Image Source: https://www.borgenmagazine.com/
The 2019 Economics Nobel Prize Winners fight poverty with their work. Abhijit Banerjee, Esther Duflo and Michael Kremer used an “experimental approach to alleviating global poverty” with their research. Their work has drastically transformed development economics over the past two decades.
The Prize Winners
Abhijit Banerjee received his education at the University of Calcutta, Jawaharlal Nehru University and Harvard University where he received his Ph.D. in 1988. He works as the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology. He founded the Abdul Latif Jameel Poverty Action Lab (J-PAL) in 2003 alongside Esther Duflo. He is also a past president of the Bureau for the Research in the Economic Analysis of Development.
Esther Duflo received her education from Ecole Normale Superieure, Paris and at the Massachusetts Institute of Technology where she received her Ph.D. in 1999. She is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics in the Department of Economics at MIT. She is the co-founder and co-director of J-PAL. Her area of focus in research is understanding the economic lives of the poor with the aim to help design and evaluate social policies.
Michael Kremer received his education at Harvard University where he received his Ph.D. in Economics. He is the Gates Professor of Developing Societies at Harvard University. He was named a Young Global Leader by the World Economic Forum. He is the founding Scientific Director of Development Innovations Ventures at USAID and has helped develop the advance market commitment for vaccines to stimulate private investment in vaccine research and the distribution of vaccines for diseases in the developing world.
Banerjee, Duflo and Kremer began to research and study impoverished communities to better understand why they were impoverished and what could be done to provide relief. Their work began in the 1990s in Kenyan schools, using Randomized Control Trials (RCTs). This kind of study, inspired by medicine, works by targeting specific interventions to a randomly selected group, such as schools, classes or mothers. They then compare how specific outcomes change in the recipient group versus those who did not receive interventions.
The Economics Nobel Prize Winners fight poverty through simple interventions. The approach is even considered the new “gold standard” in development economics. It is sometimes even called “New Economics.” The work of the winners alleviates poverty through simple interventions like combating teacher absenteeism and cash transfers along with stimulating positive thinking among those living in poverty.
How does their research help alleviate poverty?
Through RTCs, the researchers were able to better understand why poverty exists and what the best ways to fix it are. Their studies have shown that smaller, more precise questions are best answered through RTCs among the people most affected. These RTCs have allowed the Economics Nobel Prize winners to fight poverty. For example, more than five million Indian children have benefitted from effective programs of remedial tutoring in schools as a direct result of one of their RTCs. Heavy subsidies for preventive healthcare that has been introduced in many countries is another example of the good their research is doing.
Banerjee, Duflo, and Kremer were awarded the 2019 Nobel Prize in Economics for their work in alleviating global poverty by using RTCs in impoverished nations. This work has set a new standard for approaching the economics behind poverty and allows for a better understanding of how poverty happens and how it can be fixed.