‘Keep your eyes on the prize’: Esther Duflo

As the world grapples with climate change and economic uncertainty, Nobel laureate Esther Duflo has a clear message: developing nations, particularly India, must take the lead. “A lot of countries take care of their poor in many ways. We shouldn’t think that we are entirely dependent on the US and what the US is going to do. We should take this as an opportunity (the US breaking away from the Paris Agreement) to create leadership in the absence of the US, India particularly has a chance to be a leader there, along with other countries such as Brazil and South Africa. India is on the front line of being affected by climate change. It also has a lot of solutions available and a lot of people to dream up new solutions,” Duflo said on the sidelines of the Jaipur Literature Festival.

In 2019, Duflo was awarded the Nobel Memorial Prize in Economic Sciences alongside Abhijit Banerjee and Michael Kremer “for their experimental approach to alleviating global poverty”. Duflo feels one of the crucial ways to approach solutions for poverty is to cultivate empathy from a young age. “What kids read when they are little stays with them,” she said. “I can still remember the books that I read as a child. It’s not so much about the information, but the values — what is important, what comes through in these books that you usually read and reread and reread,” says the 52-year-old who has recently written Poor Economics for Kids (Juggernaut, 2024). Children’s literature, she believes, can help shape societal attitudes toward poverty: “If they see that children who live in poverty have different problems but are not a different kind of human being, they will develop the empathy that is going to change the way they relate to them — and hopefully, the way they vote moving forward.”

Duflo urged the Indian government to maintain its focus on poverty alleviation. “India needs to continue to keep its eye on the prize — the welfare of the poor,” she said. “There has been a reduction in poverty in the last many years in India, and it has not happened mechanically just because there was growth. Growth is part of the story, but another part is the ability to empower people to take advantage of these opportunities.”

Story continues below this ad

With the annual budget presentation coming up on February 1, Duflo said: “Keep your eyes on the prize, which is making sure that the needs of the poor are taken into account.” She stressed on the urgent need to address climate-related challenges, citing recent extreme weather events. “As we saw last year in the terrible heatwave, the way people cope is often destructive to their health. Many people died, unfortunately, and those deaths could have been avoided by targeted income transfers or asset transfers at the right moment. If this is something that can be kept in the budget, I think you will see, Finance Minister, that it will actually be a great investment in the future of the people of India.”

Duflo is also wary about hyping up AI’s potential in poverty alleviation. “There is a lot of enthusiasm in India at the moment for AI and for including it in various programmes,” she said. “There are opportunities, for sure. But we need to be very careful not to overhype them, and we need to be very careful to evaluate them as we go, to make sure that we are in fact making a positive difference… We shouldn’t assume that AI is going to make a positive difference in development. We shouldn’t assume it wouldn’t either. We need to evaluate every single innovation before moving forward.”