- About the book
- Teaching the Book
- What you can do
"A marvellously insightful book by two outstanding researchers on the real nature of poverty."
—Amartya Sen, Lamont University Professor and Professor of Economics and Philosophy at Harvard University and winner of the Nobel Prize for Economics
“This book is a must-read for anyone who cares about world poverty. It has been years since I read a book that taught me so much. Poor Economics represents the best that economics has to offer.”
—Steven D. Levitt, William B. Ogden Distinguished Service Professor of Economics at the University of Chicago and author of Freakonomics
“Abhijit Banerjee and Esther Duflo are allergic to grand generalizations about the secret of economic development. Instead they appeal to many local observations and experiments to explore how poor people in poor countries actually cope with their poverty: what they know, what they seem (or don't seem) to want, what they expect of themselves and others, and how they make the choices that they can make. Apparently there are plenty of small but meaningful victories to be won, some through private and some through public action, that together could add up to a large gains for the world's poor, and might even start a ball rolling. I was fascinated and convinced.”
—Robert Solow, Institute Professor of Economics, Massachusetts Institute of Technology, and winner of the Nobel Prize for Economics
"Eschewing both grandiose solutions to global poverty and sweeping claims that aid cannot work, Banerjee and Duflo draw on their pioneering experiments at MIT’s Poverty Action Lab to show what actually does work—in areas including education, health, and governance. Their painstaking, cutting-edge research will allow policy makers to develop robust strategies to improve the lives of the world’s poorest people. "
—Paul Brest, President, William and Flora Hewlett Foundation
"Abhijit Banerjee and Esther Duflo have written an engrossing, deeply readable book, one that moves beyond simple analyses of poverty. It examines, in powerful detail, the challenges poor households face in escaping their condition. It takes on existing poverty mitigation efforts and puts them to test using real, empirical data. The book draws on the best poverty research to discover how successful anti-poverty efforts are, in the context of the real-life constraints and motivations of the poor, the choices they make, and perhaps most powerfully, what they aspire towards. The authors' unwavering attention on actual behaviour makes this an indispensible read. Poor Economics is an informed, challenging debate on poverty, which closely examines solutions that have made a real and positive difference. This is finally a hopeful book, one that retains its optimism and search for answers as it goes to the heart of what it truly means to be poor."
—Nandan Nilekani, Chairman of the Unique Identification Authority of India
"Highly decorated economists Banerjee and Duflo (Economics/Massachusetts Institute of Technology) relay 15 years of research into a smart, engaging investigation of global poverty—and why we're failing to eliminate it.
Aiming to change the stigma that revolves around poverty, the authors explore not just how many find themselves in economic quicksand, but why. They suggest that policymakers, economists and philanthropists alike fail to understand the unique problems that lead to poverty; as such, attempts to eradicate it are often misguided. The poor need more than food, the authors write; they need programs that empower them with a real, fighting chance. Through a blend of on-the-ground observations, social experiments and psychological analysis, Banerjee and Duflo showcase an expansive understanding of poverty's traps and its potential solutions. They extol the virtues of such practices as microsaving and microfinance, which cut out debilitating interest rates and predatory moneylenders. But even these solutions aren't without their issues, including lack of trust in the lender and an unwillingness to take risk. The authors advocate for increased access to family planning, as family size is often a leading cause for why many are saddled with financial burden. They also investigate why many forego free or low-cost medical care or education.
A refreshingly clear, well-structured argument against the standard approach to poverty, this book, while intended for academics and those working on the ground, should provide an essential wake-up call for any reader."
"Banerjee and Duflo’s research shows that, in defiance of free-market dictates, such an appeal to public-minded sympathy is far from fanciful. The two researchers run a lab at MIT funded by billionaires who share a curiously nonlibertarian outlook and staffed by economists who traverse the most impoverished corners of the world. The research team conducts laborious randomized trials to figure out how to incentivize the poor to wear condoms, take their tuberculosis meds, get their kids to school, and vaccinate their babies, among other actions that are both personally and socially beneficial. The lab’s efforts have breathed new life into the elaborate (if so far ineffective) existing network of philanthropic aid organizations. More profoundly, they have laid bare the inanity of the argument—most famously advanced by the libertarian Nobelist Milton Friedman—that the profit motive is inextricable from the solving of problems."
—Maureen Tkacik, Bookforum
“Poor Economics should appease some of [the authors] critics. It draws on a variety of evidence, not limiting itself to the results of randomised trials, as if they are the only route to truth. And the authors’ interest is not confined to “what works”, but also to how and why it works. Indeed, Ms Duflo and Mr Banerjee, perhaps more than some of their disciples, are able theorists as well as thoroughgoing empiricists.
They are fascinated by the way the poor think and make decisions. Poor people are not stupid, but they can be misinformed or overwhelmed by circumstance, struggling to do what even they recognise is in their best interests. The authors recount (with grudging admiration) how nurses in rural Rajasthan outwitted the two professors’ efforts to stop them skiving off work. They also describe how borrowers in south India exploited a contractual loophole to avoid taking out health insurance, which their microlender insisted they buy for their own good."
