Orazem earns Nobel Laureates approval for his education plan at Copenhagen Consensus

Orazem

Peter Orazem, a University Professor of economics at Iowa State, earned approval from five top economists, including four Nobel laureates, for his recommendations on how to improve education in the developing world at the global Copenhagen Consensus 2012 last month. Photo by Bob Elbert, ISU News Service (Print quality photo)

AMES, Iowa -- Peter Orazem doesn't claim to have the answers to all the world's problems. But when it comes to strategies on how best to use limited resources to improve education in developing nations, he feels pretty confident that he has some of the right answers -- and five top economists, including four Nobel laureates, seem to agree.

That was the result when Orazem, a University Professor of economics at Iowa State University, was invited to present research-based strategies to improve education in the developing world to the panel of economists at the global Copenhagen Consensus 2012 last month. The event brought together leading academic minds to analyze the costs and benefits of different approaches to tackling the world's biggest problems in 12 areas, including education.

After spending some nine months scouring research on education in developing nations, Orazem presented his recommendations to the five-person panel of economists, which included Nobel laureates Finn Kydland, Thomas Schnelling, Robert Mundell and Vernon Smith, as well as Nancy Stokey, a distinguished University of Chicago economics professor. The panel was asked to take the best recommendations from all presenters and use them to answer the question, "If you had $75 billion to spend over the next four years and your goal was to advance human welfare, especially in the developing world, how could you get the most value for your money?"

Four of the top 15

Given the budget constraints, they found 16 strategies worthy of investment out of the 30 proposed -- four of them being Orazem's, including their top choice. They included:

1. Bundled interventions to reduce under nutrition in preschoolers (to fight hunger and improve education)

4. Deworming of schoolchildren, to improve educational health outcomes

13. Conditional cash transfers for school attendance

15. Information campaign on the benefits from schooling

"One of my proposals was ranked number one, although it's not exclusively mine. There was also a separate nutrition paper and both of us said we would have to focus on micronutrients first," said Orazem, who has now participated in all three Copenhagen Consensus events, which take place every four years.

Orazem and John Hoddinott and colleagues of the International Food Policy Research Institute recommended an investment of $3 billion annually to purchase a bundle of interventions, including micronutrient provision, complementary foods, treatment for worms and diarrheal diseases, and behavior-change programs. Those interventions could reduce chronic malnutrition by 36 percent in developing countries.

Provision of nutrient supplements and anti-parasitic medicines to young children (ages 3-6) is very inexpensive, according to Orazem. In Kenya, for instance, the cost of deworming a child can be as low as $3.50, with benefits 20 to 50 times higher.

"Specifically in my area of education, why do I care about something that's going to improve the quality of secondary education if the kids are stunted physically and mentally before they even start school?" Orazem said. "Malnutrition before age five permanently harms brain development and earnings for a lifetime. No other education strategy can generate those benefits at such a low cost. That's why these nutrients are so important."

His second strategy is simply to provide accurate information to kids and parents about the return on investment in education. In Madagascar, providing children and their parents with accurate information on the value of schooling significantly increased both time in school and performance on standardized tests at a cost of just $2.30 per child.

Conditional cash transfers work

Orazem says he found the most consistent evidence of recent success from making payments to underprivileged parents conditional on their children attending school. These "conditional cash transfers" have consistently increased child attendance, even when the transfer is modest. He calculates that a dollar spent on such programs, on average, produces benefits of about $9.

And finding those benefits is exactly what the Copenhagen Consensus is designed to do.

"The key to this exercise is that it identifies strategies that promise the greatest benefit for the cost, and that is particularly important for international funding agencies trying to use their dollars as effectively as possible," Orazem said.

Bjørn Lomborg -- a Danish author, academic and environmental writer who founded the Copenhagen Consensus -- wrote opinion pieces published in Slate.com summarizing the recommendations in each area, including Orazem's report on education. All the final papers in the 12 topic areas will also be published in a book by Cambridge University Press.

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