Poor Economists- Nobel laureates

With the majority of the world experiencing holistic advancement in the last few decades, the privileged have successfully managed to upgrade their standard of living. On the contrary, the harsh reality of global poverty continues to haunt several lives, predominantly in the developing and underdeveloped nations. More than 700 million people in the world continue to survive on severely low incomes. Every year, five million children die of diseases that often could have been prevented or treated with existing set of interventions. Since the beginning of economic policymaking, battling impoverishment has been a central concern. It has been one of the most deliberated topics in developmental economics and despite various schools of thoughts working differently to alleviate poverty, no feasible results have been seen. The work of Banerjee, Duflo and Kremer, this year’s Laureates have proved to be a ray of hope in these times of darkness.

Abhijeet Banerjee started his research on experimental approach to alleviating global poverty two decades ago along with his wife Esther Duflo. After the Mrydals (1930s), they are the second couple to win nobel prize in social sciences. Till date, there have been only six married couples where both partners have shared the Nobel Prize. These couples have often been called “Partners in life and science”. Banerjee is a research affiliate of Innovations for Poverty Action, and a member of the Consortium on Financial Systems and Poverty.  His book Poor Economics compels the readers to think differently and explore several new poverty approaches . He was elected a fellow of the American Academy of Arts and Sciences in 2004. He was also honored with the Infosys Prize 2009 in the social sciences. In 2013, he was one of experts tasked with updating the Millennium Development Goals after 2015.

His wife Esther, the youngest person ever and the second woman to win the award, is a French American economist. She is the co-founder and co-director of the Abdul Latif Jameel Poverty Action Lab. She has co-authored a book with Banerjee called “Good Economics for Hard Times”. In 2003, she co-founded the Poverty Action Lab at MIT, which has since conducted over 200 empirical development experiments and trained development practitioners in running randomized controlled trials.

The third recipient, Michael Robert Kremer is an American development economist who is a professor of Developing Societies at Harvard University. Kremer proposed one of the most convincing explanations for the phenomenon of the World System population hyperbolic growth observed before the 1970s, as well as economic mechanisms of demographic transition. He also presented his research in the field of human capital at the International Growth Centre’s Growth Week 2010. The three have considerably improved the existing framework to fight global poverty. Their nuanced experiment-based approach and direct application theory of incentives has tremendously transformed development economics. This evidence is significantly witnessed across several projects the three have been a part of in developing nations. Their investigation has significantly deepened our understanding of poverty in the developing world.  Banerjee and Duflo in, Growth Theory though the lens of Development Economics (2005) discuss a key concept that links microeconomic development issues to low aggregate per capita income in developing countries and large heterogeneities and intersectionality that play a role in worsening the situation. They highlight the importance of changes in incentives, constraints and information that influence the outcomes of interest via human behavior. The conventional observational studies lack potential as the already existing situations happen to be the main subject matter. Their contention is that experiments on the other hand allow scholars to design experiments to yield results that have not yet been observed. They have applied an experimental approach to development economics in a plethora of ways. Their research has covered several socio-economic areas like poverty alleviation, education, health, behavioral biases, gender, politics, and credit. Their research has inspired a new generation of researchers and policymakers who, following the footsteps of these innovators plan to uncover the potential of experimental approach.

 

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