Finally, we’ll share four of the key insights Duflo and Banerjee offer based on this exploration.Īlong the way, we’ll note critiques of their approach, and we’ll share relevant updates on the current status of global poverty. Next, we’ll see what the authors discover when they apply this approach to two specific aspects of poverty: the private lives of the poor and the markets and institutions that affect the poor.

In this guide, we’ll explore the main aspects of Duflo and Banerjee’s approach to analyzing poverty, which includes asking small questions about the lives of the poor and gathering data to develop an understanding of those lives. Economists at MIT, they founded the Abdul Latif Jameel Poverty Action Lab (J-PAL) to build on these techniques, and in Poor Economics, they share their insights. Accordingly, their programs often result in few improvements to the lives of the impoverished.Įsther Duflo and Abhijit Banerjee approach the analysis of poverty differently: not by asking high-level, abstract questions, but by asking pointed questions exploring specific factors that affect the way the poor live. Development economists often try to design programs to alleviate this poverty by asking general questions and making unverified assumptions about the lives of the poor. This important book illuminates how the poor live, and offers all of us an opportunity to think of a world beyond poverty.1-Page Summary 1-Page Book Summary of Poor EconomicsĪs of 2005, 13% of the world’s population lived on less than 99 cents per day. Their work defies certain presumptions: that microfinance is a cure-all, that schooling equals learning, that poverty at the level of 99 cents a day is just a more extreme version of the experience any of us have when our income falls uncomfortably low.

Work based on these principles, supervised by the Poverty Action Lab, is being carried out in dozens of countries.ĭrawing on this and their 15 years of research from Chile to India, Kenya to Indonesia, they have identified wholly new aspects of the behavior of poor people, their needs, and the way that aid or financial investment can affect their lives. But much of their work is based on assumptions that are untested generalizations at best, harmful misperceptions at worst.Ībhijit Banerjee and Esther Duflo have pioneered the use of randomized control trials in development economics. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.īillions of government dollars, and thousands of charitable organizations and NGOs, are dedicated to helping the world’s poor.

Poor Economics by Abhijit V. Banerjee