Bravo banerjee duflo and kremer

Bravo banerjee duflo and kremer

Nobel goes to their experiments with poverty.

It is bracing to have one more Indian get a Nobel prize, and that, too, for work of extreme relevance to India. Abhijit Vinayak Banerjee, Esther Duflo and Michael Kremer have been jointly awarded this year’s prize for their work in designing measures to combat poverty. Economists, it could be said, have only analysed poverty, while the point, really, is to remove it. This might have been valid for traditional development economics. It began with simple, macroeconomic models and evolved to sophisticated measurement of poverty, for which Angus Deaton got the Nobel in 2015. This year’s awardees take development economics to a new level of offering specific solutions to particular problems of poverty.

The award recognises that fast growth alone will not end poverty in general or its specific manifestations. Within poor countries themselves, things vary across regions and groups more acutely than they vary between rich countries and poor ones. The awardees deploy advances in microeconomic theory to examine the phenomenon. They grapple with human bias and prejudice, which economists call bounded rationality, and insights from the field of information economics and incentives to arrive at specific solutions. Banerjee is director at the Abdul Jamil Lateef Poverty Action Lab, Jaipur, which designs and carries out specific experiments to arrive at solutions to development challenges, whether in education, healthcare, farming or gender relations. One insight from multiple experiments: it makes sense to offer an incentive, say, a bag of lentils, for each child immunised, to lower the cost per child, in an effective campaign of immunisation. Another insight: simply throwing more money at education will not raise quality, while tutoring the laggards would.

Banerjee is not an activist but has not shied away from political positions in favour of liberal democracy and critiquing the government. A Nobel prize might make his dissent palatable. But the point is to appreciate difference of opinion as democracy itself.