Professional Documents
Culture Documents
e of the analysis and conclusions in our report on development. At the same time
, we need to look beyond the numbers and understand the everyday challenges face
d by the world s poorest people. The book Poor Economics is very helpful, because
it is both empirically rigorous and insightful about the realities that the data
doesn t always capture.
Poor Economics is by two MIT economists, Abhijit Vinayak Banerjee and Esther Duf
lo. Their life s work is traveling to poor countries, looking closely at what wor
ks and what doesn t work in efforts to fight hunger and disease, improve education
, and broaden access to basic financial services. The authors are directors of J
-PAL, an MIT poverty action lab that s a network of 59 professors around the world
who use scientific methods to answer critical questions about alleviating pover
ty.
To me, what s really great about J-PAL is that it s producing scientific evidence th
at can help make our anti-poverty efforts more effective. This is tremendously i
mportant. The money that governments invest in development is saving millions of
lives, and improving hundreds of millions. But to sustain support for these eff
orts, we need to rigorously assess the cost-effectiveness and overall impact of
aid, and make continuous improvements.
J-PAL conducts randomized evaluations of different approaches to achieving a par
ticular objective, such as reducing malnutrition. For example, researchers try d
ifferent ways of distributing food aid in similar villages, observe what happens
, and compare the results. They ve repeatedly found that outside of situations whe
re there s actual famine, just handing out food
no matter how nutritious doesn t nec
essarily improve nutrition. Sometimes people just cut back on their own food pur
chases and use that money for something else they need or want, even though cons
uming more calories could increase their productivity.
Although this may seem strange to us, J-PAL probes deeper to find out why people
do what they do. In some instances, they may be in a situation where consuming
more calories to work harder will not raise their incomes much or at all. And th
ey may have other, urgent expenses, such as for health care.
Poor Economics does a great job of bringing alive the complexities of poor peopl
e s lives. It explores the tough, difficult decisions they must make
often based o
n very little information and with no room for error about things that most of u
s take for granted, like access to enough food, clean water or vaccinations.
Poor Economics focuses on the specific results and unintended consequences of an
ti-poverty projects, and in doing so, it reveals some smart strategies for achie
ving positive results. In some situations, for instance, limited aid may go fart
her if it is directed toward specific groups of people. One example mentioned in
the book is delivering food aid and nutrition information to pregnant women and
to children whose development can be permanently stunted by malnutrition.
Related to food aid, one of the win-win strategies we re using at the foundation is
helping poor farmers sell their produce to aid programs in their own and neighbo
ring countries. That way, the aid programs can fight hunger and help raise the i
ncomes of local farmers at the same time.
Poor Economics also is very good in spotlighting how small tweaks can sometimes
turn failing interventions into effective ones. As I ve learned, this often involv
es identifying and removing unintended barriers that prevent people from getting
vaccinated, say, or using bed nets to prevent malaria. Given the challenges tha
t poor people face in their daily lives, we need to make it as easy as possible
for them to get the help they need.
For example, Rajasthan, India, had for a long time suffered from very low immuni
zation rates about 6%. This despite the government s providing the vaccines for fr
ee. Increasing the vaccination rate was a challenge walking to the clinics can b
e a hassle, and the clinics are unpredictably closed. To address these barriers,
mobile clinics were established to provide vaccines on site. The impact of thes
e mobile clinics was profound, with full vaccination rates jumping from 6% to mo
re than 18%. Building on this success, the program was further enhanced with an
incentive: a bag of lentils to all families vaccinated, which effectively double
d the rate again to 38%. Even with the incentive, the program was twice as cost
effective per patient as just the mobile clinics alone, since the clinic staff w
as much busier. More importantly, a much larger group of children was vaccinated
against polio, measles, DPT and tuberculosis
saving families from potential tra
gedy down the road and government from higher costs of sick care. You can read t
he J-PAL policy briefcase Incentives for Immunization to learn more about this stu
dy.
To be more effective, we also need a deeper understanding of people s values and c
ultures. I ve seen first-hand that local knowledge is critical. A couple of years
ago, I visited AIDS-prevention projects that our foundation has supported in Sou
th Africa. They were effectively reducing AIDS transmission from women to men by
persuading adult and teenaged men to be circumcised. As you can imagine, this w
as not an easy task, but with knowledge and respect, it can be done, and it can
save many lives.
With the authors experience on the ground and their willingness to go where the e
vidence leads, I found Poor Economics a refreshing change from the sometimes the
oretical and divisive debates that surround development aid. (An excellent compa
nion book I d also recommend is Getting Better: Why Global Development is Succeedi
ng.)
So, is development aid good or bad? A moral obligation or a waste of money? That
depends on how it s done, say Banerjee and Duflo. Financial resources are finite,
so let s figure out how to use them in ways that can have the most substantial im
pact.
-----------------------------------------------------------------------------------------------------------------------------------------------------------Despite the wonkiness of the discipline, the most famous academics in the field
of economic development, from Jeffrey Sachs to William Easterly, enjoy a public
status akin to rockstars, at least within the economics field. The authors of Po
or Economics: a radical rethinking of the way to fight global poverty, Abhijit B
anerjee and Esther Duflo, are certainly no exception, having racked up accolades
from MacArthur Genius Grants and Time profiles to TED talks. Banerjee and Duflo c
o-founded the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT, a network of
economics professors around the world who are known for their commitment to the
use of Randomized Evaluations (REs) to answer the big questions of the developmen
t economics field of what kind of aid interventions are the most effective, and
why. The terms sound decidedly un-sexy, and yet they represent nothing short of
a revolution in the way that academics and policymakers approach the problem of
global poverty. By using a scientific process that is modeled on the randomize
d trials that are used in medicine to evaluate the effectiveness of new drugs, w
ith control and variable groups to determine what kinds of interventions are eff
ective, Banerjee and Duflo hope to ensure that policy approaches are based on sc
ientific evidence for what works rather than the abstract economic models or wis
hful thinking that so often seem to guide policy.
Poor Economics is an exploration of J-PAL s Randomized Evaluations strategy. Writ
ten for a popular audience, the authors seek to sweep aside the broad generaliza
tions about global poverty that economic models tend to create. They use case st
udies and anecdotes from their work on the ground with NGOs and individuals livi
ng in poverty around the world, showing how their evaluation methods provide ins
ight into development and poverty alleviation best practices. The book is also a
ccompanied by a website that provides interactive maps and graphics for each cha
pter, as well as a list of affiliated NGOs that interested readers can get invol
ved with.
Banerjee and Duflo s system of Randomized Evaluations provides some fascinating-an
d surprising-conclusions. Perhaps the most interesting chapter in the book seeks
to explain why despite the existence of inexpensive health interventions like b
ed nets or vaccines, the poor don t often avail themselves of such low-hanging frui