useful for thinking about for I think for innovation more broadly. Another thing is, as a, as a researcher, you, and this would be true for any type of researcher, but you know you're presenting your research and seminars and you're getting feedback on it you're getting criticism on that and you're going back and revising things. I think that's actually very useful for management. One of the problems that managers can have is, you know, you can convince yourself and I think this might be particularly true in development. You can convince yourself that what you're doing is the right way to do things, the only way to do things. And it's very useful to, and you may not get feedback otherwise because in, in develop in research, you do, and I think that's a great thing about, about academics. I think one thing about the development, modern development economics and experimental economics is that it's iterative. So you try one thing, then either the same researchers or other researchers try to improve on it again, and it's a constant cycle. Yeah, that's again something that your management books will tell you is very important. So I think there are a bunch, you also get used to working with people you have to raise money, you have to work with, with, with NGOs or governments or firms to talk to them about randomizing. So there's a whole bunch of skills that, that actually are applicable beyond just, you know, writing a paper. So I, I, you know, if I think about, think about, you know, give directly. That's an organization that, you know, it's a very successful NGO, but founded by development economists. Paul, you know, Paul Nehouse and, but there are many, many others who are doing things like this and I think it's, I think, again, in many other fields, this wouldn't seem like a strange combination of being a researcher and also being a founder. Final question, when it comes to advanced market commitment, what is the very next thing you will be doing? So I'm doing a lot of work on the problem of COVID. And, and some of this work is with people who are involved in the pneumococcus advanced market commitment, Chris Snyder, Jean Lee, others, but we're also working with some, some other industrial organization that's, for example, Susan Athe and, and, and when we think about this problem, I think the problem of getting a COVID vaccine is different in some important ways. And that's something, again, something that economics and being close to research and theory will tell you. So, so I think it's just to be clear, I'm not, you know, sometimes people have a stereotype of experimentation as opposed to theory, I think they're strongest when they're linked. So, well, we've, well, we've said, we've, there's a number of different things we've suggested, but one of them is that, and is, and this is, you know, very much with your colleague Alex Tabar is a very simple one is the world of companies losing $500 billion every month due to COVID. And that means that it's worth investing a lot in trying to develop a COVID vaccine, even though there's a pretty high risk of failure, and it's also worth getting lots of shots on goal. Now, for a variety of reasons, which I could go into the private returns from building out a very large factory for vaccine before we know whether the vaccine is going to work before testing is complete, or much less than the social returns. I think in this particular case, you probably want to, it probably makes sense for governments to offer to cover, you probably want a mix of push incentives and pull incentives, some reward for success, but also just some upfront financing for building those factories ahead of time. And that's, you know, what we've been arguing for, and a bunch of countries are doing things like that. So the US operation warp speed, but many other countries are putting in orders for vaccine, even ahead of the time the vaccine has been proven to work. So obviously risk involved, but it's very much a risk worth taking. There are other, there are other lessons. They're coming out of the industrial organization of this, like it's very important to invest in supply chain capacity, not just in the, in the production of the ultimate vaccine. We might want to consider ways to get some of the early information from the trials out so we can use it even before the trial is finished, we can use it to invest optimally in manufacturing. So a lot of insights from studying the economics of this, and that's obviously a critically important problem and policy makers seem, again, you know, you can say it's a glass half full or half empty. I would say the glasses is at least partially full. I'd like policy makers to be investing more in this, but they are starting to invest and they are starting to do these contracts. Well in advance and availability with the vaccine. Michael Kramer, thank you very much. Thank you.