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# Lessons from Michael Kremer
- URL: https://www.antoinebuteau.com/lessons-from-michael-kremer/
- Published: 2026-07-01T20:41:30.000Z
- Updated: 2026-07-18T21:37:19.000Z
- Description: Michael Kremer, an economist, shifted poverty research toward measuring what works. His field experiments, Advance Market Commitments, and O-Ring theory show how practical interventions can address health, agriculture, and institutional design while small errors bottleneck entire economies.
- Author: Antoine Buteau
- Tags: Profile, Finance & Economics Profiles

![Visual summary of operating lessons from Michael Kremer.](https://www.antoinebuteau.com/content/images/2026/07/lessons-from-michael-kremer-profile-infographic.webp)

## Lessons from Michael Kremer

Economist Michael Kremer shifted the study of poverty toward measuring what actually works. He designed Advance Market Commitments to fund vaccines and developed the O-Ring theory to explain how small errors bottleneck entire economies. This profile covers his use of field experiments to solve practical problems in health, agriculture, and institutional design.

### Part 1: The O-Ring Theory of Economic Development

1. **On the fragility of complex production:** "Modern production processes consist of a sequence of tasks where a single failure can destroy the value of the entire project, much like the O-ring on the Space Shuttle Challenger." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
2. **On skill sorting:** "Because production relies on the proficiency of all tasks, firms have an incentive to match high-skill workers together." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
3. **On wage inequality:** "Wages rise steeply with skill levels because highly proficient workers are exponentially more productive when matched with equally proficient peers." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
4. **On development traps:** "Countries can get stuck in low-skill equilibria; if a nation lacks a critical mass of skilled workers, firms will avoid investing in complex, high-value production." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
5. **On the multiplier effect of skill:** "A high-skill economy benefits from a multiplier effect, where the collective proficiency of the workforce drives output vastly higher than the sum of individual contributions." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
6. **On bottlenecks in manufacturing:** "A highly skilled worker paired with an unskilled worker who makes frequent mistakes will find their productivity bottlenecked by their partner’s errors." — [*Source: \[American Economic Association*](https://www.aeaweb.org/?ref=antoinebuteau.com)*\]*
7. **On international trade:** "Opening up to international markets allows developing countries to import better technology and integrate into global supply chains, effectively bypassing local skill bottlenecks." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
8. **On capital accumulation:** "Capital will not flow to countries with low-skill labor forces because the complementarity between tasks makes physical capital investments less profitable there." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*
9. **On product quality:** "Rich countries specialize in producing more complex goods rather than simply producing larger quantities of the same goods as poor countries." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje/article-abstract/108/3/551/1874251?ref=antoinebuteau.com)*\]*

### Part 2: Experimental Economics and Field Work

1. **On the experimental approach:** "The experimental approach is characterized by dividing broad issues into smaller, more manageable questions that can be rigorously tested." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*
2. **On testing economic theory:** "Field experiments allow economists to move beyond observational data to directly test mechanisms and isolate causal relationships in real-world settings." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*
3. **On local coordination:** "The idea of local authorities being an obstacle is a misconception; coordinating with local stakeholders provides valuable, practical perspectives." — [*Source: \[Conversations with Tyler*](https://conversationswithtyler.com/episodes/michael-kremer/?ref=antoinebuteau.com)*\]*
4. **On evidence-based policy:** "When governments and non-profits base their decisions on randomized controlled trials, they can direct scarce resources toward the most cost-effective interventions." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
5. **On iterating interventions:** "Like A/B testing in the tech industry, development interventions must be continually tested and refined to discover what actually works on the ground." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*
6. **On unanticipated results:** "Experiments often yield surprising results that contradict both common sense and established economic theory, highlighting the need for empirical validation." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
7. **On scaling success:** "Identifying a successful intervention in one context is only the first step; the next challenge is understanding whether and how it scales to different populations." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
8. **On the role of NGOs:** "Non-governmental organizations are often more willing than governments to serve as testing grounds for unproven but potentially high-impact social programs." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
9. **On the evolution of economics:** "The shift toward field experiments has transformed development economics from a theoretical discipline into an applied, policy-oriented science." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*

