Harnessing Ideas to Idealism
| Author | Arvind Subramanian profiles Michael Kremer |
| Position | Senior Fellow, Peterson Institute for International Economics and Center for Global Development, and Senior Research Professor, Johns Hopkins University |
| Pages | 6-9 |
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Ideas in economics can sometimes prompt policies that promote the greater good. But ideas motivated by idealism and then pursued with intense commitment are rare. Yet these are the qualities that make Michael Kremer, the Gates Professor of Developing Societies at Harvard University, so special, according to his many colleagues and students.
As Abhijit Banerjee of the Massachusetts Institute of Technology, Kremer's colleague and coauthor, explains: "When most economists come up with an idea that might make the world a better place, they assume that they must have got it wrong, on the grounds that if it were correct it would be in place already, and, reluctantly, decide to forget about it. Michael immediately starts to think of ways to make it happen."
And make it happen, he does. His intellectual work and indefatigable public persuasion recently paved the way for the creation of a new mechanism called advance market commitments (AMCs) to further the development of a vaccine against pneumococcal diseases, which claim the lives of up to a million children in poor countries each year. Robert Barro, one of the gurus of the study of economic growth and Kremer's advisor at Harvard, says that the AMC idea "is likely to make an unprecedented contribution to the improvement of health outcomes in the world's neediest countries."
Kremer has also helped introduce a major methodological innovation in empirical development economics: the randomized evaluation of public policy interventions. This has not only helped rehabilitate the discipline of development economics in academia, it has moved governments and nongovernmental organizations (NGOs) around the world to more rigorously evaluate their activities and their impact. And he has made other important academic contributions, many with the common theme of identifying ways to work collaboratively (typically at the international level) to improve the welfare of poor people. Fellow Harvard professor and Nobel Laureate Amartya Sen stresses that Kremer "has made an outstanding contribution in combining economic theory and sophisticated empirical techniques and applying it to critical policy issues in development economics."
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Kremer, now 43, grew up in Kansas and attended Harvard as an undergraduate. Trips to South Asia and Kenya-where he spent a year teaching mathematics and science to students and devoting a lot of time to getting a resource-starved school in remote western Kenya up and running-triggered his interest in development. Kremer followed up on the Kenya experience by starting WorldTeach, a nonprofit organization that now sends 370 teachers annually to schools in the developing world, including such places as the Marshall Islands. He also equipped himself with a graduate degree in economics from Harvard, followed by professorships, first at the Massachusetts Institute of Technology and then at Harvard.
In February 2007, five countries-Canada, Italy, Norway, Russia, and the United Kingdom-and the Bill & Melinda Gates Foundation announced they would dedicate $1.5 billion to an AMC (see Box 1) to help pay for the development of a vaccine against pneumococcal diseases, such as pneumonia and meningitis. That historic announcement thrilled Kremer, who had spent years developing the idea.
Box 1. What is an advance market commitment?
An advance market commitment (AMC) aims to create a market for future vaccines that is large and credible enough to stimulate private investment in vaccine research and to accelerate development and the creation of manufacturing capacity for vaccines that primarily address diseases of developing countries.
An AMC requires sponsors (or donors) to make legally binding financial commitments to support a market of a pre-agreed value. Companies participating in AMC agreements commit to supply a successful vaccine at a guaranteed price. An independent adjudication committee would be set up to determine whether the vaccine met those criteria. Then, as long as there is effective demand from developing countries (that is, countries express a wish to introduce the vaccine), the company can receive the funds from the AMC at the price negotiated.
Once the AMC is exhausted, companies are required, within the terms of the commitment...
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