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108 of 113 people found the following review helpful:
5.0 out of 5 stars A Remarkably Informative Book.
Although I am an economist by training and have studied economics for many years, I admit that in reading this book I have learned a great deal about the complexities of both the theory and the practice of anti-poverty policies in developing nations.

Why are people so interested in the issue of global poverty? Well, to list a few of the many aspects about...
Published 10 months ago by AdamSmythe

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70 of 97 people found the following review helpful:
2.0 out of 5 stars Interesting but flawed
The authors offer a classification of aid philosophies: _supply wallahs_ and _demand wallahs_. The _supply wallahs_ believe that the poverty is caused by the lack of the goods that are needed to escape poverty. What are these goods? The authors offer the following list: food, health, education, contraception, insurance, banks and entrepreneurship. They devote one chapter...
Published 9 months ago by R.S.Sundaresh


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108 of 113 people found the following review helpful:
5.0 out of 5 stars A Remarkably Informative Book., April 15, 2011
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
Although I am an economist by training and have studied economics for many years, I admit that in reading this book I have learned a great deal about the complexities of both the theory and the practice of anti-poverty policies in developing nations.

Why are people so interested in the issue of global poverty? Well, to list a few of the many aspects about poverty addressed in this book, every year about 9 million children die before they reach their fifth birthday, usually in the poorest countries. In the developed world, a woman has a one-in-5,000 chance of dying while giving birth, but in many sub-Saharan Africa countries the odds are one-in-30. There are at least 25 countries in the world with life expectancies of 55 years or less. If these sorts of situations capture your mind and lead it to ask what can be done, one of the first things you might consider doing is learning more about the conditions and circumstances that lead to these revealing statistics. That's where this book comes in.

So, is this book one you should buy? Presumably that's why you are reading this. Here are a few observations that may help you decide whether to buy this fine book: In the authors' own words, the book "is ultimately about what the lives and choices of the poor tell us about how to fight global poverty." That may not sound too sexy or exciting, but if you have an interest in facts, theories and observations about global poverty, then this is your book. On the other hand, if what you seek are simple theories and, especially, strong advocacy of a few preferred solutions, then you are probably barking up the wrong tree. Don't get me wrong; I like the book just as it is. There is so much information to consider and so many approaches to fighting poverty to contemplate. Just don't expect the authors to take a lot of your time championing pet solutions. Because the problem of poverty is itself rather complex, so are some of its solutions. Jack Webb (the "just the facts, ma'am" star of the "Dragnet" series) might have loved this fact-filled book. At least, he'd love it if he was an economist or someone interested in learning (a lot) about global poverty. Yet there's much more to the book that mere facts. Primarily, there is a pursuit of understanding the circumstances associated with poverty and the efforts to overcome it. That's where this book excels.

It's certainly early to judge, but this book could prove to be a classic in its field. It successfully challenges and encourages the reader to think in new ways about anti-poverty initiatives. Although its authors are probably unknown to the general public, they are well regarded in economics. They both have received a number of prestigious awards, including the John Bates Clark Medal (to Esther Duflo) for the best American economist under age 40. Previous winners of this award include a Who's Who of economists, such as Paul Samuelson, Milton Friedman, James Tobin, Kenneth Arrow, Gary Becker, Martin Feldstein, Lawrence Summers and Steven Levitt.

In short, this is a substantial book with a great deal of important content. There are some graphs, but less than you might expect from two economists. Importantly, it is readable and understandable by the interested lay reader. Frankly, I think it's a book you won't forget. If the issues of global poverty and economic development interest you, this is a book well worth your careful consideration.
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28 of 30 people found the following review helpful:
5.0 out of 5 stars Refreshing and Powerful Vision of Anti-Poverty Policy, July 13, 2011
By 
Herbert Gintis (Northampton, MA USA) - See all my reviews
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
The authors identify three major approaches to dealing with world poverty, suggest that whatever their virtues and faults, there is a very piecemeal and pragmatic approach through which significant gains can be made without addressing the systemic obstacles identified by the three approaches. Their analysis is brilliant, focused, rooted in first-rate data sets, yet rich in social detail and anecdotal vignettes. I believe there are probably right, and their approach deserves to be widely studied an evaluated by policy makers in the advanced and developing countries.

