By Didhiti Ghosh, Bureau Chief (Kolkata), IOP

KOLKATA, Oct 15, 2019: “Congratulations to Abhijit Banerjee on being conferred the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. He has made notable contributions in the field of poverty alleviation,” Prime Minister Narendra Modi Tweeted on Monday. PM Modi congratulated Indian-origin economist Abhijit Banerjee, Esther Duflo and Michael Kremer after the announcement of 2019 Sveriges Riksbank Prize popularly known as Noble Prize. The prestigious prize constituted in the Memory of Alfred Nobel has been awarded to Abhijit Banerjee, Esther Duflo and Michael Kremer in Economic Sciences “for their experimental approach to alleviating global poverty.”

In the present stature, Banerjee stands second only to former Nobel laureate Amartya Sen. "I think that the prize has been given to the most competent persons," Sen said, speaking to PTI from Boston.

WINDING THE IDEA BACK A FEW YEARS

For the past two decades, the world's most-feted economist couple has tried to understand the lives of the poor, in "all their complexity and richness". Both Mr Banerjee and Ms Duflo are professors at the Massachusetts Institute of Technology (MIT). Ms Duflo is the second woman to be awarded a Nobel in economics.

At the age of 6, Abhijit Banerjee knew exactly where the poor lived - little shanties behind his home in Kolkata. The children there seemed to have a lot of time to play and would beat him at any sport, leaving him jealous.

"This urge to reduce the poor to a set of clichés has been with us for as long as there has been poverty. The poor appear, in social theory, as much as much in literature, by turns lazy or enterprising, noble or thievish, angry or passive, helpless or self-sufficient," Mr Banerjee and Ms Duflo wrote in their seminal work, Poor Economics, which examined the real nature of poverty and how the poor reacted to incentives.

"It is no surprise that the policy stances that correspond to these views of the poor also tend to be captured in simple formulas: 'Free markets for the poor', 'Make human rights substantial, 'Deal with conflict first', 'Give more money to the poorest', 'Foreign aid kills development' and the like."

ABHIJIT BANERJEE AND ESTHER DUFLO

Banerjee, who has been married to Duflo for the past four years, is currently employed as the Ford Foundation International Professor of Economics at MIT. Born in Kolkata, Banerjee is an alumnus of South Point School and Presidency College. Duflo is a French-American economist and has co-founded the Abdul Latif Jameel Poverty Action Lab with Banerjee.

Interestingly, Duflo was Banerjee's doctoral student when the two met. While Esther was pursuing her PhD in Economics from MIT in 1999, Banerjee was her joint supervisor. Abhijit Banerjee was first married to Dr Arundhati Tuli Banerjee, a professor at MIT. Both belonged to Kolkata and had a son together. They eventually divorced.

In fact, Duflo and Banerjee go way back; in 1994. Her first encounter with Banerjee took place soon after, when she attended his class on development economics, a subject that was barely taught in France. In 1997, Banerjee accompanied Duflo on her first trip to India and was her guide during the tour. The two lived together for eighteen months and even had a child in 2012. In 2015, the couple formally got married.

Together, Banerjee and Duflo undertook the Herculean task to transform development economics and the way it is perceived in the world. And what could be better than sharing the Nobel with your partner? This, without a doubt, is the #couplegoals in the truest sense of the term.

THE PERILS OF POVERTY

This year’s Laureates have introduced a new approach to obtaining reliable answers about the best ways to fight global poverty. In brief, it involves dividing this issue into smaller, more manageable, questions – for example, the most effective interventions for improving educational outcomes or child health. They have shown that these smaller, more precise, questions are often best answered via carefully designed experiments among the people who are most affected.

Over the years, helped by field studies using randomised trials in India and Africa, they tried to make sense of what the poor are able to achieve and where and for what reason they require a nudge.

As noted by the official press release of the Nobel Committee for the present award, despite recent dramatic improvements, one of humanity’s most urgent issues is the reduction of global poverty, in all its forms. More than 700 million people still subsist on extremely low incomes. Every year, around five million children under the age of five still die of diseases that could often have been prevented or cured with inexpensive treatments. Half of the world’s children still leave school without basic literacy and numeracy skills.

THE NEED OF THE HOUR

The need, the couple observed, "is to stop reducing the poor to cartoon characters and take the time to really understand their lives, in all their complexity and richness".

The problem, they said, was that the poor either get admired or pitied and are also not considered knowledgeable, and that there is nothing interesting about their economic existence.

RESEARCH THAT’S FASCINATING

Some of their work on how the poor consume food is fascinating. They questioned assumptions like the poor eat as much as they can. Using an 18-country data set on the lives of the poor, the economists found that food represented 36-70% of the consumption of the extremely poor living in rural areas and 53-74% among their urban counterparts. Also that when they did spent on food, they spent in on "better-tasting, more expensive calories" than micronutrients.

