Bryan Caplan  

Diseases of Poverty: Neglecting the Obvious

Financial Literacy, Human Capi... You know you're in trouble whe...
Before blogging Ebola, I've been reading up on the broader category of "diseases of poverty."  The low-point of the Wikipedia entry:
There are a number of proposals for reducing the diseases of poverty and eliminating health disparities within and between countries. The World Health Organization proposes closing the gaps by acting on social determinants. Their first recommendation is to improve daily living conditions. This area involves improving the lives of women and girls so that their children are born in healthy environments and placing an emphasis on early childhood health. Their second recommendation is to tackle the inequitable distribution of money, power and resources. This would involve building stronger public sectors and changing the way in which society is organized. Their third recommendation is to measure and understand the problem and assess the impact of action. This would involve training policy makers and healthcare practitioners to recognize problems and form policy solutions.
On etymology alone, you'd think that economic growth - i.e., producing more wealth per person - would top the list of cures for "diseases of poverty."  But it isn't even mentioned.  Instead, we get to choose between:

1. Targeted redistribution to women and children.

2. General redistribution/bigger public sectors.

3. Better policy evaluation and training of policymakers and health workers.

It's almost like the last two centuries never happened.  Quick recap: During the last two hundred years, living standards exploded even though the distribution of income remained quite unequal.  How is such a thing possible?  Because total production per person drastically increased.  During this era, no country escaped dire poverty via redistribution, but many escaped dire poverty via increased production.  And while the effect of moderate redistributive policies on growth is unclear, there is no doubt that populist and socialist movements determined to "tackle the inequitable distribution of money, power and resources" and "change the way that society is organized" sharply retard growth.  As I told the Gates Foundation when they asked for my input:
Anyone serious about reducing world poverty must come to grips with a single key fact: Redistribution from rich to poor has not and cannot solve more than a tiny fraction of the problem.  Even if you could perfectly equalize income in Third World nations with zero effect on production, the citizens of Third World countries would remain mired in poverty.  Take Bangladesh.  With a GDP of $256B and a population of 164M, equalization would at best give each citizen an income of $1561 per year - about $4 a day.  Countries do not overcome poverty by sharing production more equally.  They overcome poverty by increasing production - what economists call "economic growth."
Diseases of poverty are sadly real, but happily curable.  Avoiding populism and socialism is a good first start.  Economic freedom, especially for reviled multinational corporations, is also vital.  And if First World countries want to lend a hand, nothing cures global poverty faster than open borders.

COMMENTS (27 to date)
Abdullah Khalid writes:

Did you mean economic freedom FOR multinationals or FROM multinationals?

Pajser writes:

OK, lets see.

Angola GDP/capita =5600 dollars. (nominal)
Cuba GDP/capita = 6000 dollars. (nominal)
South Africa GDP/capita = 6600 dollars (nominal).

Angola child mortality = 104.3
Cuba child mortality = 4.76
South Africa Child mortality = 42.15

With as much wealth as South Africa or Angola already have - if they reshape their societies according to Cuban model - they can save the lives of something like 88-95% of children.

Alternatively, they can take American route. In that case, after they increase their wealth nine times - they will still have slightly worse results (Child mortality 2013 CIA Factbook).

Daniel Kuehn writes:

I find it interesting that where I read "improve the lives of" you read "targeted redistribution". One of us seems to be confused here.

Charley Hooper writes:


Places like Cuba have (seemingly) low child mortality rates because they use a different definition of child mortality. That's the generous interpretation. Or you could say they cook the books.

In Cuba, which boasts a very low infant-mortality rate, infants are only registered when they are several months old, thereby leaving out of the official statistics all infant deaths that take place within the first several months of life.

From: "The Lesson of Soviet Medicine," by Yuri N. Maltsev

Pajser writes:

Charley Hooper, official Cuban number is actually slightly lower (4.2), the number above is CIA estimation, and similar numbers (between 4 and 6) are given by UN Population Division, UNICEF, WHO, World Bank. CIA has little incentive to lie; they say Cuba has the lowest child mortality in both Americas. So, the number could be close to the truth. Which shows that distribution of relatively little wealth makes large difference in saving lives from diseases.

Cuban health system is very positively described in scientific journals and official WHO bulletin. Recently, Cuba sent the largest medical team to Sierra Leone - 165 people.

ThomasH writes:

No doubt increasing growth in income would reduce poverty and the diseases of poverty and make possible many other good things. But the poor Wikipedian probably had in mind that most people are already doing as much as the know how to increase incomes, so it would seem rather otiose to "recommend" increased income.

Now it would make sense to have some sense of the cost in lower consumption on other things or lower growth of the three recommendations relative to the expected decreases in poverty that would result. It is this failing that makes the recommendations nearly empty of content.

Anthony writes:

@Pajser: The organizations you list are not sending researchers to every country for some parallel system of infant registration. They are using each country's vital records and applying somewhat different methodologies. There are techniques to control for missing/bad data, but there are limits to those techniques. That those organizations are not lying does not mean that the numbers they're producing are correct.