—The Economist, "Untying the knot"
"In their final five lessons, Duflo and Banerjee point out that the 'poor bear responsibility for too much of their lives' and at the same time their lives are more demanding: they are often running small businesses in very competitive markets or searching for work. They need those "nudges" even more than the rich do to help them make the right decisions... It's a wonderfully insightful and compassionate conclusion to a question that puzzles anyone in a developing country when they see something obviously dangerous that could be fixed: my sister, a midwife, was baffled by the piles of used needles she found in a hospital yard in Africa, and others jammed into mattresses, and she couldn't understand why someone hadn't disposed of them safely. But while we have safe disposal systems, many developing world hospitals don't.
There are other huge strengths to the book, like two evident throughout: patience and humility. Development is not a quick process and it's very complex so take it step by step, and constantly listen to what poor people tell you about their lives. It's a much-needed corrective to the breathless urgency of much misplaced aid, which swings from one fad to the next. Or as Duflo put it in an interview: 'First it was big dams, then education, then microcredit. And now we're back to dams.'"
—Madeleine Bunting, Poverty matters blog, The Guardian
"Called Poor Economics, and written by Abhijit Banerjee and EstherDuflo, both professors at MIT, it is the most interesting essay I have read in a long time. The book, soon to be published, is accessible to any reader. It is full of surprises, and will change our way of thinking about poverty and how to alleviate it."
—Moisés Naím, Read this book, El País
"Different is exactly the approach Esther Duflo and Abhijit Banerjee, economists and co-founders of the Abdul Latif Jameel Poverty Action Lab (J-PAL) at the Massachusetts Institute of Technology (MIT), take in Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Following fifteen years of research, their book is 'a journey into the incredibly multi-faceted and complex economic lives of the poor.' It is precisely this exploration into understanding the poor, rather than rendering a formula to end poverty that makes it a compelling and important read."
—Elmira Bayrasli, Forbes
"A welcome, and sobering, break from all the partisan rhetoric comes by way of “Poor Economics,” a new book that is the result of 15 years of research and control trials around the globe by two respected professors of economics at MIT. They examine the myriad effects of poverty on people and societies, upending much of the conventional wisdom held by governments, aid organizations and NGOs, perceptions which in turn drive the way they provide financial assistance and humanitarian aid."
—Christopher Schoppa, The Washington Post, Political Bestsellers
"[Poor Economics shows] how those in poverty make sophisticated calculations in the grimmest of circumstances. Even seemingly irrational decisions begin to make sense. This is a world in which desire for fun sees a television purchased rather than more nutritious food; where befuddlement delays investment in a sensible product to insure against drought; or the pressure of time prevents parents returning with their children to a free immunisation camp."
—James Crabtree, Financial Times
"The books' signal achievement is in addressing two disgraceful problems that beset humanitarian aid. The first is that the effectiveness of aid is often not evaluated at all; the second is that even when aid is evaluated, the methods are often dubious, such as before-and-after analysis that doesn't take into account variables that have nothing to do with the aid itself. Humanitarian aid is usually flying blind. These books take the blinders off—de-worming does work, many other efforts do not."
—William Easterly, The Wall Street Journal
"It’s a good book. It doesn’t really contain a radical rethinking of the way to fight global poverty, but it does try to cut past lame debates over whether or not foreign aid “works” to instead attempt to find ways to actually assess which programs are working, which aren’t, and how to improve those that don’t. The book is structured around a set of questions, which are answered with a mix of illustrative anecdotes and randomized control trials of different anti-poverty interventions."
—Matthew Yglesias, Think Progress
"'Their painstaking, cutting-edge research will allow policy makers to develop robust strategies to improve the lives of the world’s poorest people,' writes Paul Brest, president of the Hewlett Foundation, on the back cover. We couldn’t have put it better. It is a fascinating, at times depressing, but ultimately thoroughly inspiring read."
—Matthew Bishop and Michael Green, Philanthrocapitalism
"[Poor Economics] is from the doyennes of the new focus on measurement in general and randomized control trials (RCTs) in particular, Abhijit Banerjee and Esther Duflo from the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT. Given that provenance, I was half-expecting a fairly reductionist form of ‘if it can’t be measured, forget it’ thinking, but like many gurus, they are much more intelligent and nuanced than their followers. Their overall approach is Bottom of the Pyramid meets Freakonomics – ‘leave the large questions aside and focus on the lives and choices of poor people’ and why interventions by governments or NGOs do/don’t work."
—Duncan Green, From Poverty to Power
"Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, is making waves in development circles. Beyond the strong focus on randomised control trials, the book distinguishes itself by wading into issues on which the development community has often ignored or made uninformed guesses. These include the rationale behind the decisions made by the poor, whether they make the "best" decisions available, and how policymakers should respond."
—Rachel Godfrey Wood, Poverty Matters blog, The Guardian
"Books that make grandiose claims for themselves often disappoint – but this truly is a “radical rethinking” about global poverty. The authors, two acclaimed development economists, spent more than 15 years working with impoverished communities across five continents. The result is a remarkable work: incisive, scientific, compelling and very accessible, a must-read for advocates and opponents of international aid alike, for interested laymen and dedicated academics."
—Keyur Patel, Financial World