A review of Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, by Abhijit Banerjee and Esther Duflo
@@@@@ (5 out of 5)
Public debate about the way to combat global poverty has ricocheted between two extremes. One was summed up in 2005 in The End of Poverty by Jeffrey Sachs, the Columbia economist who spearheaded the UN Millennium Development Goals. The other was laid out by former World Bank economist William Easterly the following year in The White Man’s Burden. Sachs advocates massive government-to-government foreign aid. Easterly deplores foreign aid, convinced that it does more harm than good.
In Poor Economics, Abhijit Banerjee and Esther Duflo seek a path between these two extremes, emphasizing the Randomized Controlled Studies they and their colleagues had conducted to ascertain what works and what doesn’t. (As of 2010, they had completed more than 240 studies in forty countries around the world.)They characterize Easterly’s approach as demand-driven, since he believes that poor people must seek their own solutions — a conservative, free-market attitude. By contrast, Sachs’ approach is supply-driven, reflecting Sachs’ conviction that a government must provide for its people based on consensus thinking about what poor people need — a liberal, top-down attitude. (I find myself bemused that I’m on the right side of this debate.)
Banerjee and Duflo report that their observations and research results support each of these two approaches — and sometimes both — depending on what issue they study. Hunger, health, education, financial services, family planning, business development, policy options: each field offers up a unique picture of success and failure attributed to one or another of the two approaches. In other words, circumstances and details matter, all of which may vary from one country to another. There is no silver bullet, they assert, no panacea to eliminate poverty.
Poor Economics focuses on the overarching question of whether there is such a thing as a “poverty trap.” Sachs contends there is: poor people will be stuck in poverty unless and until they are given the resources to release themselves from the trap. In many circumstances, Banerjee and Duflo find scant evidence to support this assertion. In others, however, they see the need for government intervention in the lives of the poor because otherwise they will perceive no reason to act for themselves.
Rather than identifying a simple, unitary explanation why Sachs’ approach often fails, they emphasize “ideology, ignorance, and inertia — the three I’s — on the part of the expert, the aid worker, or the local policy maker.” These three I’s, they claim, “often explain why policies fail and why aid does not have the effect it should.” Banerjee and Duflo explain further: “The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim.”
It would be difficult to find two scholars better prepared than Abhijit Banerjee and Esther Duflo to forge a middle course through the opposite poles of thought about global poverty erected by Jeffrey Sachs and William Easterly. Banerjee, an Indian economist who is also the son of two economists, holds an endowed chair in economics at MIT. He co-founded MIT’s Abdul Latif Jameel Poverty Action Lab with Duflo, a French economist and a former MacArthur Fellow (recipient of the “genius” award).
For anyone who seeks deeper understanding of global poverty and the ways and means of fighting it, Poor Economics is must reading. This book is the latest I’ve read in my ongoing effort to study world poverty. For a list of additional books on the topic, go to my reading list.
Books that helped me understand the world
During the last several years — mostly after I bought my first Kindle — I’ve spent a great deal of time reading, roughly half of it fiction, the other half non. I’ve gotten through hundreds of books and have reviewed the last 200 or so in this blog. It feels like a good time to cast a backwards look and identify those books that remain vivid in my memory — books that helped me understand the way the world works. Though most of the fiction I’ve read has been simply enjoyable, a few have touched me. None, though, have really nestled deep into memory and changed the way I view life and the world. I learn mostly from nonfiction. Whatever that says about my character — so be it.
Here, then, are the 20 nonfiction books that have impressed me the most in recent years. They’re arranged in alphabetical order by the authors’ last names. Those I’ve reviewed are boldfaced and linked.
Alexander, Michelle, The New Jim Crow. A shocking survey of the consequences of America’s so-called War on Drugs and the racism in our justice system
Banerjee, Abhijit, and Esther Duflo, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. A rigorous and balanced view of both top-down and bottoms-up development policies in the light of field research
Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World. History as I like it: painted in broad swaths across the millennia, rejecting the myth that the “West” was destined to rule the world
Diamond, Jared, Guns, Germs, and Steel: The Fates of Human Societies. A brilliantly original view of world history from a geographer’s perspective, ascribing variable levels of development primarily to environmental and geographical factors
Easterly, William, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. The case against foreign aid and top-down development, by a former World Bank economist
Elkington, John, and Pamela Hartigan, The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. The liveliest and most insightful of several books on social entrepreneurs
Gladwell, Malcolm, The Tipping Point: How Little Things Can Make a Big Difference. The seminal book on understanding “six degrees of separation” and the way networks work
Harden, Blaine, Escape from Camp 14: One Man’s Remarkable Odyssey from North Korea to Freedom in the West. A riveting tale of the North Korean gulag, spotlighting the reality of repression in the Kim family’s private kingdom
Hochschild, Adam, King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa. One of the most troubling books I’ve ever read about the legacy of colonialism: the harrowing story of how the Belgian King destroyed the Congo and murdered millions of its people
Johnson, Chalmers, Blowback: The Costs and Consequences of American Empire. A scholar and former U.S. official demonstrates how the U.S. dominates the world through hundreds of military bases, undermining our nation’s reputation and robbing our society of the means to address pressing social problems
Larson, Erik, In the Garden of Beasts: Love, Terror, and an American Family in Hitler’s Berlin. An eye-opening account of U.S. official anti-Semitism in FDR’s Administration that shackled our Ambassador in Berlin who witnessed the outrageous acts unfolding in Nazi Germany
Mann, Charles C., 1491: New Revelations of the Americas Before Columbus. A revisionist view of Native American society in both North and South America, offering proof of huge populations and sophisticated civilizations in the present-day U.S. and in the Amazon Basin
Miller, Brian, and Mike Lapham, The Self-Made Myth: And the Truth about How Government Helps Individuals and Businesses Succeed. A clear-eyed look beyond the bounds of Right-Wing ideology at the immeasurable benefits and services every “self-made man” has received from U.S. society
Mukherjee, Siddhartha, The Emperor of All Maladies. An oncologist’s brilliant history of cancer and of the medical profession’s slowly developing success in treating it
Polak, Paul, Out of Poverty: What Works When Traditional Approaches Fail. How a former psychiatrist, laboring face-to-face with $1-a-day farmers in some of the world’s poorest countries, helped 17 million families escape from poverty
Priest, Dana, and William M. Arkin, Top Secret America: The Rise of the New American Security State. A Pulitzer-Award-winning Washington Post reporter and her researcher rip the cover from the enormous intelligence establishment built after 9-11
Skloot, Rebecca, The Immortal Life of Henrietta Lacks. A science reporter’s captivating ten-year search to understand the consequences of a medical crime committed in an overtly racist era before the rise of medical ethics
Ward, Vicky, The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers. The most intimate and candid account of how Wall Street played the central role in launching the Great Recession
Wrong, Michela, It’s Our Turn to Eat: The Story of a Kenyan Whistle-Blower. A vivid account by a Financial Times reporter of how corruption holds sway even in one of Africa’s most developed economies
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Tagged as abhijit banerjee, Adam Hochschild, Africa, books, business, Chalmers Johnson, CIA, current-events, Dana Priest, Erik Larson, espionage, esther duflo, foreign aid, History, Jared Diamond, John Elkington, national security, Nazi Germany, Nonfiction, nonfiction books, Paul Polak, politics, poverty, Rebecca Skloot, science, social enterprise, Wall Street, William Easterly