### Part 3: Health, Deworming, and Externalities

1. **On school absenteeism:** "A school-based mass deworming treatment in Kenya led to a 25 percent reduction in school absenteeism among children." — [*Source: \[Econometrica*](https://www.econometricsociety.org/publications/econometrica?ref=antoinebuteau.com)*\]*
2. **On treatment externalities:** "Treating children for worms benefits even the untreated children in the same community by reducing the overall prevalence and transmission of the parasite." — [*Source: \[Econometrica*](https://www.econometricsociety.org/publications/econometrica?ref=antoinebuteau.com)*\]*
3. **On long-term economic gains:** "Children who received additional years of deworming treatment experienced a 13 percent increase in hourly earnings as adults." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
4. **On cost-effective public health:** "Delivering deworming medication through existing school infrastructure makes it one of the most cost-effective ways to increase school participation." — [*Source: \[Evidence Action*](https://www.evidenceaction.org/?ref=antoinebuteau.com)*\]*
5. **On user fees in health:** "Introducing even small copayments for preventative health products like deworming pills or mosquito nets drastically reduces their adoption among the poor." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje?ref=antoinebuteau.com)*\]*
6. **On consumption improvements:** "Long-term follow-ups of deworming recipients showed a 14 percent increase in consumption expenditures two decades after the initial treatment." — [*Source: \[PNAS*](https://www.pnas.org/?ref=antoinebuteau.com)*\]*
7. **On scaling deworming:** "The evidence from Kenya directly inspired the Deworm the World Initiative, which now reaches hundreds of millions of children globally." — [*Source: \[Evidence Action*](https://www.evidenceaction.org/?ref=antoinebuteau.com)*\]*
8. **On evaluating public goods:** "Standard economic evaluations often underestimate the value of health interventions because they fail to account for positive epidemiological externalities." — [*Source: \[Econometrica*](https://www.econometricsociety.org/publications/econometrica?ref=antoinebuteau.com)*\]*
9. **On health as human capital:** "Improving child health is a fundamental investment in a country's future human capital and economic capacity." — [*Source: \[American Economic Association*](https://www.aeaweb.org/?ref=antoinebuteau.com)*\]*

### Part 4: Advance Market Commitments and Vaccine Development

1. **On the hold-up problem:** "Pharmaceutical companies historically lacked incentives to invest in vaccines for neglected diseases because they feared developing countries could not afford them once created." — [*Source: \[Center for Global Development*](https://www.cgdev.org/?ref=antoinebuteau.com)*\]*
2. **On market creation:** "An Advance Market Commitment functions as a pull mechanism, guaranteeing a minimum price for a vaccine that meets specific efficacy standards." — [*Source: \[Center for Global Development*](https://www.cgdev.org/?ref=antoinebuteau.com)*\]*
3. **On sinking R&D costs:** "By creating a predictable future market, donors can encourage private firms to sink the massive upfront costs required for vaccine research and manufacturing." — [*Source: \[Center for Global Development*](https://www.cgdev.org/?ref=antoinebuteau.com)*\]*
4. **On the pneumococcal pilot:** "The $1.5 billion pilot AMC for the pneumococcal vaccine successfully accelerated its development, ultimately saving an estimated 700,000 lives." — [*Source: \[Gavi, the Vaccine Alliance*](https://www.gavi.org/?ref=antoinebuteau.com)*\]*
5. **On at-risk investments:** "Making at-risk investments in vaccine manufacturing capacity prior to clinical approval can save billions of dollars and significantly accelerate distribution during a crisis." — [*Source: \[IMF Podcasts*](https://www.imf.org/?ref=antoinebuteau.com)*\]*
6. **On optimal AMC design:** "The structure of an AMC should vary depending on the product’s stage of development, balancing the need to incentivize innovation with the goal of securing low long-term prices." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
7. **On late-stage vs. early-stage innovation:** "Pull mechanisms are particularly effective for late-stage development where the desired product can be clearly specified in advance." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje?ref=antoinebuteau.com)*\]*
8. **On adapting AMCs for COVID-19:** "The core principles of advance market commitments were instrumental in funding and expediting the rapid production of COVID-19 vaccines." — [*Source: \[National Bureau of Economic Research*](https://www.nber.org/?ref=antoinebuteau.com)*\]*
9. **On global public goods:** "Mechanisms that stimulate private investment in global public goods can deliver returns on investment that vastly exceed standard aid programs." — [*Source: \[Center for Global Development*](https://www.cgdev.org/?ref=antoinebuteau.com)*\]*

