Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

Banerjee (Making Aid Work) and Duflo (a contributor to Reinventing Foreign Aid), professors at MIT and founders of the university's Poverty Action Lab, offer answers to questions about aid: what it accomplishes, where it fails, which anti-poverty programs work and which do not, and why nine million children under the age of five die every year. Their results are often surprising, even counter-intuitive. For instance, many poorer families will concentrate their education dollars on the child they think most likely to succeed, sending that child (usually a boy) to school longer rather than spreading their education spending between all children, which might yield more in the long run. Banerjee and Duflo found evidence that relatively inexpensive improvements, such as water purification, may ultimately benefit a community more than, say, providing grain products. They also discovered that Kenyan abstinence programs encouraging school girls to marry older men resulted in an increase in HIV-AIDS, as older men are more likely to be HIV-positive. Their empirical approach differs from policy discussions that base support or criticism of aid programs on a broad overview; instead they illuminate many practicable and cost-effective ways to keep children and parents living healthier and more productive lives. An important perspective on fighting poverty. (Apr.)