Poor Economics

Poor Economics:
A Radical Rethinking of the Way to Fight Global Poverty  
Author(s) Abhijit V. Banerjee
Esther Duflo
Country United States
Language English
Subject(s) Economics
Genre(s) Non-fiction
Publisher PublicAffairs
Publication date April 26, 2011
Media type Hardback
Pages 320 pp
ISBN ISBN 9781586487980

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (2011) is a non-fiction book by Abhijit V. Banerjee and Esther Duflo, both professors of Economics at MIT. The book reports on the effectiveness of solutions to global poverty using a evidence-based randomized control trial approach. It won the 2011 Financial Times and Goldman Sachs Business Book of the Year Award.[1]

Contents

Overview

For more than fifteen years Abhijit V. Banerjee and Esther Duflo have worked with the poor in dozens of countries spanning five continents, trying to understand the specific problems that come with poverty and to find proven solutions. They looked at questions such as: Why would a man in Morocco who doesn’t have enough to eat buy a television? Why is it so hard for children in poor areas to learn even when they attend school? Why do the poorest people in the Indian state of Maharashtra spend 7 percent of their food budget on sugar? Does having lots of children actually make you poorer?

Per the title, the book is a 'radical rethinking' of the economics of poverty, but it also offers practical solutions. Through a careful analysis of a body of evidence, including hundreds of randomized control trials Banerjee and Duflo’s lab pioneered, they show why the poor, despite having the same desires and abilities as anyone else, end up with entirely different lives. Banerjee and Duflo used randomized control trials across five continents to test the impact of policies aimed at beating poverty.

Through their work, Banerjee and Duflo look at some of the most surprising facets of poverty: why the poor need to borrow in order to save, why they miss out on free life-saving immunizations but pay for drugs that they do not need, why they start many businesses but do not grow any of them, and many other puzzling facts about living with less than 99 cents per day.

Poor Economics argues that so much of anti-poverty policy has failed over the years because of an inadequate understanding of poverty. The battle against poverty can be won, but it will take patience, careful thinking and a willingness to learn using an evidence-based approach based on randomized control trials.

Website

A website was created to supplement the book. The website has a page for each chapter where an introduction is given to the chapter. A map showing all the studies used in the chapter and these studies are linked to their original sources. There is a column which provide links to webpages of all the researchers mentioned in the chapter. The page also has all the data and figures mentioned in the chapter in the book and it also provide interactive tools to play with the data. The unique feature of page is "What Can You Do" Column, this column gives the link of major organizations working in the field or for the problem discussed in the chapter. The website provides material to help someone understand the concepts discussed in the book.

About the Authors

Abhijit V. Banerjee is the Ford Foundation International Professor of Economics at MIT and a founder of the Abdul Latif Jameel Poverty Action Lab (J-PAL).[2] He is a fellow of the American Academy of Arts and Sciences[3] and the Econometric Society[4] and has been a Guggenheim Fellow.[5] He has also received the inaugural Infosys Prize 2009 in Social Sciences and Economics.[6]

Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT and a founder and director of the Abdul Latif Jameel Poverty Action Lab (J-PAL).[7] Duflo has received numerous academic honors and prizes, including most recently the John Bates Clark Medal (2010)[8] and a MacArthur Fellowship (2009).[9] She has also been featured in Foreign Policy's Top 100 Global Thinker[10] and Fortune 40 under 40.[11]

Reception

The book has been well received. Robert Solow commented:

“Abhijit Banerjee and Esther Duflo are allergic to grand generalizations about the secret of economic development. Instead they appeal to many local observations and experiments to explore how poor people in poor countries actually cope with their poverty: what they know, what they seem (or don't seem) to want, what they expect of themselves and others, and how they make the choices that they can make. Apparently there are plenty of small but meaningful victories to be won, some through private and some through public action, that together could add up to a large gains for the world's poor, and might even start a ball rolling. I was fascinated and convinced.”

The Guardian wrote:

“[Banerjee and Duflo] offer a refreshingly original take on development, and they are very aware of how they are bringing an entirely new perspective into a subject dominated by big polemics from the likes of Jeffrey Sachs and William Easterly… they are clearly very clever economists and are doing a grand job to enrich their discipline's grasp of complex issues of poverty – so often misunderstood by people who have never been poor.”

The New York Times wrote:

“Randomized trials are the hottest thing in the fight against poverty, and two excellent new books have just come out by leaders in the field. One is “Poor Economics,” by Abhijit Banerjee and Esther Duflo… These terrific books move the debate to the crucial question: What kind of aid works best?”

The Wall Street Journal wrote:

“Marvelous, rewarding…’More Than Good Intentions’ and ‘Poor Economics’ are marked by their deep appreciation of the precariousness that colors the lives of poor people as they tiptoe along the margin of survival. But I would give an edge to Mr. Banerjee and Ms. Duflo in this area—the sheer detail and warm sympathy on display reflects a true appreciation of the challenges their subjects face… They have fought to establish a beachhead of honesty and rigor about evidence, evaluation and complexity in an aid world that would prefer to stick to glossy brochures and celebrity photo-ops. For this they deserve to be congratulated—and to be read.”

Editions

References

  1. ^ Andrew Hill. "‘Poor Economics’ takes business book prize", Financial Times, 3 Nov 2011.
  2. ^ About Abhijit V. Banerjee
  3. ^ American Academy of Arts and Sciences Book of Members, 1780-2010 Chapter B page.5
  4. ^ Fellows of the Econometric Society as of February 2011
  5. ^ Guggenheim Fellows list in Social Sciences
  6. ^ Laureates - Infosys Prize 2009
  7. ^ About Esther Duflo
  8. ^ List of John Bates Clark Medal by American Economic Association
  9. ^ MacArthur Fellows Program 2009 Fellows
  10. ^ Foreign Policy Top 100 Global Thinker List page.33
  11. ^ Fortune's 40 under 40 Candidate No.19

External links