4:50terms of deregulation and taking on new health initiatives, that things will be even more
54:56aggressive. MR. BROOKS: Your work all over the world is
54:59in so many facets and so many different areas. And I asked you to survey the sample of things
55:05that you’ve done to talk about the things you were proudest of, the greatest successes,
55:08what you’ve learned from that. I suppose I should ask you also what was, you think,
55:13in your view, your greatest failure and what you learned from that?
55:15MR. GATES: Well, we fail all the time because we back scientific approaches for creating
55:22vaccines and drugs that fail. We did a thing in education, which was changing the high
55:29school size to be more like 400 than 1,500. That actually – where we created a community,
55:39where the adults and all the kids, they had an expectation of what the kids were doing.
55:44That actually had good results. It raised attendance. It lowered violence. It actually
55:48raised completion rate about 15 percent. What it didn’t do on any meaningful level
55:53was raise the educational level of the kids who graduated. And so we called it college
56:00readiness. But we had a view of what sort of the reading, writing, math skills you’d
56:06have on graduation. It hardly moved that at all.
56:10And so when our goal was to get more kids to have the income uplift that a four- year
56:16degree provides you, it didn’t look like we were – we weren’t going to get to what
56:21we wanted to at all. And so we step back and say no. We have to get involved with helping
56:27teachers be more effective. We’ve got to learn about why the teachers in this country
56:35are not being more effective. And so that was a big change of strategy.
56:39Some people call it a failure. It’s a failure in the sense that our high goals for four-year
56:44completion were not going to be achieved. The kids were all better off in the smaller
56:50schools, measurably better off than they had been in the gigantic high schools.
56:54MR. BROOKS: Now, the reason that that’s an encouraging lesson is that you learned
56:59something and you didn’t adhere dogmatically to what you wished worked, but rather what
57:04did work. Are you able to take this lesson to public policymakers who tend to stay with
57:11the public policies that they wish worked, but manifestly don’t?
57:14MR. GATES: Well, public policy – we need more people examining effective ways to achieve
57:23public policy goals. And it’s unfortunate that, a little bit, the idea of making things
57:30more effective and getting rid of things, those are, you know, separate issues. So there
57:38should be a, you know, a class of people willing to say, OK, in terms of helping with deprivation
57:43in America, could we, by having less vertical programs, maybe achieve that for – you know,
57:49even be neutral about – for the same amount of money we spend today?
57:53And then, as a separate question, OK, you know, is that – are we spending too little
57:58or too much? Because the complexity of improvement is high – gathering data, trying different
58:04things out, and political dialogue isn’t very good at very complex things, a lot of
58:10the airtime, instead of being about relative approach, is about more or less, more or less.
58:17You know, take health care costs. Left, right, center – show me your best ideas for bending
58:24the health cost curve. Just getting rid of something, OK, is that going to bend the health
58:31care cost curve? What is the, you know, supply-demand equation, the nature of the professional rules,
58:38the nature of the innovation pipeline and the incentives in the innovation pipeline?
58:42I think there’s a dearth of ideas that are being really discussed that relate to what
58:51other than education may be the biggest, you know, government budget issue we face, which
58:57is are those health care costs going to crowd out every other government function.
59:05MR. BROOKS: This is submitted from one of our friends by email. The Gates Foundation
59:11divides its attention between philanthropic priorities here in the United States and overseas.
59:16There’s a real need and there’s a lot of inequality, opportunity inequality and
59:21consumption inequality, as you and I’ve discussed, here at home. So how – and this
59:26is, I guess, a question about the execution of philanthropy – how do you decide how
59:29you’re going to allocate the resources between these competing needs here in the United States
59:34and overseas? MR. GATES: Well, Melinda and I picked two
59:38things. We picked what we thought was the greatest inequity in the country that had
59:43created the conditions that allowed us to have this outside success. And that was education,
59:50both K-12 and higher ed. And then we decided what’s the greatest inequity globally. And
59:56there we started. And the core work is around global health. And that’s expanded a bit.