### Part 5: Education and Human Capital

1. **On input-based education policy:** "Simply providing more textbooks or reducing class sizes in developing countries often fails to improve test scores if the underlying pedagogical approach remains unchanged." — [*Source: \[American Economic Journal*](https://www.aeaweb.org/journals/aej?ref=antoinebuteau.com)*\]*
2. **On tracking and peer effects:** "Grouping students by initial achievement levels can benefit both high- and low-achieving students by allowing teachers to target their instruction more effectively." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
3. **On teacher incentives:** "Tying teacher pay to student test scores can increase attendance and test-taking, but it also risks encouraging teachers to teach narrowly to the test." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
4. **On remedial education:** "Targeted remedial education programs, even when delivered by young, informally trained tutors, can substantially improve basic literacy and numeracy skills." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje?ref=antoinebuteau.com)*\]*
5. **On health as an educational input:** "Often, the cheapest way to improve educational outcomes is not through traditional educational inputs, but by treating highly prevalent diseases that keep kids out of school." — [*Source: \[Econometrica*](https://www.econometricsociety.org/publications/econometrica?ref=antoinebuteau.com)*\]*
6. **On information asymmetries in schooling:** "Providing parents with accurate information about the economic returns to education can significantly increase school enrollment and attendance." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
7. **On contract teachers:** "Hiring local contract teachers, who face contract renewal based on performance, can sometimes deliver better student outcomes than relying solely on tenured civil-service teachers." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
8. **On the illusion of free education:** "Even when schooling is technically free, the hidden costs of uniforms, supplies, and lost child labor can be prohibitive for the poorest families." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
9. **On scalable education models:** "Standardized, highly structured pedagogical programs have shown the ability to deliver consistent learning gains across varying contexts when implemented at scale." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*

### Part 6: Agricultural Technology and Smallholder Farmers

1. **On agricultural advice:** "Delivering customized, science-based agricultural advice directly to smallholder farmers via mobile phones is a low-cost way to significantly boost crop yields." — [*Source: \[Precision Development*](https://precisiondevelopment.org/?ref=antoinebuteau.com)*\]*
2. **On digital extension services:** "Digital extension can bypass the logistical bottlenecks of traditional in-person agricultural training, reaching millions of farmers at a fraction of the cost." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*
3. **On underutilization of fertilizer:** "Despite high potential returns, many smallholder farmers fail to use fertilizer due to behavioral barriers and a lack of reliable information." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
4. **On human-centered weather forecasting:** "Translating complex meteorological data into actionable, localized advice helps farmers make better decisions about when to plant and apply inputs." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*
5. **On technology adoption barriers:** "The gap between the social need for resilient crops and the commercial incentives for R&D leaves poor farmers vulnerable to climate and pest shocks." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
6. **On input subsidies:** "Time-limited subsidies offered just after harvest, when farmers have cash on hand, can significantly increase the adoption of agricultural inputs." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
7. **On risk and experimentation:** "Farmers in developing nations operate at the margin of subsistence, making them rationally hesitant to risk their crop on unproven agricultural technologies." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
8. **On mobile money and agriculture:** "The integration of mobile money platforms reduces transaction costs, enabling farmers to save for inputs and better manage seasonal cash flow." — [*Source: \[Precision Development*](https://precisiondevelopment.org/?ref=antoinebuteau.com)*\]*
9. **On soil testing:** "Providing farm-specific soil testing results can help farmers optimize their fertilizer use, shifting from generic recommendations to targeted nutrient management." — [*Source: \[Precision Development*](https://precisiondevelopment.org/?ref=antoinebuteau.com)*\]*
10. **On agricultural pull mechanisms:** "The AMC model used for vaccines can be adapted to agriculture, guaranteeing markets for innovations like drought-resistant seeds tailored to low-income regions." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*

