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Poor Economics
Book

Poor Economics

A Radical Rethinking of the Way to Fight Global Poverty

Abhijit V. Banerjee and Esther Duflo
Public Affairs, 2011
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Editorial Rating

9

Qualities

  • Innovative

Recommendation

After decades of effort, billions of dollars, thousands of aid workers and hundreds of antipoverty programs, 865 million people still barely survive on the equivalent of less than a dollar a day. But that can change, one small clinic, one incentive and one schoolroom at a time according to this eye-opening work – The Financial Times/Goldman Sachs’ business book of the year for 2011. Authors and MIT economic researchers Abhijit V. Banerjee and Esther Duflo report field-tested experiments showing that lifting the world’s poor into a more comfortable, productive life is possible, mostly with relatively simple changes, not masses of money. They call for understanding the human behaviors and motivations that drive all people, rich and poor alike, and apply that understanding to solving the seemingly overwhelming, intractable problem of global poverty. getAbstract strongly recommends this highly accessible yet scientific account of how to make life better for millions of people, while enabling the poor to contribute to the world’s economic and social progress.

Summary

“99 Cents Per Day”

The problem of global poverty appears both overwhelming and intractable. Despite massive amounts of foreign and domestic aid, enough food production to feed everyone on the planet, and medical and technical advances that can save lives and advance some populations from starvation to survival, still about 13% of the globe’s inhabitants must try to survive on the equivalent of 99 US cents a day. At this subsistence level, poor people cannot break out of the cycle of poverty. They do not have access to knowledge that can mean the difference between life and death, such as information about vaccines and clean water. The facilities and institutions people in affluent nations take for granted, like banks and insurance, don’t exist for the 865 million “world’s poorest” people.

Research on reducing global poverty shows that, despite vast disadvantages, “the poor are just like the rest of us in almost every way.” They share the same hopes and frailties and are just as sensible. Studies using “randomized controlled trials” (RCTs) – field experiments that test ideas and analyze actual results – indicate that sometimes a seemingly minor thing, like a well-placed...

About the Authors

Abhijit V. Banerjee and Esther Duflo teach economics at the Massachusetts Institute of Technology and direct the Abdul Latif Jameel Poverty Action Lab, which is dedicated to lessening poverty through research-based efforts.

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