Poor Economics. A Radical Rethinking of the Way to Fight Global Poverty

Abhijit V. Banerjee, Esther Duflo
New York: PublicAffairs, 2011, 320 p.
Abhijit V. Banerjee and Esther Duflo are the authors of the 2011 PublicAffairs book (reprinted in 2012): Poor Economics, a Radical Rethinking of the Way to Fight Global Poverty. Both professors in the Department of Economics at the Massachusetts Institute of Technology (MIT), they founded in 2003, (together with Sendhil Mullainathan, professor at Harvard University) the Abdul Latif Jameel Poverty Action Lab (J-PAL). J-PAL is a Research Center at the Economic Department of the MIT where a network of international researchers look for scientific evidence in developing countries in order to improve policies addressed to reduce world poverty. Among other activities, A.V. Banerjee dedicated his knowledge as consultant for the World Bank and for the Government of India. E. Duflo was voted by the Foreign Policy Magazine as one of the 100 most influential thinkers.
The book presents the results of 15 years of studies in 18 countries world wide describing why people living on less than 99 cents (American dollars) take the decisions they do. The main question asked is whether there is such a thing as a poverty trap. The two contradicting theories are sustained by (1) Jeffery Sachs, adviser to the United Nations and professor at Columbia University and (2) by William Easterly, former research economist at the World Bank and current New York University professor. J. Sachs is a supporter of the idea that foreign aid contributes to reducing world poverty by taking people out of the poverty trap, while W. Easterly argues that foreign aid does not work and people should get incentives to find their own way out of poverty. A.V. Banerjee and E. Duflo start from the premises that the existing theories regarding eradication of the global poverty are too simple and fail to provide answers to specific questions.
The book is divided between private lives of the poor and the institutional level. The authors argue in the 10 chapters of the book that if there is a will, there is a way. By painting a rather general picture at first, the two authors bring down myths by using scientific evidence.