More Than Good Intentions: How A New Economics Is Helping to Solve Global Poverty

Karlan, a behavioral economist, and Appel, an aid worker, use psychological insights and empirical studies to assess and trouble-shoot development initiatives (especially the ballyhooed microcredit movement, to which they devote several sympathetic but critical chapters). They focus on small fixes with outsized payoffs: "commitment" savings accounts that make depositors accumulate a fixed amount before they can withdraw; well-side chlorine dispensers to purify water; paying parents to take kids for checkups; increasing the application rate to a microloan program by, yes, putting photos of hot chicks on the brochure. The authors write in an engaging prose tinged with Freakonomics-style cutesiness—"It hadn't dawned on me that hookers' prices could be a topic for serious economic research"—and illustrated with Appel's vivid reportage on underdevelopment in Ghana. Their program of tweaking spending and saving behavior (sending text messages reminding individuals to save money each month, for example) can seem faddish and insufficient, given the vast needs of poor countries; still, theirs is an enlightening and optimistic take on smartening up development aid. (Apr.)