Abhijit Banerjee and Esther Duflo have worked in India to improve benefit delivery of welfare programmes
GN Bureau | October 14, 2019
The Nobel Prize in economics for 2019 goes to Abhijit Banerjee, Esther Duflo and Michael Kremer "for their experimental approach to alleviating global poverty."
The prize, known as “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”, was announced by the Nobel Foundation on Monday. Banerjee becomes the second Indian to win the economics prize, after fellow Bengali Amartya Sen.
Banerjee and Duflo teach at MIT, USA, while Kremer is with Harvard University.
The research conducted by this year’s Laureates has considerably improved our ability to fight global poverty, the Foundation said in a press release. “In just two decades, their new experiment-based approach has transformed development economics, which is now a flourishing field of research.”
Despite recent dramatic improvements, one of humanity’s most urgent issues is the reduction of global poverty, in all its forms. More than 700 million people still subsist on extremely low incomes. Every year, around five million children under the age of five still die of diseases that could often have been prevented or cured with inexpensive treatments. Half of the world’s children still leave school without basic literacy and numeracy skills.
This year’s Laureates have introduced a new approach to obtaining reliable answers about the best ways to fight global poverty. In brief, it involves dividing this issue into smaller, more manageable, questions – for example, the most effective interventions for improving educational outcomes or child health. They have shown that these smaller, more precise, questions are often best answered via carefully designed experiments among the people who are most affected.
In the mid-1990s, Kremer and his colleagues demonstrated how powerful this approach can be, using field experiments to test a range of interventions that could improve school results in western Kenya.
Banerjee and Duflo, often with Kremer, soon performed similar studies of other issues and in other countries. Their experimental research methods now entirely dominate development economics.
The Laureates’ research findings – and those of the researchers following in their footsteps – have dramatically improved our ability to fight poverty in practice. As a direct result of one of their studies, more than five million Indian children have benefitted from effective programmes of remedial tutoring in schools. Another example is the heavy subsidies for preventive healthcare that have been introduced in many countries.
These are just two examples of how this new research has already helped to alleviate global poverty. It also has great potential to further improve the lives of the worst-off people around the world.
Banerjee and Duflo wrote about their work in ‘Poor Economics’ (Random House, 2011) and their next work, ‘Good Economics for Hard Times’ (Juggernaut) is coming out later this month. Earlier this year, Banerjee teamed up with other economists to produce a blueprint for Indian economy, ‘What the Economy Needs Now’ (Juggernaut). Governance Now reviewed it:
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