"Billions of government dollars, and thousands of charitable organizations and NGOs, are dedicated to helping the world's poor. But much of the work they do is based on assumptions that are untested generalizations at best, flat out harmful misperceptions at worst. Banerjee and Duflo have pioneered the use of randomized control trials in development economics. Work based on these principles, supervised by the Poverty Action Lab at MIT, is being carried out in dozens of countries. Their work transforms certain presumptions: that microfinance is a cure-all, that schooling equals learning, that poverty at the level of 99 cents a day is just a more extreme version of the experience any of us have when our income falls uncomfortably low.…
"The authors talk about understanding the economic lives of the poor and they argue against large, universal solutions. They are very optimistic about finding empirical evidence, both through experiments in policies that work or don’t work and through actually talking to people who are poor. One of the things that comes across so strongly in this book is the centrality of what Banerjee and Duflo call the sense of security – of how much poverty has to do with insecurity and how tremendously important it is, for the people they are talking to, to have a job that is regular and to have the sort of social security arrangements that are taken for granted across much of Europe. Yes, they have and they actually go and talk to people who are really poor, about their lives, their economic lives and their hopes. It did make me think about history as well, because it is called Poor Economics and I wondered why we don’t have more poor history – that is to say history that really is about the economic lives of the poor, rather than about how people have measured poverty or how people have tried to alleviate poverty or policies against poverty. So it was a very inspiring book for me as a historian. As with my first choice, it looks at people who are poor and shows that they also have ideas and shape the economy. I think policies have actually worked in many of the countries that are now most developed. In Britain the poverty that was so terrifying to people in the late 19th century was to a great extent got rid of by the policies of the early welfare state as well as by economic growth. Europe is a great success story in reducing poverty. In countries that are still relatively poor, namely China and India, one of the really exciting things that has happened in the last 20 years is that there are many millions of people who are moving out of poverty. I see that in India, and it is a tremendously important change in the world economy. There are parts of Africa where people are moving out of poverty. Things are changing in terms of which countries it is that are “dealing with” poverty. In terms of financial influence, India, China and Brazil’s role has increased enormously. In some ways European countries aren’t as confident as they should be about the successes of a hundred years of reforms and of reduction in the poverty of their population."
