Poor Economics

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Poor Economics:
A Radical Rethinking of the Way to Fight Global Poverty
Poor Economics.jpg
Author Abhijit V. Banerjee
Esther Duflo
Country United States
Language English
Subject Economics
Genre Non-fiction
Publisher PublicAffairs
Publication date
April 26, 2011
Media type Hardback
Pages 320 pp
ISBN ISBN 978-1-58648-798-0

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 an evidence-based randomized control trial approach. It won the 2011 Financial Times and Goldman Sachs Business Book of the Year Award.[1]

Overview[edit]

Poor Economics lays out a middle ground between purely market-based solutions to global poverty, versus "grand development plans." It rejects broad generalizations and formulaic thinking. Instead, the authors help to understand how the poor really think and make decisions on such matters as education, healthcare, savings, entrepreneurship, and a variety of other issues. They advocate the use of observation, using rigorous randomized controlled testing on five continents, and most importantly by actually listening to what the poor have to say. Often the answers are startling and counter-intuitive, but make the utmost sense when circumstances are understood. In addition, the universal traps of Ignorance, Ideology, and Inertia often stymie policies and institutions, but may be avoided.

From this empirical approach, the authors believe that the best strategies for eradicating poverty can emerge. However, they resist laying out a broad set of conclusions. Instead they draw some simple yet powerful lessons, and believe that small changes can have big effects. The authors conclude on the optimistic note that we are all part of the solution.

Website[edit]

A website was created to supplement the book, which includes:

  • Introductions to each chapter
  • Maps showing cited studies with links to original sources
  • Links to referenced researchers
  • Data and figures used with interactive data tools
  • A "What Can You Do" page with links to major organizations working in the field or for the problem discussed in the chapter

Authors[edit]

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] He has been featured in Foreign Policy's Top 100 Global Thinkers in 2011.[7]

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).[8] Duflo has received numerous academic honors and prizes, including most recently the John Bates Clark Medal (2010)[9] and a MacArthur Fellowship (2009).[10] She has also been featured in Foreign Policy's Top 100 Global Thinkers [7][11] and Fortune 40 under 40.[12]

Reception[edit]

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.”[citation needed]

Madeleine Bunting reviewed the book for the The Guardian, writing:

“[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.”[13]

Nicholas Kristof reviewed the book for The New York Times, writing:

“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?”[14]

Development economist William Easterly reviewed the book for the Wall Street Journal, writing:

“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.”[15]

James Tooley reviewed the parts of the book about education for Econ Journal Watch. Although he was critical of the authors' conclusions in those chapters, he generally praised their overall approach:

Poor Economics "is contextualised with stories of the realities of lives of the poor, with evidence adduced to support or dismiss particular policy proposals. All of the chapters are interesting and challenging...I favour much of their general approach. Experts, I agree, should have to "step out of the office" and get their boots muddy. I'm also in favour of "relying on evidence", and of being judicious, even cautious, with big ideas."[16]

Poor Economics won the 2011 Financial Times and Goldman Sachs Business Book of the Year Award.[1]

Editions[edit]

  • Poor Economics: Rethinking Poverty And The Ways To End It, Random House India (25 May 2011). ISBN 978-81-8400-181-5 - India edition hardcover.
  • Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, PublicAffairs (April 26, 2011). ISBN 978-1-58648-798-0 - Foreign edition hardcover.
  • Electronic and paperback editions.

References[edit]

  1. ^ a b Andrew Hill. "‘Poor Economics’ takes business book prize", Financial Times, 3 Nov 2011.
  2. ^ "Abhijit Banerjee". The Abdul Latif Jameel Poverty Action Lab. Retrieved 18 April 2012. 
  3. ^ "Academy Members (1780-present), Chapter B". American Academy of Arts and Sciences. p. 6. Retrieved 18 April 2012. 
  4. ^ "Fellows of the Econometric Society". The Econometric Society. Retrieved 18 April 2012. 
  5. ^ "All Fellows". The John Simon Guggenheim Memorial Foundation. Retrieved 18 April 2012. 
  6. ^ "Laureates - Infosys Prize 2009". Infosys Science Foundation. Retrieved 18 April 2012. 
  7. ^ a b "The FP Top Global Thinkers". Foreign Policy. December 2011. Retrieved 18 April 2012. "Foreign Policy presents a unique portrait of 2011's global marketplace of ideas and the thinkers who make them." 
  8. ^ "Esther Duflo". The Abdul Latif Jameel Poverty Action Lab. Retrieved 18 April 2012. 
  9. ^ "John Bates Clark Medal". American Economic Association. Retrieved 18 April 2012. 
  10. ^ "Meet the 2009 MacArthur Fellows". MacArthur Foundation. Retrieved 18 April 2012. 
  11. ^ "The FP Top 100 Global Thinkers". Foreign Policy. December 2010. Retrieved 18 April 2012. "Foreign Policy presents a unique portrait of 2010's global marketplace of ideas and the thinkers who make them." 
  12. ^ "40 under 40". CNN Money. p. 19. Retrieved 18 April 2012. 
  13. ^ Bunting, Madeleine (2011-04-11). "Duflo and Banerjee take the guesswork out of policies that help the poor: There is much to praise in Esther Duflo and Abhijit Banerjee's book that suggests new ways to fight global poverty. But their lack of understanding of how power works is a glaring omission". The Guardian. Retrieved 2013-09-21. 
  14. ^ Kristof, Nicholas (2011-05-18). "Getting Smart on Aid". New York Times. Retrieved 2013-09-21. 
  15. ^ Easterly, William (2011-04-30). "Measuring How and Why Aid Works—or Doesn't". Wall Street Journal. Retrieved 2013-09-21. 
  16. ^ Tooley, James. "Big Questions and Poor Economics: Banerjee and Duflo on Schooling in Developing Countries Econ Journal Watch 9(3): 170-185, September 2012.". 

External links[edit]