### Part 7: Behavioral Economics in Development

1. **On present bias:** "Present-biased preferences, or procrastination, explain why individuals often fail to make small, immediate investments that yield large future returns." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
2. **On commitment devices:** "Offering farmers the option to purchase fertilizer vouchers immediately after harvest acts as a commitment device, overcoming the temptation to spend the cash elsewhere." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
3. **On nudges in public health:** "Small behavioral nudges, such as text message reminders, can significantly improve adherence to medical regimens and water treatment protocols." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
4. **On the psychology of pricing:** "The demand for preventive health products in developing countries is highly elastic around zero; charging even a nominal fee signals a transaction rather than an entitlement, drastically reducing uptake." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje?ref=antoinebuteau.com)*\]*
5. **On bounded rationality:** "Development programs must be designed with the understanding that people have limited cognitive bandwidth and cannot always process complex information perfectly." — [*Source: \[Conversations with Tyler*](https://conversationswithtyler.com/episodes/michael-kremer/?ref=antoinebuteau.com)*\]*
6. **On default options:** "Setting the default option to enrollment in savings or health programs dramatically increases participation, leveraging inertia for positive outcomes." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
7. **On peer effects and behavior:** "An individual's likelihood of adopting a new technology or behavior is strongly influenced by the adoption decisions of their immediate social network." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
8. **On the cost of complexity:** "Simplifying the application process for social programs is often more effective at increasing uptake than increasing the financial value of the benefit itself." — [*Source: \[Poverty Action Lab*](https://www.povertyactionlab.org/?ref=antoinebuteau.com)*\]*
9. **On self-control in saving:** "Without formal banking, people in developing economies often rely on informal rotating savings and credit associations to enforce self-control in saving." — [*Source: \[Quarterly Journal of Economics*](https://academic.oup.com/qje?ref=antoinebuteau.com)*\]*
10. **On rational procrastination:** "When the cost of making a decision is immediate but the benefits are delayed and uncertain, procrastination is a predictable behavioral response." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*

### Part 8: Innovation Policy and Meta-Institutions

1. **On meta-innovations:** "Meta-innovations are new social institutions or mechanisms explicitly designed to accelerate the pace of scientific and technological progress." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*
2. **On shaping innovation:** "We must actively shape the direction of innovation to ensure it addresses human needs, such as expanding access to clean water, rather than solely serving affluent markets." — [*Source: \[Effective Altruism*](https://www.effectivealtruism.org/?ref=antoinebuteau.com)*\]*
3. **On the cost-effectiveness of innovation:** "Investing in innovation is highly cost-effective because the upfront costs of development are relatively low compared to the massive impacts achieved at scale." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*
4. **On economists as founders:** "Academic economists have a unique opportunity to act as founders, designing and launching institutions that directly apply economic theory to social problems." — [*Source: \[Conversations with Tyler*](https://conversationswithtyler.com/episodes/michael-kremer/?ref=antoinebuteau.com)*\]*
5. **On open science:** "Promoting open science and data sharing is a critical meta-innovation that reduces duplication of effort and accelerates the accumulation of knowledge." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*
6. **On public funding for R&D:** "Because innovation is a global public good, governments and philanthropic organizations must step in to fund research that the private sector will ignore." — [*Source: \[IMF Podcasts*](https://www.imf.org/?ref=antoinebuteau.com)*\]*
7. **On institutional capacity:** "A core challenge in development is building local institutional capacity that can sustain and adapt innovations after the initial funding ends." — [*Source: \[Development Innovation Lab*](https://bfi.uchicago.edu/dil?ref=antoinebuteau.com)*\]*
8. **On matching funds:** "Government matching funds for philanthropic investments in R&D can align incentives and draw more resources toward neglected global challenges." — [*Source: \[Center for Global Development*](https://www.cgdev.org/?ref=antoinebuteau.com)*\]*
9. **On innovation prizes:** "Prizes and milestone payments offer an alternative to traditional grant funding, paying only for successful outcomes and transferring the risk of failure to the innovators." — [*Source: \[American Economic Review*](https://www.aeaweb.org/journals/aer?ref=antoinebuteau.com)*\]*
10. **On the future of development:** "The future of poverty alleviation lies in our ability to design markets and institutions that systematically generate and scale solutions for the world's most vulnerable people." — [*Source: \[NobelPrize.org*](https://www.nobelprize.org/prizes/economic-sciences/2019/kremer/lecture/?ref=antoinebuteau.com)*\]*