FT Business Book of the Year winner Abhijit Banerjee discusses his book ‘Poor Economics’ with Andrew Hill, FT associate editor, about radical ways of tackling global poverty and enlisting not just business money but ideas as well. The book is based on randomised control trials across five continents to test the impact of policies aimed at beating poverty, from the provision of free anti-malaria bed-nets to education subsidies. Very contested stuff, in my view, but it’s going to be hard to ignore.
Poor Economics maps out a third way between those experts who believe aid does more harm than good, such as William Easterly and Dambisa Moyo, and those who believe the reverse, like Jeffrey Sachs. Banerjee and Duflo say the three main reasons aid is ineffective are “ideology, ignorance and inertia”. “Precisely because [the poor] have so little,” they write, “we often find them putting much careful thought into their choices: They have to be sophisticated economists just to survive.”
You will hear about this book a lot. The interesting thing is that the book stresses that poverty is not a Global South issue only. Sounds like what we stress in the identity of DS.