The dominant school of thought is probably the supply-side theory, most visibly represented by Jeffrey Sachs (the authors call him a "supply wallah"). According to this theory, the poor are poor because they lack money and resources, and there is a "poverty trap" such that investment in productive technologies must be very large in order to have a positive and sustainable effect. Because poor individuals, and even poor countries, lack the capacity to finance such investments, they are trapped in a low-level economic equilibrium. For this reason, Sachs and the supply theorists advise that the rich countries transfer a large lump-sum amount of money to a poor country, so it can get over the poverty-trap hump.

A second salient school of thought is the demand-side theory, represented by William Easterly and many others. Demand-siders (the authors call them "demand wallahs") believes that the poor are poor because they do not want to undertake what would be necessary to move out of poverty and there is no poverty trap. Thus, if you throw money and resources to the poor, they consume it immediately rather than using it for long-term betterment.

The third school of thought is the corruption school, represented by Acemoglu and Robinson, as expounded in the book Why Nations Fail. According to this theory, countries remain poor because their governments are predatory, exploiting the citizenry by refusing to make investments in productive infrastructure, by direction all profits to cronies, and by permitting rampant corruption that renders creative entrepreneurship unprofitable. According to this school, to which I admit to being very favorable, the supply wallahs are wrong because the resources throw into the system will be appropriate by the rich and powerful, and the demand wallahs are wrong because the poor are actively maintained by the oligarchy in their position of servitude.

The authors are very insightful and balanced in presenting the views of these three schools and the evidence that supports these various positions. They also clearly explain their mutual critiques. For instance, the supply wallahs claim that states are predatory and corruption is rampant only because the country is so poor, and the demand wallahs claim that when the people want to move out of poverty, they will reform their governments. I find these defenses of supply and demand wallahs rather tendentious, leaving the corruptions school as the overall most plausible school.

I think it is fair to say that Banerjee and Duflo have little sympathy for demand and supply wallahs, but considerable respect for the corruption theory. Their own position is that there are virtually always ways to productively intervene to pull a significant fraction of people out of poverty. The authors, who have collected huge amounts of data and interviewed many poor people from around the world, make the following argument.

Most important, the poor in a poor country have about the same array of preferences and capacities as that of the human population as a whole, and humans are substantively rational in making decisions that affect their lives. However, the poor have a lot fewer resources than the well-off, they lack information and skills provided to the well-off, and lack access to such public goods as clean water and consumables subject to food and drug regulations.

The poor are therefore extremely heterogeneous. Microfinance organizations like the Grameen Bank therefore provide a general path to affluences, simply because only a fraction of the population has the will and ability to be successful entrepreneurs. On the other hand, entrepreneurs often fail several times before finally becoming successful, so the authors advise an expanded microfinance industry that is more tolerant of the sorts of behaviors that may involve short-term losses, but lead to long-run successes. The authors conclude that we must consider microfinance policies as extremely successful and worthy of following, even though it is not panacea for the abolition of poverty.

Because the poor lack access to social services freely available to the non-poor, the authors advocate such measures as providing clean water to poor villages and adding nutrients, such as iron, to staple foods. This, they argue, is not charity but simply the extension to poor of services already supplied to the rest of society.

Concerning education, the authors believe that poor parents are usually very eager to have their children educated, although they may lack the means of enrolling their children in schools or providing for their transportation to and from school. However, too often the content of schooling is determined by what is good for the more affluent classes, so poor children are led voluntarily to quit school. The authors advise that the content of education take into account the preferences and culture of the target population.

