*** Poor Economics by Abhijit Banerjee and Esther Duflo

If you are interested in the causes (and remedies!) for poverty, you will want to read Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, in which the authors suggest that we need to put the assumptions about the poverty trap to the test by running experiments. Do mosquito nets get ignored if given away for free? Let’s compare outcomes between regions that did give them out for free and others that did not. Do  poor people bypass childhood vaccinations because they are uninformed, or do they simply procrastinate, like the rest of us? Are crises always worse for the very poor, or for the middle class? Is fertilizer better purchased right at harvest time or when it is needed?

Through simple experiments the authors find that “the poor” are just like everyone else: they procrastinate, they spend rather than save, they practice diversification in their meager assets — but they don’t have a cushion, so when things go bad, they go really badly. The book is careful about prescriptions but still makes it clear that most anti-poverty programs are shooting blindly, using untested (and arrogant) assumptions when it would be pretty simple to ask, test, and measure. An inspiring and very approachable book. Since I said mean things about Ecole Normale intellectuals earlier I should mention that Duflo was educated there, and shines.

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