Kieran Madden

By Kieran Madden - 22/10/2019

Kieran Madden

By Kieran Madden -

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“Random” answers for poverty prove Nobel-worthy

Far too often, debates on topics that really matter are mired in oversimplification at best, and stagnate in sloganeering at worst. When it comes to foreign aid, where over 700 million people still live in extreme poverty according to the World Bank, the debate was stuck in an aid-good/aid-bad deadend for decades. Thankfully, the 2019 winners of the Nobel Prize for Economics, used evidence and empathy to show a new path.

Moving beyond generalisations about “the poor” to understand how people actually think and behave

Husband-and-wife Harvard economists Harvard Abhijit Banerjee and Esther Duflo, alongside MIT scholar Michael Kremer were awarded the prize by the Committee “for their experimental approach to alleviating global poverty.” Dubbed the “Randomistas,” they pioneered the use of randomised controlled trials (RCTs), also known as field experiments, to understand what works and what doesn’t when it comes to reducing global poverty. But instead of celebrity-fronted global solutions they went local: moving beyond generalisations about “the poor” to understand how people actually think and behave and empirically tested what will really make a difference in their lives.

It may seem obvious to do this, but their experimental approach took hold in a time where the foreign aid debate was marked by a clash of two opposing ideas championed by economists Jeffrey Sachs and William Easterly. Sachs argued for a significant increase in foreign aid spending to end extreme poverty and get developing countries on the bottom rung of the capitalism ladder, while Easterly claimed that the development dollars of well-intended experts like Sachs tended to do more harm than good, often ending up in the pockets of corrupt leaders. These were more values-driven than evidence-based.

The award-winners are searchers, using scientific evidence to fight what they called “ignorance, ideology and inertia.”

Easterly, to his credit, went a bit deeper and criticised the effectiveness of top-down solutions foisted upon countries by “planners” and advocated for what he called “searchers,” people who seek bottom-up solutions aimed at smaller, more local problems. The award-winners are searchers, using scientific evidence to fight what they called “ignorance, ideology and inertia.”

In the nineties, for example, the winners looked into improving things like education outcomes in Kenya. While popular, intuitive solutions like providing school meals to the children or more learning aids like textbooks didn’t seem to help the children learn better, their experiment showed how changing how teachers taught and providing affordable de-worming tablets to ensure children had more days at school seemed to make the most difference. These shifts from ideological goods to gains that are proven over time can make a big difference to people’s actual quality of life.

These shifts from ideological goods to gains that are proven over time can make a big difference to people’s actual quality of life.

Part of the trio’s research success was down to their empathy, that they started with the idea that “often the poor are reduced to caricatures and often, even people who try to help them do not actually understand what are the deep roots of the problem.” This very human starting point, alongside robust use of experimental evidence will be key to working towards the Sustainable Development Goal to end extreme poverty for all people everywhere by 2030. Let’s hope this award inspires many others to follow their approach.

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Kieran Madden

By Kieran Madden -

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