I cannot do justice to the beauty and intricacy of the argument developed in this book. The authors' main point is that we must look closely at the details of the lives of the poor in order to develop policies to help people to pull themselves out of poverty. This is neither demand or supply wallah-ism, and as they repeatedly stress, real progress can be made even in a society whose government provides a poor environment for economic development.
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19 of 22 people found the following review helpful:
5.0 out of 5 stars The tools to make change, April 27, 2011
This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
Poor Economics is an excellent survey of empirical data on the world's most impoverished areas. The amount of work put into the studies (the authors have extensive work in their own control studies) is astounding, and well worth a look for anyone interested in the data.

The general picture one hopes when reading a book like this is a "silver bullet" that will solve the problems of every kind of poor people around the world. As the authors are quite upfront in saying, this is not realistic. Economies are complex and work in strange ways. Anyone familiar with systems dynamics will recognize the traps that "silver bullet" theories get into: one quick fix leads to some improvement, but causes side effects that might make matters worse in the long run.

This book examines how the predominant theories on poverty have played out. They cite Jeffrey Sachs' The End of Poverty, in which the idea is that aid will bring an end to a "poverty trap". And then regard William Easterly's The White Man's Burden, in which the idea is that aid tends to make people dependent on it and thus makes them less capable. With these plausible arguments as a backdrop, they delve into the examples and case studies to identify instances where one or both or neither are true.

Ultimately, the argument that is made is for a comprehensive understanding of the way poverty works in order to apply proper levels and composition of aid. Though, this isn't a grand theoretical survey of the way economies and systems in general function. I would recommend something like Juggernaut: Why the System Crushes the Only People Who Can Save It for that. It is still a penetrating survey of poverty and offers the reader the tools to do something about it.
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10 of 11 people found the following review helpful:
5.0 out of 5 stars Taking Economics Out of the Ivory Tower and To the Village, June 2, 2011
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
It used to be that anthropologists would go down to villages and mingle with the people while economists would sit in their armchairs and design grand theories. Now it is the other way around. Anthropology has become an ivory tower discipline, with less and less emphasis on fieldwork and an impulse to produce ever more complex intellectual systems. Anthropologists are actively involved in campus politics, along with other cultural studies and postmodern theorists, and totally disengaged from real policy decisions. Meanwhile, economists are going to the field, not only to observe and measure, but also to make things happen. Poor Economics explores the new and exciting frontiers of development economics, by two young scholars who have greatly contributed to taking the discipline out of the ivory tower and to the village.

In doing so, they are following a long tradition of economists interested in development issues. Their elders, from James Meade to Gunnar Myrdal, used to go and see things for themselves before advising governments of newly independent countries or managers of international organizations on the best way to kick-start development. There was a time when the anthropologist would take the economist to the village. Multidisciplinary projects would gather economists along with anthropologists and other social scientists to study a particular location from various angles. Clifford Geertz, one of the towering figures of modern anthropology, participated in such joint initiatives, and the perspective from his fellow economists enriched his earlier writings--before he turned to a more interpretive approach of cultures and launched attacks against what he labeled "economism".

The difference between then and now is that the economist no longer needs to partner with the anthropologist in order to collect data and frame her observations in the village. She has two new allies she didn't have at the time: the NGO activist and the computer. The first helps her design development programs and collect the data to find out what works, what doesn't and why. The second will allow her to analyze that data with scientific rigor. She will be able to test hypotheses and to ask in particular what would have happened in the absence of the program or to measure how much difference it made. The result has been a revolution in development economics, identified with field experiments and randomized control trials--hence the label sometimes used to designate its promoters, the `randomistas'.

Has the economist kicked the anthropologist out of the village? Maybe this is simply a matter of labeling. Anthropologists could come up with their own random field experiments, with different research questions that would certainly yield different answers. They could bring a different sensitivity to the field: a focus on culture as a system of symbols, an understanding of power dynamics, and a questioning of the observer's role--what social scientists call "reflexivity", that remains utterly lacking in most economists' work. Indeed, political scientists are beginning to follow the footsteps of the randomistas and apply the same methods, investigating issues such as consumption of public goods or corruption with innovative research designs. Nothing should prevent anthropologists to do the same, except perhaps the "not invented here" syndrome and an aversion to numbers shared by many adepts of "qualitative" approaches.