Nutrition is a conundrum in developing countries. The couple argue that things that make life less boring are a priority for the poor - a TV set, something special to eat, for example. In a place in the northern Indian state of Rajasthan, where almost no one had TV, they found the extremely poor spent 14% of the budget on festivals. By contrast, in Nicaragua, where 56% of the poor households in villages had a radio and 21% owned a TV, very few households reported spending anything on festivals.

Their work also suggested governments and international institutions need to completely rethink food policy. Providing more food grains - which most food security programmes do - would often not work and help little for the poor to eat better because the main problem was not calories, but other nutrients.

POVERTY & HOW IT AFFECTS LEARNING

One of their more interesting experiments was trying to understand the poor learning outcomes of children in schools in the developing world.

"We ran experiments where you change a bunch of inputs, like changing the way the teaching happens or change the books or change the timing. And it turns out that what's really critical is that the kids should have some time when they can catch up with the material they have missed, something that is excluded from most school systems in the developing world."

WHY NOBEL IN ECONOMICS?

As per the official citation provided on the website of Noble Prize, the 2019 Laureates in Economic Sciences “have played a very decisive role in reshaping research in developmental economics. Banerjee and his team’s research have potential to improve the lives of the most impoverished people on the planet.”

The press release announcing Banerjee’s win said that the trio has developed a unique experimental approach to answering difficult and often non-quantifiable questions about poverty and how it can be eliminated. Their approach breaks down the global poverty into smaller issues which can be solved easily and thereby have impact at grassroots levels.

It further said that the research findings of 2019 Noble Laureates have helped streamline research and helped find tangible results to fight poverty in practice. Many of their research approaches have helped solve healthcare issues in Kenya and improve remedial tutoring in schools in India.

THE GROUNDBREAKING RESULTS LED TO EVOLUTION OF DEVELOPMENT ECONOMICS

The media release claims that the biggest achievement of Abhijit Banerjee and his colleague’s research is that it has helped to develop a new domain development economics that aims to improve the quality of life of impoverished people. Furthermore, their experimental approach has transformed development economics into a flourishing research domain through which researchers are able to understand and resolve poverty and allied issues.

“In India, the poor do not eat any more or any better when their income goes up”

"It is probably not enough just to provide the poor with more money, and even rising incomes may not lead to better nutrition in the short run. As we saw in India, the poor do not eat any more or any better when their income goes up; there are too many pressures and desires competing with food," the laureates observed.

The couple believe there are no magic bullets to end poverty. Instead, there are a number of things which could help improve their lives: a simple piece of information can make a big difference (what is the easiest way to get infected with HIV); doing the right thing based on what we know (cheap salt fortified with iron and iodine); and helpful innovations (microcredit or electronic money transfers using mobile phones).

They hold out hope that "poor countries are not doomed to failure because they are poor or because they have had an unfortunate history". What needs to be often fought, they say, is "ignorance, ideology and inertia".

POINTERS ARE PROUD!

Both Abhijit and his younger brother Aniruddha Bhaskar appeared for their board exams from South Point School in Kolkata. The news of Abhijit Vinayak Banerjee getting the Nobel in economics sent frissons of delight among the school’s teachers and students, current and past.

The Nobel laureate completed his schooling from the Kolkata’s South Point High School (Batch 1978). Bengal’s late filmmaker Rituparno Ghosh, was in the same class as well.

Banerjee, an alumnus of Jawaharlal Nehru University (JNU) had earlier graduated from the Presidency College in Kolkata. In 1988, Banerjee obtained his PhD in Economics from Harvard.

ABOUT NOBLE PRIZE FOR ECONOMICS

Noble Prize for Economics is formally known as the “Bank of Sweden Prize in Economic Sciences In Memory Of Alfred Nobel”. Unlike the other Noble Prizes which were created by Alfred Noble, it was created at a later date and is considered to be part of the ‘Nobel stable of awards’. Noble Prize for Economics was setup by Riksbanken, the Swedish Central Bank in 1968 and so far 81 people have been awarded Noble Prize for Economics.

The winner or Noble Prize for Economics wins 9 million-kronor ($918,000) cash award, a gold medal and a diploma. The trio of Abhijit Banerjee, Esther Duflo and Michael Kremer will be awarded Noble Prize for Economics at Stockholm on 10^th December 2019 – the death anniversary of Prize Founder Alfred Nobel.

Photo Courtesy: Nature, The Week, Aeon.

[An ex-alumnus of South Point, DIDHITI GHOSH is an India Columnist at La Agencia Mundial de Prensa, USA, Bureau Chief of Indian Observer Post based in Kolkata & Conference Interpreter (Spanish-English-Bengali). E-mail: didhiti.24@gmail.com | LinkedIn: https://bit.ly/2H6gNAv].

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