Poor Economics

I loved the new book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, by Abhijit Banerjee and Esther Duflo, both renowned economists at MIT, and both of whom are pioneers in using randomized experiments to evaluate the effectiveness of anti-poverty interventions in developing countries.

I was intrigued by their analyses of Pratham, an NGO in India that focuses on remediation and tutoring of children who are woefully behind (p. 75). One program run by Pratham is called "Balsakhi," which means "children's friend" (p. 84). The program takes children "who most needed help [in school] and sent them to work with the balsakhi, a young woman from the community, on their specific areas of weakness. Despite an earthquake and communal riots, the program generated very large gains in test scores for these children . . . . Yet these balsakhis were much less educated than the average private (or public) school teacher -- many of them had barely ten years of schooling, plus a week's training by Pratham" (pp 84-85). "By the end of the program, all the participating children who could not read before the program could at least recognize letters (in contrast, only 40 percent of those in the comparison villages could read letters by the end of the year). Those who could read only letters at the beginning were 26 percent more likely, by the end, to be able to read a short story if they had participated than if they had not" (p. 85).

In addition to education, Banerjee and Duflo discuss a wide variety of issues, from how to improve public health (which involves the difficulty of convincing people to go along with medical advice in countries where doctors have traditionally been quacks), whether micro-finance is all it's cracked up to be, how insurance often fails to work in developing countries, and how to improve political institutions.

It's a wonderful book, full of thought-provoking insights and surprising advice about how to improve life for the world's poorest people.