One could even argue whether the kind of research conducted by the two authors of Poor Economics is really economics. It just happens that they work in an economics department. But they do their own stuff, undaunted by academic categories and intellectual boundaries. When they find something interesting in anthropology, they pick it, as when Esther Duflo uses the work of French anthropologist Claude Meillassoux, who showed that yams, a "male" crop in Côte d'Ivoire, can only be sold to pay for school fees or medical care for the family, but not to buy liquor or some tobacco. The authors also use the latest results in brain science--although this is not the part of the book that I find the most convincing. They have publications in medical journals, not just economics reviews. Whereas anthropologists are busy patrolling the borders of their discipline, denouncing the encroachment of "economism", the economists are busy pushing the envelope of their discipline, claiming new terrain along the way. Their "can-do" attitude puts them at the heart of policy debates, and the impact of their evaluations is now heavily felt in poverty alleviation programs around the world.

Randomistas have sometimes been accused of "soft paternalism", a critique they share with other promoters of "nudges" who use incentives to improve individual decisions about health, wealth, and happiness. Banerjee and Duflo have a ready answer to that critique: "It is easy, too easy, to sermonize about the dangers of paternalism and the need to take responsibility for our own lives, from the comfort of our couch in our safe and sanitary home. Aren't we, those who live in the rich world, the constant beneficiaries of a paternalism now so thoroughly embedded into the system that we hardly notice it?" Here the field economist talks back to the armchair theorist and brings a sense of perspective to debates about poverty, without lapsing into moral posturing or ideological arguments.

"How can you work with corrupt governments and ruling oligarchies," goes another critique. Banerjee and Duflo can answer to that as well. Most of their work is conducted in democratic countries, such as India, Kenya, or Indonesia. They tend to partner with local NGOs and social activists, more than with state bureaucracies or international agencies. In addition, they show that innovative program designs and rigorous evaluations can help keep corruption and inefficiency at bay. Denouncing bad governance and labeling country leaders as crooks makes an armchair theorist feel good, but does not lead very far. For the authors, the important lesson is to take advantage of whatever slack there is: "Good policies (sometimes) happen in bad political environments. And, perhaps more important, bad policies (often) happen in quite good ones." To quote the Book of Revelation: "He that is righteous, let him be righteous still." Poor Economics is an invitation to be smart, not an empty jeremiad or a feel-good sermon.

I am sure that readers trained in anthropology could raise many other critiques and show the limitations in their economic colleagues' work. Indeed, they should be invited to pick up the gauntlet, and rise to the challenge. The important point is that they should do it from a grounded perspective--by going back to the village, the slum or the policy council, and try to make things happen as well.
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70 of 97 people found the following review helpful:
2.0 out of 5 stars Interesting but flawed, May 8, 2011
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The authors offer a classification of aid philosophies: _supply wallahs_ and _demand wallahs_. The _supply wallahs_ believe that the poverty is caused by the lack of the goods that are needed to escape poverty. What are these goods? The authors offer the following list: food, health, education, contraception, insurance, banks and entrepreneurship. They devote one chapter to each of these topics. The _demand wallahs_ point to the long string of failed aid projects and claim that what is missing is a demand for these products. For reasons known only to those making the choices. _Demand wallahs_ are skeptical of any top down intervention.

Jeff Sachs is the best known _supply wallahs_. He has argued that small cheap interventions like free mosquito nets can have huge benefits. William Easterly is the best known _demand wallah_. He is a trenchant critic of top down interventions. The book criticizes both of these philosophies. They chide the _supply wallahs_ for not scientifically evaluating potential aid strategies. The author's evaluation tool of choice is the _Randomized Control Trial_ (RCT) (akin to the technique used to evaluate new drugs). They disagree with the _demand wallahs_ by pointing to successful aid strategies (success as measured by RCTs). The authors take the stance: We have no overarching theory of what aid strategy is likely to work. But we will evaluate individual strategies rigorously. And recommend whatever works.

