Guest post by Girija Sankar, Director of Haiti Programs, Global Health Action.
Poverty Economics: A Radical Rethinking of the Way to fight Global Poverty - Abhijit Bannerjee & Esther Duflo, Public Affairs. 2011.
There has been much debate recently on the efficacy of foreign aid and whether international NGOs and developed countries ought to invest their tax dollars and grant funds in resource-poor countries. These are very controversial issues and much that has been written both in academic and popular publications.
This book is not about any of them.
Poverty Economics: A radical rethinking of the way to fight global poverty by Abhijit Banerjee and Esther Duflo looks at the question of micro-approaches to poverty eradication, i.e. small scale interventions through local policy making or small but significant technological changes. It avoids grand generalizations about “poor people” and tries to explain their challenges in context. It also points out how in many cases, the basic choices that the poor have to make are already made for the rich.
The authors are both professors, economists and the co-founders of the Poverty Action Lab at MIT. Through a number of field studies and using their favorite research method- Randomized Controlled Trials - the authors demonstrate that it is possible to have a significant and meaningful impact on the lives of the poor through context specific micro-changes. The book provides numeous examples from the fields of healthcare, education,micro-lending/saving, economic development and nutrition security, all in the context of the lives of people who make less than $1 per day.
The first part of the book focuses on the private lives of the poor and their approach to healthcare, education, and savings. The second part discusses the efforts of institutions - large and small - in impacting the poor in meaningful ways. Banerjee and Duflo also demonstrate how many big interventions fail because they often ignore or neglect local aspirations, cultures and contexts. The real value of this book is that in case after case, the authors provide tools and techniques for understanding the performance of various interventions that have been implemented. Mainly, they rely on creative problem solving in the local context and the use of rigorous statistical methods to evaluate how indicators such as school attendance or healthcare availability have improved as a result of a new approach to problem solving.
In short, this book is a must-read for development practitioners working in the field of poverty alleviation and seeking new ways of approaching program and policy impact.