Daublin writes:

@Pajser, I think you need to look beneath the numbers. Cuba has every reason to lie about its own internal statistics, much like the Soviet Union under communism.

In both cases, qualitative reviews of the state of life were pretty bad. In both cases, a number of prominent economists embarrassed themselves by declaring that those countries' economic systems were working fairly well.

For the Soviet Union, everyone's story changed once the country collapsed and more of their internal records came to light. I expect the same will happen with Cuba. If the numbers don't match what people are seeing with their own eyes, then something is probably wrong with the numbers.

ZC writes:

Seems to be everyone is overlooking an alternative means to increase income per capita in these impoverished nations...namely changing the denominator.

Poor people having babies they can't afford to provide for is a problem throughout the world, in both rich and poor countries. When you can't feed yourself, popping out a bunch of kids probably isn't a great plan. Sure, I understand the evolutionary concepts of poor survival to adulthood necessitating more offspring per woman, etc. But, contraception/family planning remains the most straightforward and individually possible way to achieve the above mentioned increase in per capita income. Increasing economic productivity is a multifactorial issue subject to innumerable variables (rooting out corruption which is rampant in 3rd world/developing countries [and everywhere else], resource poor areas will remain so, open borders imposes all sorts of externalities on others, etc)...but not getting knocked up when you can hardly feed yourself, that can be accomplished at an individual level with a little prudence, foresight, and self-control.

Evan writes:

Prof. Caplan,

I'm surprised you use the phrase "lend a hand" when referring to First World countries opening their borders. That phrase, to me, implies sacrifice on the part of the "lender". Of course, residents of First World countries, on average, would be making no sacrifice by opening their borders; in fact, they'd be improving their own welfare alongside the welfare of those currently confined to the Third World.

I only point this out because I believe it's important that we shift away from the subtle biases in our everyday language that characterize trade (in both goods and labor) as a zero-sum game.

Charley Hooper writes:


Without looking into the numbers myself, let's assume you've got them right. But there's a lot more going on here. One country could try to deliver all babies, no matter how unlikely they are to live, while another country aborts problematic fetuses.

Plus, your point isn't proven by the examples you provide. Perhaps one country that has redistributed some wealth has a low infant mortality rate. So? Does that relationship hold up across all countries and what's the logic behind it? Why would infant mortality have anything to do with relative wealth?

I can see infant mortality being a function of absolute wealth. But relative wealth? How would a baby know there's a rich person across town? :-)

Mark Bahner writes:
Cuban health system is very positively described in scientific journals and official WHO bulletin. Recently, Cuba sent the largest medical team to Sierra Leone - 165 people.

It definitely helps to be able to operate an island prison.

Charley Hooper writes:

Let's set up a hypothetical scenario to see how unlikely it is that the distribution of wealth affects child mortality.

Cuban group 1 ("poor"), wealth = $1,000, child mortality = 2%
Cuban group 2 ("rich"), wealth = $2,000, child mortality = 1%

American group 1 ("poor"), wealth = $2,000, child mortality = 4%
American group 2 ("rich"), wealth = $10,000, child mortality = 2%

In this scenario, the Cuban mortality rate is half that of the American rate. But why? How could this possibly be a function of the distribution of wealth? Are the American poor so stressed at having 1/5 as much money as their neighbors that their infant mortality rate is twice as high as it is for the poor in Cuba, even though they are twice as wealthy?

And the richer Americans have the same infant mortality rate as the poorer Cubans, even through they are 10 times as wealthy?

I don't buy it.

Alex K writes:

Instead of cherry picking examples, look at a broader set of data. The World Bank provides programmatic access to several relevant stats. Check out tax revenue/GDP versus child mortality. There's no discernible relationship in a plot of the two. Regressing the second against the first shows a very weak negative relationship. Good luck getting an R^2 above 0.07 on the fit. In short, no evidence that redistribution/confiscation saves lives.

dullgeek writes:

This is kinda nitpicky. Apologies in advance. But the lowpoint isn't of the wikipedia article. The low point is of the World Health Organizations proposals.

If the wikipedia article got those recommendations incorrect or incomplete, that would be a lowpoint for the article. But to the extent that wikipedia is correctly reporting the WHO's recommendations, it's hard to blame wikipedia for those recommendations.

Theodore Lopez writes:

I can offer a second-hand account of the wonders of Cuban medecine. About 10 years ago my mother took a trip to her native Cuba, specifically to the old Oriente Province of Eastern Cuba, admittedly not the most advanced part of the country. My mother is a Registered Nurse and the local officials decided she should have a tour of the regional clinic. My mother reported that the clinic was unclean, and fetid. The toilets didn't flush, the beds had no sheets, and everything was in a state of dis-repair. There were huge jars out on a table filled with anti-psychotic medication long-since discontinued in US production, but to which the Cubans freely helped themselves to, litterally, like candy. Apparently it was used as an anti-anxiety treatment. Actually, according to my mother the Cubans were more or less addicted to drugs in a n eerie paralell of A Brave New World. The pride and joy of the center was a sadly antiquated old EKG machine that was state of the art in the 1970s. My mother found the entire experience utterly pathetic but all she could do is grin and remark how excellent it all was, secretly hoping she wouldn't get ill while she was in the country. Luckily she did not, atleast on that occasion, though on another trip to Cuba she did pick up a case oof Scabbies which apparently is rampant there and passed it off to the rest of us. I spent two weeks smearing myself with cream and cursing the Wonderful Cuban Public Health System. True this is all anecdotal, but perhaps we may fuind it illustrative. If I had my birth to do over again and could choose between Florida (where I was born) and Cuba I daresay I'd pick Florida.