The chapters all follow a pattern: First the authors present a puzzle (e.g. why don't the poor eat more when they earn more?). Then they (half-heartedly) try to explain the behavior by giving us more insight into the lives of the poor. These sections are the best part of each chapter. But the authors say that they are still unable to explain the seemingly irrational behavior. Now, they throw up their hands and appeal to something called _behavioral economics_. Humans are irrational and they need brilliant economists to design aid strategies that take their irrationality into account. And "nudge" them to do the "right" thing. We are told that citizens of rich countries have benevolent "nudgers". But who "nudged" Europe and America from poverty to wealth a few hundred years ago? That question is not tackled by the authors.

While RCTs sound very scientific, no mention is made of the problem of "data mining". i.e. the problem of finding "statistically significant" results simply by trying out a large number of strategies. Spurious results will not work "out of sample". How have the rigorously vetted strategies done when used "out of sample"? We are not told. The comparison to drug testing raises other questions: There are many critics who claim that that the FDA generates more costs than the benefits. RCTs only tell us if a drug works for the average person. But is that the right question? Since there is so much variation amongst people, might not some people benefit from a drug? Similarly for the aid strategy. A more general concern about the book is the astonishing degree of confidence that a "solution" to poverty exists. And that "solution" is amenable to the methods of science. Authors are no doubt familiar with Hayek's criticism of _scientism_. I wonder how they would react to it.

This is an ambitious book. The best parts of the book are the descriptions of the lives of the poor. For example, the description of the mechanics of micro credit is very interesting. But the book fails to tackle more important questions: What are the limitations of RCTs? What is the role of religion and culture? The technocratic and paternalistic tone of book jars. I leave the reader with the following excerpt. This is a rare reference to religion I was able to find in the book: "When the poor actually know what they want -- marrying their daughter to someone from the right caste or religion, to take an *unfortunate* but important example -- they are not at all easy to bribe".
After reading this sentence, I am forced to conclude that all the author's talk of respect for the choices of the poor is mere talk.
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6 of 7 people found the following review helpful:
5.0 out of 5 stars A highly useful contribution to the debate on development cooperation and the poverty eradication project, June 3, 2011
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
The state of the professional debate in development cooperation - a form of social engineering ultimately aimed at the eradication of extreme poverty - shows some resemblance to the situation in medicine in the early 19th century. Increasingly it is possible to rely on objective data on how things work, but that type of knowledge finds it hard to be on the forefront of a debate that is still highly ideological and political. This does not mean that in development cooperation anything goes. It simply means that the profession has yet to gain the upper hand on charlatans and quakes that sometimes seem to dominate the debate. The profession in other words lacks a comprehensive system for the collection of hard data and conclusions and the identification of what works and what does not work. It thus also does not yet have a system to weed out ideological statements based on journalistic `evidence'. Worse, the little scientifically tested information that is available has a tendency to remain or disappears in unnoticed corners.

Less than ten years ago Abhijit Bannerjee and Esther Duflo created the Abdul Latif Jameel Poverty Action Lab which is dedicated to a type of testing that is one of the bedrocks of modern medicine: randomized testing. That in itself is a small revolution in an area where regression analysis and testing of single interventions still rule. Regression analysis can flesh out general tendencies, but often times the secret is in the structure and the historical path and by aggregating you lose that. Single interventions or case studies suffer from the fact that they provide empirical evidence of initial assumptions that may or may not be relevant. Furthermore they are only one story or a group of similar stories that may or may not be externally consistent. Finally, and most damning, these case studies are being often presented and/or researched by parties that have a vested interest in them. Randomized testing is more trustworthy that case-studies since it challenges prior assumptions, but is also suffers from a similar weakness: the findings may be internally consistent, but translating the results to other areas and times is a challenge. That however is no argument not to undertake those studies, the more so since over time the accumulation of these studies, perhaps with the help of regression analysis, may provide sufficient data to establish external consistency.

