Orazem earns approval for education plan


Photo: Kendra Plathe/Iowa State

Peter Orazem, professor of economics, earned Nobel Laureates’ approval for his education plan at Copenhagen Consensus.

Dan Mackenzie

Peter Orazem, professor of economics, likes to help people. He serves on the Ames City Council, works late into the night with graduate students discussing their research, and more often than not he is assisting developing nations to make people’s lives better. And although he has devoted so much time to helping others both at home and abroad, he says he never set out to change the world.

“I didn’t set out to be a development economist,” Orazem said. “I think when you have good skills you can apply them to lots of interesting places.” 

On the wall of his office are pictures of foreign landscapes, hangings with Chinese lettering on them, chalkboards filled with equations and shelf upon shelf of books and journals. The work in his office reaches far beyond its second floor in Heady Hall.

Most recently his work reached Copenhagen, Denmark, where he was invited to speak to a panel of a handful of the world’s foremost economists at the Copenhagen Consensus 2012. The meeting has been held every four years since 2004 to discuss ways that researchers and thinkers can better the world. This year the group had 12 areas of focus including climate change, infectious disease, armed conflict and, in Orazem’s case, education.

At the consensus, Orazem earned approval from top-ranking economists, four of which are Nobel Laureates. 

Each of the 12 areas of focus has one person or one group of researchers that devotes roughly a year looking into ways the world could be bettered by philanthropy in that area. The researches submit their findings for review to  five-person panel, which ranks the suggestions in order of priority. Because this is an economic forum, the ideas are analyzed only from a cost-benefit analysis — the most bang for the buck. Moral arguments for a project are not formally included.

Orazem submitted a paper that focused on three ways developing nations can improve education, especially among poor children. The first suggestion was a combination of improving micronutrients in children’s diets and medication to remove intestinal parasites. Children who do not have proper nutrition have been proven to develop permanent malnutrition and health issues as adults and are less likely to get out of poverty in their lifetime.

“When you’re young, it turns out some things like being protein deprived or iron or zinc, some of these micronutrient deprivations change how your brain develops,” Orazem said. “They now know that stunting, both physically but also mentally, permanently disables your abilities.”

The idea is that the healthier a child is, the more likely they will be to continue attending school, they will learn more, and they will have a better chance to exit the cycle of poverty.

The process would be to provide something like a vitamin pill or supplement to the kids, giving them de-worming medication to ensure the child gets those nutrients, and not the parasites, and administering basic healthcare. The combined cost of parasite removal and micronutrient support has been estimated at only about $25 dollars per year, per child, resulting in benefits that are much higher.

The second recommendation is simple. Orazem said just telling people that staying in school will help them be successful can change their attitudes. Information campaigns are an area that has not had many studies completed. But panelist Nancy Stokey, professor of economics at the University of Chicago, said it is a novel solution. She ranked the idea higher on her list to draw attention to it as “a promising idea.”

One of the few studies on these campaigns was completed in Madagascar. At a cost of only $2.30 per child, researchers were able to extrapolate the investment to results nearly 600 times higher. It is a simple idea but one that could have long lasting effects.

Lastly, Orazem sees a lot of potential in a system called conditional cash transfers. Many children quit attending school because it is a cost their families simply cannot bear. Sometimes it is the cost of schooling, or perhaps the parent in a family becomes ill and can no longer work — and the child starts working to keep the family fed.

“Often time the kids are the insurance policies for the family,” Orazem said. These conditional cash transfers subsidize the family so that kids can stay in school longer.

Orazem said the system works if the transfer is tied to certain requirements. There are usually benchmarks for attendance, like 80 percent of classes for the month; the child also attends health clinics, and family members (usually the mother) attend training regarding the health of the family as a whole.

“What you’re trying to do is to say, ‘We’re going to condition the payment on behaviors that we think are going to permanently increase the odds that your kids are going to escape poverty,” he said.

It is a system that has been proven in countries like Mexico and Brazil, and the results show that for every dollar the government spends in these programs, they can expect to see $9 in return. It seems to be an expenditure than poorer countries are very keen to adopt, Orazem said.

“What’s amazing is how many people, in countries where they don’t have a lot of resources say, ‘You know we’ve got a lot of poor people, if we’re going to try to benefit the poor we want to make sure that we’re actually increasing the chance that we’ll have fewer poor people in the future,’” he said. “In the U.S., we don’t seem to take that perspective. But it seems to me to be a relevant one. Try to reinforce the behaviors that are going to increase the odds that your kids will [exit poverty].”

Overall, Orazem’s paper was received quite well by the consensus panel. His ideas were ranked fourth, 13th and 15th among the 30 that were submitted. He was also included as part of the number one recommendation that combined his and other’s ideas regarding nutrition in children.

Orazem, of course, continues to work in helping people. One of his current projects is studying children in Pakistan and social promotion in schools. He likens it to America, where kids are sometimes moved ahead simply because they finished the year or are held back because of poor performance.

Lastly he has words of advice for students at Iowa State:

“The key thing is, if you’re interested in working in developing countries, train like you were working in the United States. Developing countries aren’t interested just in people who are sympathetic; they’re interested in people who have skills that transfer. The same sorts of skills that are necessary in the United States are necessary for doing work in developing countries.”