Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

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Overview

Billions of government dollars, and thousands of charitable organizations and NGOs, are dedicated to helping the world's poor. But much of their work is based on assumptions that are untested generalizations at best, harmful misperceptions at worst.

Abhijit Banerjee and Esther Duflo have pioneered the use of randomized control trials in development economics. Work based on these principles, supervised by the Poverty Action Lab, is being carried out in dozens of countries. Drawing 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. 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.

This important book illuminates how the poor live, and offers all of us an opportunity to think of a world beyond poverty.

Learn more at www.pooreconomics.com

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Editorial Reviews

Publishers Weekly
Banerjee (Making Aid Work) and Duflo (a contributor to Reinventing Foreign Aid), professors at MIT and founders of the university's Poverty Action Lab, offer answers to questions about aid: what it accomplishes, where it fails, which anti-poverty programs work and which do not, and why nine million children under the age of five die every year. Their results are often surprising, even counter-intuitive. For instance, many poorer families will concentrate their education dollars on the child they think most likely to succeed, sending that child (usually a boy) to school longer rather than spreading their education spending between all children, which might yield more in the long run. Banerjee and Duflo found evidence that relatively inexpensive improvements, such as water purification, may ultimately benefit a community more than, say, providing grain products. They also discovered that Kenyan abstinence programs encouraging school girls to marry older men resulted in an increase in HIV-AIDS, as older men are more likely to be HIV-positive. Their empirical approach differs from policy discussions that base support or criticism of aid programs on a broad overview; instead they illuminate many practicable and cost-effective ways to keep children and parents living healthier and more productive lives. An important perspective on fighting poverty. (Apr.)
Kirkus Reviews

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.

From the Publisher
“A refreshingly original take on development.”
The Guardian

“In an engrossing new book they draw on some intrepid research and a store of personal anecdotes to illuminate the lives of the 865m people who, at the last count, live on less than $0.99 a day.”
The Economist

“[Poor Economics] provides an inspirational audio recommended for any economics or nonfiction audio library.”
Midwest Book Review

“Narrator Brian Holsopple’s nicely paced, steady reading conveys world poverty in a unique manner and is highly recommended for all university libraries.”
Library Journal [starred review]

Midwest Book Review
“[Poor Economics] provides an inspirational audio recommended for any economics or nonfiction audio library.”
Midwest Book Review
Library Bookwatch
“A smart, engaging investigation of global poverty and why we’re failing to eliminate.”
Kirkus Review
Forbes.com
“Compelling and important. . . . An honest . . . account about the poor that stands a chance of actually yielding results.”
Forbes.com
The New York Times
“Excellent. . . . Move[s] the debate to the crucial question: What kind of aid works best?”
The New York Times
Wall Street Journal
“Compelling and important. . . . An honest . . . account about the poor that stands a chance of actually yielding results.”
Forbes.com
Financial Times
“Excellent. . . . Move[s] the debate to the crucial question: What kind of aid works best?”
The New York Times
Cleveland Plain Dealer
“Marvelous, rewarding. . . . The sheer detail and warm sympathy on display reflects a true appreciation of the challenges their subjects face. . . . They have fought to establish a beachhead of honesty and rigor about evidence, evaluation and complexity in an aid world that would prefer to stick to glossy brochures and celebrity photo-ops.”
The Wall Street Journal
Financial World (UK)
“It is the rich and humane portrayal of the lives of the very poor that most impresses.”
Financial Times
Fast Company
“Gloriously instructive.”
Cleveland Plain Dealer
The Guardian
“Reads like a version of Freakonomics for the poor.”
Fast Company
The Economist
“In an engrossing new book they draw on some intrepid research and a store of personal anecdotes to illuminate the lives of the 865m people who, at the last count, live on less than $0.99 a day.”
The Economist
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Product Details

  • ISBN-13: 9781586487980
  • Publisher: PublicAffairs
  • Publication date: 4/26/2011
  • Pages: 320
  • Product dimensions: 9.32 (w) x 6.44 (h) x 0.40 (d)

Meet the Author

Abhijit Vinayak Banerjee was educated in Kolkata, Delhi and Cambridge, MA. He is currently the Ford Foundation International Professor of Economics at MIT. He is the recipient of many honors and awards, including most recently the inaugural Infosys Prize in 2009, and has been an honorary advisor to many organizations including the World Bank and the Government of India.

Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT. She studied at the Ecole Normale Superieure in Paris, and at MIT. She is a recipient of several important awards, including a MacArthur "genius" award (2009) and the John Bates Clark medal awarded annually to the best American economist under forty (2010). In 2003, Banerjee and Duflo co-founded the Abdul Latif Jameel Poverty Action Lab (J-PAL), which they continue to direct.

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Table of Contents

Foreword vii

1 Think Again, Again 1

Part I Private Lives

2 A Billion Hungry People? 19

3 Low-Hanging Fruit for Better (Global) Health? 41

4 Top of the Class 71

5 PakSudarno's Big Family 103

Part II Institutions

6 Barefoot Hedge-Fund Managers 133

7 The Men from Kabul and the Eunuchs of India: The (Not So) Simple Economics of Lending to the Poor 157

8 Saving Brick by Brick 183

9 Reluctant Entrepreneurs 205

10 Policies, Politics 235

In Place of a Sweeping Conclusion 267

Acknowledgments 275

Notes 277

Index 295

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Sort by: Showing 1 Customer Reviews
  • Posted April 14, 2012

    more from this reviewer

    After decades of effort, billions of dollars, thousands of aid w

    After decades of effort, billions of dollars, thousands of aid workers and hundreds of antipoverty programs, 865 million people still barely survive on the equivalent of less than a dollar a day. But that can change, one small clinic, one incentive and one schoolroom at a time according to this eye-opening work – The Financial Times/Goldman Sachs’ business book of the year for 2011. Authors and MIT economic researchers Abhijit V. Banerjee and Esther Duflo report field-tested experiments showing that lifting the world’s poor into a more comfortable, productive life is possible, mostly with relatively simple changes, not masses of money. They call for understanding the human behaviors and motivations that drive all people, rich and poor alike, and apply that understanding to solving the seemingly overwhelming, intractable problem of global poverty. getAbstract strongly recommends this highly accessible yet scientific account of how to make life better for millions of people, while enabling the poor to contribute to the world’s economic and social progress.

    1 out of 1 people found this review helpful.

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