Economics Nobel Prize 2019: The 2019 Nobel prize in Economics or more formally the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” has been awarded jointly to Abhijit Banerjee, Esther Duflo and Michael Kremer “for their experimental approach to alleviating global poverty.”
Both Banerjee and Duflo, who incidentally are a couple and have written a noted book titled “Poor Economics”, are associated with the Massachusetts Institute of Technology while Kremer is with the Harvard University.
The Nobel citation states “The research conducted by this year’s Laureates has considerably improved our ability to fight global poverty. In just two decades, their new experiment-based approach has transformed development economics, which is now a flourishing field of research”.
The spokesperson for the Nobel prize explained that the key difference in the approach of these economists while they applied themselves to problems of development economics, especially poverty alleviation, is that they chose to break down some of the most intractable issues into smaller parts and tried to understand what policy worked and what did not.
For example, why to school-going children do not learn enough. What Banerjee et al did was to break this issue down to understanding whether providing more inputs, such as textbooks, helps matters. But as they found, merely giving more books doesn’t help unless the schools were also provided with complimentary reforms.
The approach thus was to conduct field experiments and understand whether a small policy initiative works or doesn’t and if it doesn’t and why doesn’t it.
Tackling the problem this way helped researchers across the world better understand why some policies have worked and what policies need to be discarded.
Speaking immediately after the announcement, Duflo, who is only the second woman to win an Economic Nobel, said: “people have reduced the poor to caricatures without understanding the roots of their problems… (we decided) let’s try to unpack the problem and analyse each component scientifically and rigorously”.