And sufficient and hard data already are available as witnessed in this book. The book is full of findings that provide insights that transcend the current debate on poverty. Combining micro-economics with randomized experiments the writers approach to the issue of poverty is refreshing. In the process they provide insight and meaning to the many perplexing and contradictory phenomena even a casual observer of poverty is confronted with. They show why poor people that get more income actually eat less, why they do not use the many services provided for them, why they are reluctant entrepreneurs, why life is so much more challenging for poor people than rich people, etc. etc. Just to survive poor people need to have a resilience that almost seems super-human. Anyone interested in poverty in general and/or specifically in issues pertaining to hunger, health, education, family planning, micro-credits, saving, entrepreneurship and institutional development should not miss this book.

To summarize, a groundbreaking book that could lift the debate on development and development to a higher professional level and a must read for anyone truly interested in the actual nature of being poor and the challenges poverty poses to the poor. In the words of Amartya Sen: "A marvelously insightful book on the real nature of poverty."
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6 of 7 people found the following review helpful:
4.0 out of 5 stars radical indeed, May 26, 2011
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
Development economics is a comparatively new field of study and it has changed considerably in its roughly fifty years of existence. "Poor Economics" represents a significant change, namely a move away from the sweeping generalizations of scholars such as Jeffrey Sachs and William Easterly, and a realization that we actually understand very little in development economics. The proof of our lack of understanding can be found in our lack of success in actually bringing about wealth in the developing world (either that or a hidden lack of intent).
In any case, Banerjee and Duflo start with the premise that, given the inaccuracy of past models, the best we can do is start on a micro level and see what works. They do this through randomized control trials (RCTs), in which groups are subjected to different treatments, such as subsidies for food, education campaigns, or reorganization of village committees. The groups are randomized, with some groups receiving the treatment (experiment group) and others not receiving anything (control group).
Using the results from numerous RCTs around the world, as well as hundreds of other experiments, surveys, case studies and more, "Poor Economics" is incredibly well researched. One thing the authors don't justify, however, is whether RCTs are good predictors of real life choices. For example, how similar are the treatments used in RCTs to the actual policies implemented in real life?
I won't summarize the contents of the book. But I can say that the conclusions within are indeed "radical" in the sense that they take very little for granted. They are based off of micro level data and offer very interesting insight into the incentives that shape the lives of the poor.
The policy recommendations at the end of the book are incontrovertible, but I don't know who realistic they may be in the face of macro-level constraints such as world trade policies that favor developed countries. I have my doubts as to how effective even the best policies and the best governments can have on the development of countries under the economic hegemony of the US and Europe. I wished the authors had addressed this.
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6 of 7 people found the following review helpful:
5.0 out of 5 stars fabulous book, May 9, 2011
This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
All too often development policymakers tout magic bullet solutions without backing up their assertions with rigorous empirical analysis. This book offers a powerful antidote - instead of rhetorically convenient soundbites, Banerjee and Duflo synthesize a remarkable amount of cutting edge economic research: the authors do a wonderful job of both describing the lives and choices of the poor and illustrating what interventions improve their well being. All in all, I found this book to be both enlightening and inspiring - it's a must read for those interested in world poverty and ways to fight it!
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3 of 3 people found the following review helpful:
5.0 out of 5 stars Excellent and well researched book, July 17, 2011
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This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
I had the opportunity to read this book Poor Economics by Abhijit Banerjee and Esther Duflo. The book provides excellent insights into the life of poor. The main objective of the book is resolve the conflict between the two solutions for global poverty. One of the solution being is to do nothing and allow the market to evolve in poor countries and other being to fund them until the markets are mature enough to take care on their own.

The authors try to emphasize the fact that there is no one fixed approach to solving the poverty problem. But through RCT (Randomized Control Trials) which many researchers and authors have conducted, the authors try to show that how simple policy changes to existing programs can make it more effective.

