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Abhijit Banerjee and Esther

Duflo: The Nobel couple
fighting poverty
Soutik Biswas
India correspondent

15 October 2019

Nobel Prize

AFP

Banerjee and Duflo won the Nobel Prize for their work on
alleviating global poverty

For the past two decades, the world's most-

feted economist couple has tried to
understand the lives of the poor, in "all their
complexity and richness". And how an
inadequate understanding of poverty had
blighted the battle against it.

On Monday, Abhijit Banerjee, 58, and Esther

Duflo, 46, won the Nobel Prize in Economics,
along with economist Michael Kremer, for their
"experimental approach to alleviating global
poverty". More than 700 million people live in
extreme poverty, according to World Bank.

Both Mr Banerjee and Ms Duflo are professors at

the Massachusetts Institute of Technology (MIT).
Ms Duflo is the second woman to be awarded a
Nobel in economics.

The Indian-born Mr Banerjee and Paris-born Ms

Duflo grew up in completely different worlds.

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Esther Duflo was six when she read in a comic

book on Mother Teresa that described Kolkata
(formerly Calcutta) as an overcrowded city where
each resident lived on a 10 sq ft space. At 24,
when she finally visited the city as a graduate
student at MIT, she instead found trees and empty
pavements and little signs of the misery depicted
in the comic book.

At six, Abhijit Banerjee knew exactly where the

poor lived - little shanties behind his home in
Kolkata. The children there seemed to have a lot
of time to play and would beat him at any sport,
leaving him jealous.

"This urge to reduce the poor to a set of clichés

has been with us for as long as there has been
poverty. The poor appear, in social theory, as
much as much in literature, by turns lazy or
enterprising, noble or thievish, angry or passive,
helpless or self-sufficient," Mr Banerjee and Ms
Duflo wrote in their seminal work, Poor
Economics, which examined the real nature of
poverty and how the poor reacted to incentives.

"It is no surprise that the policy stances that

correspond to these views of the poor also tend to
be captured in simple formulas: 'Free markets for
the poor', 'Make human rights substantial, 'Deal
with conflict first', 'Give more money to the
poorest', 'Foreign aid kills development' and the
like."

The problem, the couple said, was that the poor

get admired or pitied. They are also not
considered knowledgeable, and that there is
nothing interesting about their economic
existence.

AFP

Millions of Indians remain vulnerable to income shocks

"Unfortunately, this misunderstanding severely

undermines the fight against global poverty:
Simple problems beget simple solutions. The field
of anti-poverty policy is littered with the detritus of
instant miracles that proved less than miraculous."

The need was, they observed, "to stop reducing

the poor to cartoon characters and take the time to
really understand their lives, in all their complexity
and richness".

So the couple decided to begin work on the

world's poorest and how markets and institutions
work for them. In 2003, they founded the Abdul
Latif Jameel Poverty Action Lab (J-Pal) at MIT to
study poverty. (The two worked together for a long
time before getting married in 2015.)

Over the years, helped by field studies using

randomised trials in India and Africa, they tried to
make sense of what the poor are able to achieve
and where and for what reason they require a
nudge. Mr Banerjee says he and Ms Duflo have
been involved in about "70 to 80 experiments" in
any number of countries.

Inequality in India can be seen from outer

space

They looked at what the poor buy, what they do

about their children's health, how many children
they choose to have, why their children go to
school and yet not learn much and why
microfinance is useful without being a miracle that
some people make it out to be. Or whether the
poor were eating well, and eating enough.

Some of their work on how the poor consume food

is fascinating. They questioned assumptions like
the poor eat as much as they can. Using an 18-
country data set on the lives of the poor, the
economists found that food represented 36-70%
of the consumption of the extremely poor living in
rural areas and 53-74% among their urban
counterparts. Also that when they did spend on
food, they spent in on "better-tasting, more
expensive calories" than micronutrients.

REUTERS

Banerjee grew up in Kolkata and co-authored his book,

Poor Economics, with Duflo

Nutrition is a conundrum in developing countries.

The couple argue that things that make life less
boring are a priority for the poor - a TV set,
something special to eat, for example. In one
location in the northern Indian state of Rajasthan,
where almost no one had a TV, they found the
extremely poor spent 14% of their budget on
festivals. By contrast, in Nicaragua, where 56% of
the poor households in villages had a radio and
21% owned a TV, very few households reported
spending anything on festivals.

Their work also suggested governments and

international institutions need to completely rethink
food policy. Providing more food grains- which
most food security programmes do - would often
not work and help little for the poor to eat better
because the main problem was not calories, but
other nutrients.

Who are the poor in India?

"It is probably not enough just to provide the poor

with more money, and even rising incomes may
not lead to better nutrition in the short run. As we
saw in India, the poor do not eat any more or any
better when their income goes up; there are too
many pressures and desires competing with food,"
they observed.

One of their more interesting experiments was

trying to understand the poor learning outcomes of
children in schools in the developing world.

"We ran experiments where you change a bunch

of inputs, like changing the way the teaching
happens or change the books or change the
timing. And it turns out that what's really critical is
that the kids should have some time when they
can catch up with the material they have missed,
something that is excluded from most school
systems in the developing world."

The couple believe there are no magic bullets to

end poverty. Instead, there are a number of things
which could help improve their lives: a simple
piece of information can make a big difference
(what is the easiest way to get infected with HIV);
doing the right thing based on what we know
(cheap salt fortified with iron and iodine); and
helpful innovations (microcredit or electronic
money transfers using mobile phones).

They hold out hope that "poor countries are not

doomed to failure because they are poor, or
because they have had an unfortunate history".
What often needs to be fought, they say, is
"ignorance, ideology and inertia".

Read more from Soutik Biswas

The hunger-striking Indians demanding US

asylum

Kashmir: The complicated truth behind its

'normality'

How to read India's threat to Pakistan

How Britain's opium trade impoverished

Indians

Why people are more honest than we think

Follow Soutik on Twitter at @soutikBBC

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