Floccina writes:

Pajser's comment on Cuba would be amazing and worthy of research if true.
Here are some pictures of Havana Cuba. If Pajser is correct it would seem that it would be very cheap to reduce infant mortality in the poor countries.
What would be the mechanism by which Cuba would have so much lower a infant mortality rate than other poor countries?

Ken from Ohio writes:

Is it possible to increase wealth creation without reforming political institutions?

ThomasH writes:

I hope the people at the Gates foundation listened politely as they tried not to roll their eyes as they thought, "Does this guy really think we don't know this or is he just rehearsing for a role in some Libertarian Passion Play?"

Pajser writes:

Charley Hooper: I think it proves that distribution matters. Probable causes for better reduction of diseases in Cuba are better public health system, more egalitarian income, better infrastructure. All three are some forms of redistribution.

Explanation for low Cuban child mortality is not in personal income, but in primary medical care; Cubans have lot physicians (3 x more than USA per capita) working in many small, densely distributed communal facilities; one physician and one nurse per 20-40 families. They reach many people and reach them frequently and it is beneficial for variety of diseases; beside very low child mortality, Cuba was the first country to eliminate polio and measles and it is the best in blood pressure control. Cuban equipment and hospitals are not comparable with American. Of course. But we talk about country with GDP/capita level of Angola.

Pajser writes:

Alex K.: "Instead of cherry picking examples, look at a broader set of data. "

Yes if we are interested in random distribution system vs. no distribution. But we are (or should be) interested in best possible distribution system vs. no distribution.

pylon shadow writes:

Sounds like you want to grow money at the problem.

Charley Hooper writes:


Remember, we need to separate absolute wealth effects from relative wealth effects. If I care about absolute wealth, I'll make a statement like, "I love my iPhone 5." If I care about relative wealth, I'll make a statement like, "Ugh. My neighbors have an iPhone 6."

I can see the absolute wealth aspects of your three probable causes. I can see the relative wealth aspects in your first two. But remember, these relative wealth aspects must be so strong they determine whether babies live or die.

I go back to my original question. Why would my baby die if you, being ten times as wealthy, live across town? What's the causal link between your great wealth and my baby dying?

And if you say that I wouldn't be as poor if you "gave" me some money, you need to explain why that isn't just an effect of absolute wealth. You need to explain why my baby's health is positively affected by my wealth and negatively affected by your wealth.

Alex K writes:

@pajser the countries in the dataset didn't randomly select distribution policies. They were deliberately chosen because they were perceived to provide for the public good (admittedly an idealized view that ignores dictatorships, corrupt states, etc, but one that liberals should be sympathetic to).

I claim that evidence *from these real world states* shows that distribution policy doesn't matter at all for child mortality, despite social planners' best intentions. For every success you point to with a compelling story behind it, I can find you a failure that showed extraordinary promise ex-ante. There may be lots of prior reasons to think a distribution scheme will fix health issues. Evidently, these reasons are broadly wrong--very few schemes actually succeed. If there's no correlation, there's no causal story to tell.

At what point do you concede that it's hard to find a good way to chop up the pot? At what point do you concede we can achieve a lot by growing wealth, even if it means some get to have a little more than others?

charley Hooper writes:

@Abdullah Khalid,

Freedom FROM multinational corporations is straightforward. Just don't buy their products and services.

Or are you referring to crony capitalism? In that case, we need to alter the way the government works.

Pajser writes:

Charley Hooper, if price of the medical care is the same, then family with income of $1000 will have access to same services, no matter about wealth of other families. But: at given level of wealth - say $6000 per capita - poorest citizens have better access to medical care in more egalitarian country. It must be that we agree about that.

Alex K. Maybe for every success of the redistribution system you can show the failure, but it is not enough to conclude that redistribution doesn't work. In year 1904. world had hundreds of failed airplane building attempts and only one successful. Did this mean that failure of airplane building attempt is more probable than success? No - it meant that airplanes can fly, and that everyone who wants one needs only to copy successful attempt and ignore others.

I readily concede that we can achieve a lot by growing wealth, even it means some get to have more than others.

steve writes:

Inequality is a bit of a red herring. Economic growth as an answer, while true is trite. If they knew how to be wealthier, they would already have done it. Simple remedies like reliable clean water and education about hygiene would go a long way to improve things. Redistribution to achieve that would have a small effect on the wealthy, but big results for the poor.

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