For eg. take the example of child vaccination. The authors inform us that in certain poor areas in rural Rajasthan even when vaccination is free, people tend to avoid the program for a variety of reasons. One being superstitious beliefs against vaccination and other factor is time inconsistency. Time inconsistency affects the rich and poor but in the latter's case the consequences are much more drastic. Here the poor understand that vaccination might be better for their children's future just like we understand that eating healthy foods will prevent heart-attack in the future. We keep postponing our habit of eating healthy foods, the poor who have other immediate problems to take care (like the next meal) keep postponing their decision to take their vaccinate their kids. Now when the vaccination program made a small change of adding an extra provision of providing 2Kg dried lentils with each vaccination, the program saw a significant jump in % of children getting vaccinated. The authors explain that the superstitious beliefs though prevented vaccination, it was not rooted strongly in their minds. And by adding the free lentils to the program the poor could come to the camp, get vaccinated and go back home and need not worry about the next meal at least for that day.

The authors also show that poor, in contrast to the popular view that they are lazy and spend irrationally have a lot of factors going against them. For example the middle class society takes many things are granted. For eg. Vaccination: Once the child is born, the hospital immediately provides vaccination. An other example the authors cite is drinking water, we need not worry on water being treated with chlorine to prevent certain water borne diseases, the government does that for us. But for the poor, the water sources (wells, ponds) in their case needs to chlorine treated, else they are susceptible to infections. The poor need to take decisions constantly for their next meal, medicine, money for their business etc and at each step they face more problems than a typical middle class person.

The authors cover the following topics of health, education, insurance and loans (MFI, banks etc) for the poor. In each case they provide insights on why certain policies work and certain don't and how significant achievements in reducing poverty can be made even within existing political structures. Well researched and an useful book for anyone who wants to understand about global poverty.
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2 of 2 people found the following review helpful:
5.0 out of 5 stars Thoguthful and carefully written examples that defy formulaic poverty responses, October 20, 2011
This review is from: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (Hardcover)
The authors of "Poor Economics" start by contrasting the 2 polar positions found in "The End of Poverty" and "White Man's Burden" and they carefully walk not a middle ground, but on a plane above either of these simplistic viewpoints.

And in the end, "Poor Economics" is careful not to draw any "sweeping" conclusions. But the authors do offer several smaller specific viewpoints supported by their research, each of which points the way to better allocation of whatever resources we do choose to spend on poverty. Some of these observations include:

The poor often don't have access to correct critical information that could help them and are often hurt by misinformation they believe. They need credible sources of good information and a corollary is, govt misinformation undermines govt credibility and efforts. So, small investments in credible, specific useful information on nutrition, health, and education can go a long way.

The "poor" are responsible for too many of their own "decisions" that the "rich" have decided for them. In this item, almost everyone in the US would fit in the "rich" category because for example, we don't have to decide to drink clean safe drinking water, it's an almost automatic assumed fact of life. The "poor" in other countries have to know how to make water safe and decide that it's worth that effort and expense. Would anyone reading this know how to sanitize unsafe water from scratch or to fortify raw cereal?

And of course, the maxim that people live up or down to your expectations, or expectations are self-fulfilling. Especially in education, teachers who see no hope for their students will end up with failures, teachers who believe in their students will see success.

The one big picture sweeping conclusion they could have made is: there is no universal approach and every solution will be localized based not only on the local conditions, but also on the societal norms there. We have to understand a society and what drives the individuals in it before we can help.

This book is to poverty what gene therapy is to cancer treatment: not there yet, but hopeful and citing some very specific helpful research. Gene therapy and successful poverty reduction both depend of specifics.

The last thing I concluded (and this is me, not the authors) is their research shows the poor make the same less-than-perfect decisions we all do. Americans (on average) borrow too much, eat too much, and have unhealthy lifestyles that we know are unhealthy. If we get a tax refund, instead of paying down debt we buy something big and new. It's disingenuous for us to criticize the poor for their "bad" decisions about how to feed themselves or allocate their limited income when we're so bad at it ourselves.

I'd recommend this book to anyone interested in how the rich world treats countries and people in poverty. Unfortunately, I don't see it being the bestseller that either "White Man's Burden" or "The End of Poverty" is because it doesn't appeal to either extreme or use inflammatory rhetoric that will get it the kind of media attention those 2 books have.
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Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit V. Banerjee (Hardcover - April 26, 2011)
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