Could I have some more systemic change, please, sir?

By MichaelPlant @ 2018-01-22T16:26 (+24)

In this short post I outline a very simple (new?) way of estimating the expected value of systemic changes when you are very uncertain of how much they'd cost. It seems to have the result of making systemic changes look much more viable than they otherwise would.

Suppose we want to do something about poverty, and we're torn between Give Directly, an 'atomic' intervention (prejoratively, 'sticking plaster') and international legal reform, a 'systemic' intervention. I'm not going to get tied down to any specifics of the latter, because it's only for illustration, but the sort of thing I have in mind are those mentioned by Thomas Pogge - such as resource privilege (p11), and borrowing privilege (p13) - and Leif Weinar in Blood Oil; we could also think about try to reduce subsidies to rich-world farmers, such as the EU's Common Agricultural Policy, which make it much harder for poor-world farmers to compete.

Let's say we know how cost-effective Give Directly are. Asssume Give Directly spends $730 to take one person out of poverty for a year ($2x365 days). Suppose this increases someone’s happiness by 0.5 units on a -1 to +1 happiness scale. 0= death/neutral/unconsciousness, 1 = ‘max’ happiness, where maximum is maximum average sustainable happiness, or something. So the cost per ‘happiness adjusted life year’ (HALY) is $1,460.

Now, suppose we’re wondering how cost-effective it would be to run a campaign that's trying to bring about some of the systemic changes I just mentioned. This is tricky to do, because we really don't know what comparisons to draw on (which other campaigns are similar? how similar are they to ours?). It feels like we're engaged in whimsical speculation when we create the numbers.

However, we can do things the other way around and create ceiling-cost estimate. We know how cost-effective Give Directly are, so we can ask: what's the maximum we could we expect to spend on the systemic change campaign and it still turn out to be as cost-effective?

Some numbers: suppose there are 1bn people in poverty, and if we change the international system somehow (to be specified) it increases their happiness by 0.1 units a year, i.e we're assuming this has only 1/5^th of the impact on each individual as Give Directly does. Therefore, if we pulled it off, it would do 100 million HALYs worth of good (i.e. 0.1 x 1bn). Give Directly produces 1 HALY for $1,460 (from above assumption). Therefore, if we spent anything less than $146 billion on a successful campaign/lobbying group, then it would be more cost effective to do that than give money to Give Directly directly (100m x 1,460; see maths in figure 1)

Figure 1.

What do we do with this $146bn figure we've just made up? We ask ourselves if we believe the expected cost for the systemic change to be successful would be higher or lower than that number. This seems like a much easier, back-of-the-mental envelope subjective judgement to make.

Suppose we fund this campaign and it costs $160bn before it's successful, rather than $146bn? Well, then our campaign turned out to be less cost-effective than Give Directly, but not by a lot. Suppose we reflect and conclude it would, on expectation, cost $100m for systemic change success. Then the systemic change would be 1,460 times more cost-effective than Give Directly. 

The above calculation was unrealistic in a couple of ways. First, to keep things simpler, I assumed the international legal reform would last for one year. Actually, that's unlikely. The reform would have an ongoing, annual effect. However, we might think the reform would have happened anyway, so the correct counterfactual is how many years earlier we make it occur. Let's guess it happens 10 years before it otherwise would. Second, I also assumed it would have an effect of 0.1 HALYs per person per year. This might be high, so let's assume it has a 1/10th of that impact. This scenario is represented in line three. Notice the ceiling cost is still the same, because that's how I rigged it. The upshot: even very expensive, long-term systemic changes with even a minor impact can look believably more cost-effective than atomic interventions. 

Does this mean EAs should abandon all atomic interventions in favour of systemic ones? Not so fast.

First, you'd need a plausible story of how you could spend the money to bring about the systemic change. I haven't provided more than a skeleton story here. But when we see how promising systemic changes could be, that should cause us to look a bit harder for potential systemic interventions. (For those interested, I discuss what seems to be a more plausible candidate for a systemic change campaign, drug policy reform, in this post. I use poverty here because it requires less explanation.)

Second, you might think it would cost $146bn, on expectation, for success, but that a much smaller campaign than that would be proportionally much less likely to succeeed; a token effort would be a waste. For instance, the expected value of a campaign with $1.46bn of funding could be less than 100 times that of one with $146bn, i.e. 100 times its size. The expected value of additional resources may well not be constant; there might be increasing marginal returns. So donors would need to think what the effect of their extra contribution would be. Donors might realise they could do much more good together, targeting the same project, that they do targeting different projects. This would be a reason to co-ordinate. Curiously, this seems to work the other way around for atomic interventions. It's hard to believe, if you tried to give Give Directly $146bn, they wouldn't run into diminishing marginal returns.

That said, these very simple calculations suggest EAs should think much harder about systemic interventions; at least, if you want to fund an atomic intervention, it would be an oversight to assume the systemic alternative won't be more cost-effective if you haven't even drawn up some simple cost-effectiveness guesses.

EAs already tend to use expected value reasoning, and accept that small chances of very high value events are worth taking seriously, e.g. when it comes to extinction risk. There doesn’t seem to be anything particularly suspicious about systemic changes per se. It's just a small change of affecting loads of people. Everyone should accept the abolition of slavery, which affected millions, was a substantial systemic change that had a large positive impact. It's at least hypothetically possible funding that, at the time, would have been the best thing to do.

One result of this way of thinking is that systemic changes now look more effective, in general, that atomic ones. This could well be true. Certainly, one criticism of EA is that's it's ignored systemic changes. The next step would be comparing various types of systemic changes against each other to see which look the most plausible.

(I'm grateful to Will Rooney for reading this post in advance and providing some comments)