Beyond the Nobel: Esther Duflo Goes Granular on the Problems of Poverty

Abhijit Banerjee, left, and Esther Duflo, right, in the offices of the J-PAL Poverty Action Lab at MIT. Behind them is a quilt called "The Peoples of the World" by Fumiko Nakayama that hangs in the lobby of the offices.

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Because, as jokes go, being broke? Not one of the better ones.

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Film director Satyajit Ray and actor Marlon Brando walked through the streets of Kolkata in 1967. Ray pushed through the assemblage of beggars and street kids. Brando, appalled, called him on it before Ray, according to Brando’s memoir, put his hand on Brando’s shoulder and said, “You can’t help them all.” The attitude largely frames how the rest of the world, the haves, thinks about the other portion, the have-nots.

Unless your name is Esther Duflo. The 46-year-old Massachusetts Institute of Technology economist, along with husband Abhijit Banerjee and Michael Kremer, decided if the devil was in the details, then maybe that was a good place to start looking. On Monday, it netted them the Nobel Prize in economics. Where politicians have traditionally gone macro — everything from government cheese to widely maligned welfare programs — Duflo and crew went micro. And globally so.

Using randomized controlled trials under the aegis of the Abdul Latif Jameel Poverty Action Lab (J-PAL), co-founded at MIT by Duflo and Banerjee back in 2003, they tested methods from home, school and the street through giving the impoverished cash, reducing teacher absenteeism and combating drunk driving. This led to their 2011 book, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, which gathered their understanding of how the poor apply themselves to mitigating their poverty and how public policy can be framed to help, and not hinder, what works and move beyond what doesn’t.

when the award’s parties, dinners and the inevitable raft of interviews die down, and they will, the poor will still be there. Duflo and Banerjee will be too.

In a series of trials, Duflo and crew found that having teachers take daily pictures with students lowered the number of days that teachers were willing to be absent. Turns out, present teachers are much more useful than absent ones. And in Udaipur, India, Duflo set up three immunization camps that incentivized mothers to bring their kids in by offering a kilo of lentils for each kid immunized. The upshot? Full immunization went from 6 percent to 38 percent. Even if you’re measuring success in baby steps, it’s better if they’re going forward.

A fact that’s not totally assuaged detractors. Professor of Education Policy at Newcastle University James Tooley in a 2012 article derides “their own big-think judgments” as obscuring that all of their identified problems with education are “clearly caused by bad public policy.” Yet Duflo is both undeterred and steadfast in her efforts to change the aforementioned policy. And the accrued accolades suggest that if not wholly effective, they’re clearly getting an A for effort. So from pulling down the coveted MacArthur Genius Grant in 2009 and getting the John Bates Clark Medal for the best economist under 40 the next year, she and coauthor Banerjee also won the Financial Times/Goldman Sachs Business Book of the Year award the year after that. All of this and the Nobel — Duflo became the youngest Nobel winner in economics and one of only two women to win it — suggests that they might be on to something.

Though both the MacArthur award ($625,000) and the Nobel ($915,000 split three ways) have placed her well outside the range of what constitutes being impoverished, this has not dimmed her interest in seeking solutions for problems that have been with us long enough to start to feel intractable.

“There is no grand unifying theory of everything,” Duflo said in an interview with the Federal Reserve Bank of Minneapolis. (She didn’t reply to OZY’s request for comment.) “[T]here is not one vision of the poor that can explain everything, but there are a number of insights that run through it all. And my work is maybe always, or often, trying to push one of these insights or show evidence … like how people respond to financial incentives.”

It’s a well-considered enterprise for Duflo, a French-born daughter of a pediatrician mother and a mathematics professor father, whose sense of privation could not have been more than academic. That didn’t stop, and possibly fueled, a rolled-up-sleeve dedication to in-country fieldwork in places in India where poverty has worked its worst.

“Her and her team’s approach and conclusion,” says Dominion Investment Group founder John Getze, “if applied correctly, could dramatically improve poverty globally, which is, at this point, something serious policymakers should be taking seriously.”

However, when the award’s parties, dinners and the inevitable raft of interviews die down, and they will, the poor will still be there. And Duflo and Banerjee — their second book, Good Economics for Hard Times: Better Answers to Our Biggest Problems, will be released by year’s end — will be too, laying out that someone somewhere with the wherewithal and brain power to maybe fix things a bit is still trying to do so. A noble venture for Nobel Prize winners.

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