Clinical Economics or Differential Diagnostics

Jeff Sachs and Tyler Cowen had a conversation at the Mercatus Center (perhaps you’ve heard about it). (My brother actually got to attend this in person! The rest of us had to settle for the video. I’m still jealous!) It is a fascinating video and no matter what you think about Jeff Sach’s ideas, it is difficult to watch this video and not realize he is brilliant. The best part (in my opinion) of this conversation is when Sach’s compares how the economics profession acts compared to his wife’s profession (pediatrics). Start listening at about the 20 minute mark for the differential diagnostics discussion.


Jeff Sachs: I should explain this idea of clinical economics, as I’ve called it, or differential diagnosis. When you’re married to a pediatrician, as I have been for 35 wonderful years, you get up in the middle of the night a lot when patients call with a very sick child.

I’ve listened to my wife take an oral history a thousand — thousands of times, perhaps. It’s a wonderful art, first of all, because a mother calls with a crisis of a baby or a young child — usually a high fever. The first thing that is important to know is that there are a thousand possible etiologies of that fever. My wife doesn’t say institutions. She says . . .


Jeff Sachs: . . . “It depends. Let’s hear your problem. Oh, you’re in a desert, you’re here, you’re this . . .” No, when it comes to the child, it could be something as normal as a common cold or a something as devastating as meningitis.

The purpose of a differential diagnosis is two things. First, it is of course to try to get to the core reasons so that you can make a proper prescription based on a proper diagnosis. Second, it’s done in a way that you’re minimizing serious risk.

The first question always that my wife asks is, “Is the baby’s neck stiff, or do you notice that?” Because that’s one of the symptoms of meningitis. If the mother answers that way, the next point is “I’ll meet you at the emergency room. Don’t stop. Just go.” Because it could be something that is fulminant and life-threatening immediately.

If it’s not that, then it can go on for an hour.

But by the way, it’s not just an hour of questions. It’s an hour of sequenced questions down a decision tree, and it’s fascinating to watch. I wish as economists we had those basic skills inbred. I certainly didn’t learn them, and it took me a long time of seeing lots of “patients” to see that one needs that same kind of approach.

That’s what I mean by differential diagnosis. Why it’s so annoying to me, the one explanation fits all viewpoints. Because now I’ve seen a lot of places, a lot of crises, a lot of challenges. One of the things that I discovered was how poor our profession is at times in having that sense that the problem that you saw over there is not the same as the problem that you’re seeing here.

Tyler Cowen: Let me push on this a bit and see if you can convert me into being more of a Sachsian. One of my worries is that the doctors are not actually in charge. It may be the lawyers, which is . . . We’re in a law school, but still, if I may say, in some ways a step down.

To some extent you have people voting on the baby, not all of whom even know who the baby is or what the baby’s symptoms are. The differential diagnostics may exist in a kind of platonic realm, but you are more optimistic about them than I am.

What would you tell me to address my skepticism and make me more of a Sachsian, given that I have this reluctance to embrace your view the way you hold it?

Jeff Sachs: I think I get what you’re driving at and I do have a fundamental view of at least how I want to proceed professionally. But it’s also based a bit on a theory of change.

Tyler Cowen: Tell us the theory.

Jeff Sachs: I believe that knowledge matters and that the more clarity, the more evidence, the more appropriate an analysis, the more likely we can find a good outcome to things. Many people are cynical. I tend not to be. I’m sometimes accused of being gullible as a result, or being too soft in the face of whatever. But I believe that there’s a way to reach an agreement, typically, among pretty conflictual and often pretty antagonistic actors.

I think its a good point and one that needs to be made. (It is the sort of something that goes without saying, yet often goes unsaid.) We can quibble over the practical and technical differences between the specifics of pediatrics and economic development, but I think the broader point holds. Those working in development are often motivated by the vast challenges, the vast human suffering, and the vast needs. Perhaps because of this we want to fix it all. We want to create the panacea for global development. This goal or notion is misguided. Surely doctors go into medicine for similar reasons; the vast challenges, the vast human suffering, and the vast needs. No doctor, however, starts their career with the goal of trying to develop a cure for all human diseases. 

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