When funding policy advocacy in the rich world, Open Philanthropy Project aims to only fund projects that at least meet the '100x bar', which means that the things they fund need to increase incomes for average Americans by $100 for every $1 spent to get as much benefit as giving $1 to GiveDirectly recipients in Africa. The reason for this is that (1) there is roughly a 100:1 ratio between the consumption of Americans to GiveDirectly cash transfer recipients, and (2) the returns of money to welfare are logarithmic. A logarithmic utility function implies that $1 for someone with 100x less consumption is worth 100x as much. Since GiveWell's top charities are 10x better than GiveDirectly, the standard set by GiveWell's top charities is a '1,000x bar'.
Since 2015, Open Phil has made roughly 300 grants totalling almost $200 million in their near-termist, human-centric focus areas of criminal justice reform, immigration policy, land use reform, macroeconomic stabilisation policy, and scientific research. In 'GiveWell’s Top Charities Are (Increasingly) Hard to Beat', Alex Berger argues that much of Open Phil's US policy work probably passes the 100x bar, but relatively little passes the 1,000x bar.
The reason that Open Phil's policy work is able to meet the 100x bar is that it is leveraged. Although trying to change planning law in California has a low chance of success, the economic payoffs are so large that the expected value of these grants is high. So, even though it is a lot harder to increase welfare in the US, because the policy work has so much leverage, the expected benefits are high enough to 100x the $ benefits.
This raises the question: if all of this true, wouldn't advocating for improved economic policy in poor countries be much better than GiveWell's top charities? If policy in the US has high expected benefits because it is leveraged, then policy in Kenya must also have high expected benefits because it is leveraged. We should expect many projects improving economic policy in Kenya to produce 100x the welfare benefits of GiveDirectly, and we should expect a handful to produce 1,000x the welfare benefits of GiveDirectly.
This is an argument for funding work to improve economic policy in the world's poorest countries. Lant Pritchett has been arguing for this position for at least 7 years without any published response from the EA community. Hauke Hillebrandt and I summarise his arguments here. My former colleagues from Founders Pledge, Stephen Clare and Aidan Goth, discuss the arguments in more depth here.
Updated addendum: At present, according to GiveWell, the best way to improve the economic outcomes of very poor people is to deworm them. This is on the basis of one very controversial RCT conducted in 2004. I don't think this is a tenable position.
I think I get the idea of what you’re saying, but I could be missing something in which case feel free to clarify in response to these two thoughts/comments:
It seems that some economic policy reforms rely a lot on percentage improvement gains, e.g., a 5% improvement in purchasing power/income, rather than solely absolute/fixed increases (e.g., +$100 per person)—although I imagine most are varying mixtures of fixed, percentage/linear, log, and/or exponential benefits relative to starting income. However, if a given policy results primarily in a constant percentage increase in income across two countries—one with high income and one with low income—does it matter which one gets the economic improvement under the logarithmic utility function? Doesn’t a 5% increase in income for a country with $100 of average income produce the same amount of utility as a 5% increase in income for a country with $1,000 average income (for a strictly log income => utility function)?
It’d be interesting to get a sense of how difficult it is to support/cause economic policy reform in rich countries vs. developing countries: that tractability consideration could shift things.
Overall though I think it’s good to be thinking about this alternative! I don’t know enough about the debate to really take a side, and like I said, I may missed some of your reasoning that dealt with this.
Hello! I will attempt to clarify, let me know whether this helps