ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Minimising Global Poverty


Abhijit Banerjee, Esther Duflo and Michael Kremer on 14 October shared the Sveriges Riksbank prize in economic sciences in memory of Alfred Nobel for their experimental approach to alleviate global poverty. The approach is considered to be a breakthrough in the field of deve­lopment economics. Banerjee and Duflo are the Ford Foundation International Professor of Economics and the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at Massachusetts Institute of Technology (MIT), respectively, Michael Kremer is the Gates Professor of Developing Societies at Harvard University. “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 Royal Swedish Academy of Sciences said in a statement.

The foundation of their research lies in the establishment of MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL) in 2003. It is a global network of anti-poverty researchers that conducts field experiments and coordinates with government and non-governmental organisations and donors, and performs randomised control trials, developing a technique that breaks substantial issues into manageable questions. The researchers at J-PAL evaluate social programmes and policies to improve the condition of the world’s poor. They have developed the scientific tool called RCT to improve policy design. RCT is a randomised controlled trial, which is a medical experimental tool that aims to reduce the source of bias when testing the effectiveness of a new experiment. The main purpose of randomised evaluations is to determine whether a programme has an impact or not, and more specifically to quantify how large the impact is. J-PAL affiliated researchers have 978 ongoing and completed random evaluations in almost 85 countries.

In 1990, 36% of the world population  was living under the poverty line set-up according to the World Bank, which got reduced to 10% in 2015. Duflo in her briefing at MIT said that in the last three decades “the two groups that did relatively well in the world economy are the ultra-rich and the ultra-poor,” highlighting the improvement in poverty. World poverty does not only restrict itself to the monetary aspect of the economy, but its manifestation includes mortality, malnutrition, education, sanitation, discrimination, and the inability to participate in decision-making.

The bottom line is, though RCT is not a panacea of global poverty, it is an important tool for poverty alleviation. Things are moving in the right direction as we are moving from just theoretical discourse to a practical approach towards poverty. This year’s Nobel Prize will incentivise the researchers to explore boundless depths of development economics.

Mukul Jaspal



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