60:00Now, it’s got sanitation, agriculture, financial services, three or four additional things
60:06that are there to help uplift the poor. So we – you know, we’ve got two centers
60:11of activity. And you do have to specialize. And so far education has been our big domestic
60:21– we did a few other things. We put computers on libraries. We do a fair bit of things locally
60:28in the Seattle area, Washington State. But the big thing has been education.
60:33MR. BROOKS: I want to turn now to my colleague John Makin.
60:37JOHN MAKIN: Do I ask a question? (Laughter.) MR. BROOKS: If you could, put your statement
60:45in the form of a question. MR. MAKIN: Yes, I would. (Laughter.) Well,
60:48we have two things in common. We both spent a lot of time in Seattle, I teaching at UW,
60:53while you were revolutionizing the world. And we also think a lot about economics.
61:01But my question really has to do with the relationship between the Gates Foundation
61:05and the World Bank. When I started to think about questions for
61:10you, I looked at the World Bank’s budget and I saw that they – I believe they lay
61:15out around between $40 and $60 billion a year on a wide range of topics. So when you entered
61:22this field, did you feel – did you believe – you probably did – but how did you think
61:28about approaching it? Would you be catalytic with respect to the World Bank? In other words,
61:34get them to do things that – or do things yourself that they’re not doing? For example,
61:41the reduction in infant mortality, which is certainly a big success story, really was
61:48not underway for a lot of the time that the World Bank had substantial resources.
61:53Was that something that attracted you? Do you think that you can be more flexible than
61:59the World Bank in terms of moving from one priority to another? Really, how do you mesh
62:06with the World Bank? Thanks. MR. GATES: Yeah, we do a lot with the World
62:09Bank. I had dinner with Jim Kim – a long dinner – last night, because we overlap
62:15a lot in health and agriculture, and even areas we don’t overlap. We don’t do roads,
62:23but our agricultural programs work a lot better when there’s a road. (Laughter.) You want
62:29to get the inputs in and the outputs out. A road is a very clever way to do that. (Laughter.)
62:36And you know, it’s tragic. Africa, both in terms of power infrastructure that we need
62:41and roads is way, way behind. And they’re – and Africa really is bumping up on GDP
62:48levels that won’t go up unless they solve those infrastructure problems. They’ve got
62:53to solve the health problems. They’ve got to solve the agriculture productivity. You
62:58know, unfortunately economic advance requires a lot of ends, a lot of things that come together,
63:04including education and governance as well. The World Bank numbers, though, you can’t
63:10really compare them directly to our numbers because those are loan numbers. And so you
63:15have IBRD loans that are market rate loans. And you know, they tend – you know LIBOR
63:21– they tend to be pretty competitive. But it’s the IDA piece and sort of the forgiveness
63:28part of that loan portfolio that is the really significant overlap with what our foundation
63:35does. And there’re a number of actors out there.
63:39UNICEF, in the childhood space. The agency that did the most for child mortality was
63:45a guy named Jim Grant during the 1980s, where he convinced countries they needed to raise
63:50vaccination rates. And they were below 30 percent when he started. And they went up
63:56to over 70 percent within that decade. So he probably saved more children’s lives
64:03than anyone. Now, there’s various inventors of vaccines.
64:06There’s Deng Xiaoping. There’s various people who did things that saved a lot of
64:10children’s lives. But he’d be certainly high on the list.
64:15We – there’s an area we operate that World Bank doesn’t operate in, which is upstream
64:20research. So the invention of the malaria vaccine, World Bank does not put any money
64:26into that. They don’t have people who know about that. The only – the other big funder
64:31of that is the National Institutes of Health, particularly the National Institute for Allergy
64:37and Infectious Diseases, Tony Fauci’s part of NIH. They and over 80 percent of the infectious
64:43disease research funding comes either from us or from them. So they are a deep collaborator
64:50there. With World Bank, the thing that we’re super
64:53excited about – there’s two things we’re super excited about doing together. One is
64:57fixing primary health care because some African governments have done it well, a lot have
65:02not. And it’s basically a personnel system. And we’re doing a report card, like the
65:07World Bank Doing Business report card. And we’re going to do that in the agricultural
65:12space, which is really about how do you turn your agricultural sector into – to make
65:16it as market driven as possible. Are you