Gandhi’s oft-quoted talisman says: whenever in doubt, consider the case of the poorest person. The question is: how? India is a welfare state, it spends two percent of its GDP to fight poverty – a higher percentage than any other country in Asia and about three times China’s figure, according to a recent World Bank review, and yet the poor have become only poorer and their number has possibly grown. Obviously, something is missing. Means and resources are not a problem: there are committed political leaders and ethical capitalists; now how do we eradicate poverty? That is a question that many developing countries and international aid agencies have been trying to answer for decades. Abhijit V Banerjee and Esther Duflo’s new book, ‘Poor Economics: A radical rethinking of the way to fight global poverty’ (and the accompanying website: pooreconomics.com), is not yet another answer to that question but show the way to reframe the question itself. “This book is an invitation to think again, again: to turn away from the feeling that the fight against poverty is too overwhelming, and to start to think of the challenge as a set of concrete problems that, once properly identified, can be solved one at a time,” the authors say in the introduction. The book, which is winning rave reviews from experts and commentators ranging from Amartya Sen to Nandan Nilekani, argues that anti-poverty policies have 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 from evidence. For more than 15 years Banerjee, Ford Foundation internal professor of economics at MIT, and Duflo, Abdul Latif Jameel professor of poverty alleviation and development economics at MIT, have worked with the poor in dozens of countries in five continents to understand poverty beyond figures and theories. The book they have come up with is radical in its rethinking of the economics of poverty. Through a careful analysis of a rich body of evidence, including the hundreds of trials and experiments that Banerjee and Duflo’s lab has pioneered, the authors explain why the poor remains poor and why well-intentioned foreign aid and welfare-state programmes continue to fail. While the authors are leading names in poverty debates in the academia, the book is refreshingly engaging for non-specialist readers too. It is written as if readers mattered. Banerjee and Duflo have examined here some quite surprising facets of poverty: why the poor need to borrow in order to save, why they skip free life-saving immunisations but pay for drugs that they do not need, or why they start many businesses but do not grow any of them. The authors have eschewed grandstanding macroeconomic theorising and have preferred to offer practical, workable suggestions. ‘Poor Economics’ thus promises to be a vital guide to policy makers, civil society, philanthropists and just about any citizen concerned about the reality behind the headlines. The publication could not have been better timed, as inclusion is fast becoming the watchword. Poor Economics By Abhijit V Banerjee and Ester Duflo Random House, 303 pages, Rs 499