Esther Duflo

Theories of outsourcing often presume that private firms are more efficient producers of goods and services, but that contracting frictions mean that firms do not internalize the government's objective function. But perhaps, for some tasks, the government can actually be more productively efficient? We study this question through an experiment in Chennai, India, where the government randomly selected neighborhoods to have property tax assessments determined by private firms contracted by the government, rather than government tax inspectors. We show that inspections by government tax inspectors yielded almost double the increase in tax revenue as those done by private firms. They were also more accurate, as judged by comparing new assessments to independent assessments done by third-party surveyors we hired. Difficulties contracting with the government discouraged many competent firms from bidding. Perhaps as a result, government inspectors had higher skills and put in more effort than the workers at the private firms. Importantly, the government inspectors also had more authority to enter properties, which may be hard to transfer even to higher quality firms. The results suggest that the limits to government outsourcing may go beyond multitasking issues.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Efforts to move care out of hospitals and into the community face a hard constraint: while most medications can be delivered anywhere, diagnosis is still mostly trapped inside the formal health system—clinics, hospitals, and the people and machines inside them. This is especially binding in low- and middle-income countries due to distance, cost, and limited health system capacity. Low-cost data collection devices (e.g., handheld electrocardiograms (ECGs), retinal cameras) are promising, but do not solve the bottleneck: their outputs still require expert interpretation. Artificial intelligence (AI) could turn these raw signals into actionable outputs at scale, but most medical AI is trained in high-income settings and deteriorates in different populations and settings. We assemble a new dataset in rural Tamil Nadu, India that links low-cost device signals to hospital-grade reference testing. We use it to build a proof-of-concept screening tool: an algorithm that predicts the result of a hospital-based reference-standard test (regional wall motion abnormality on echocardiography), using only data from a handheld ECG device (cost: $60). This would allow targeting of secondary prevention medications—high-dose statins, antiplatelet agents, and beta blockers—proven to be cost-effective in both high- and low-resource settings. We evaluate predictive performance and cost-effectiveness of such screening, benchmarking against common clinical risk scores (including the American Heart Association 10-year risk score). In a held-out test set, our model identifies subgroups with rates high enough to make screening very cost-effective: the top 2.5% have a 9.3% rate of evidence consistent with prior heart attack—about six times the base rate—delivering benefits at US$1,999 per life-year saved. The model also flags high-yield patients who would be missed by standard clinical scores, underscoring the limits of transporting Western-derived risk tools to low- and middle-income settings. To enable extensions to other conditions in the dataset, we make all data freely available for research.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Many children from low-income backgrounds worldwide fail to master school mathematics¹; however, some children extensively use mental arithmetic outside school^2,3. Here we surveyed children in Kolkata and Delhi, India, who work in markets (n = 1,436), to investigate whether maths skills acquired in real-world settings transfer to the classroom and vice versa. Nearly all these children used complex arithmetic calculations effectively at work. They were also proficient in solving hypothetical market maths problems and verbal maths problems that were anchored to concrete contexts. However, they were unable to solve arithmetic problems of equal or lesser complexity when presented in the abstract format typically used in school. The children’s performance in market maths problems was not explained by memorization, access to help, reduced stress with more familiar formats or high incentives for correct performance. By contrast, children with no market-selling experience (n = 471), enrolled in nearby schools, showed the opposite pattern. These children performed more accurately on simple abstract problems, but only 1% could correctly answer an applied market maths problem that more than one third of working children solved (β = 0.35, s.e.m. = 0.03; 95% confidence interval = 0.30–0.40, P < 0.001). School children used highly inefficient written calculations, could not combine different operations and arrived at answers too slowly to be useful in real-life or in higher maths. These findings highlight the importance of educational curricula that bridge the gap between intuitive and formal maths.

Mounting costs of anthropogenic climate change reveal that adaptation will be essential to human well-being in coming decades. At the same time, the literature on the economics of adaptation offers relatively little guidance for emerging policy. In this chapter, we review the existing literature, focusing on how it can better inform adaptation policy design and implementation. A simple conceptual model of adaptation decision-making describes two core adaptation channels that we link to two streams of adaptation literature, which have emerged largely in parallel. We outline how insights from these literatures can be used for adaptation policy evaluation, highlight key limitations of and opportunities for public intervention in private adaptation markets, and provide guidance for future work.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

We provide experimental evidence on the intergenerational impacts of secondary education subsidies in a low-income context, leveraging a randomized controlled trial and 15-year longitudinal follow-up. For young women, receiving a scholarship for secondary school delays childbearing and marriage, and reduces unwanted pregnancies. Female scholarship recipients are more likely to marry a partner with tertiary education and their children have better early childhood development outcomes. In particular, we document a 45% reduction in under-three mortality as well as cognitive development gains of 0.25 standard deviations of test scores once children are of school age. The primary mechanism seems to be that more-educated caregivers have the knowledge and skills to safeguard their children’s health and stimulate their cognitive development. In contrast, we find no evidence of a positive impact for the children of male scholarship recipients, who tend to marry less educated partners. Together, these results suggest a key role for maternal education in child outcomes. We also estimate the cost-benefit ratio for secondary school scholarships and find that the impact on child survival alone is sufficient to make them a highly cost-effective investment.

COVID-19 vaccines are widely available in wealthy countries, yet many remain unvaccinated. We report on two studies (United States and France) with millions of Facebook users that tested two strategies central to vaccination outreach: health professionals addressing common concerns and motivating “ambassadors” to encourage vaccination in their social networks. We can reject very small effects of any intervention on new first doses (0.16 pp, United States; 0.021 pp, France), with similar results for second doses and boosters (United States). During the Omicron wave, messaging aimed at the unvaccinated or those tasked with encouraging others did not change vaccination decisions.