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3 Win Nobel Prize In Economics For Work In Reducing Poverty

Oct 14, 2019
Originally published on October 14, 2019 4:30 pm

Updated at 9:55 a.m. ET

A trio of researchers from Cambridge, Mass., has been awarded the Nobel Memorial Prize in economics for their work in addressing global poverty.

Abhijit Banerjee and Esther Duflo — a husband and wife team from MIT — share the prize with Michael Kremer of Harvard.

"This year's Laureates have introduced a new approach to obtaining reliable answers about the best ways to fight global poverty," the Royal Swedish Academy of Sciences said in a statement.

Kremer pioneered an experimental approach in Kenya in the 1990s, and he was soon joined by Duflo and Banerjee. Their key innovation has been in breaking the issues of global poverty into smaller questions that can be more easily addressed, the academy said.

Esther Duflo of France waves after receiving the Princess of Asturias award for Social Sciences from Spain's King Felipe VI at a ceremony in Oviedo, northern Spain. She is only the second woman to win the 2019 Nobel Prize in Economic Sciences, sharing it with Abhijit Banarjee and Michael Kremer.
Jose Vicente / AP

"Our goal is to make sure that the fight against poverty is based on scientific evidence," Duflo told reporters Monday. "It starts from the idea that often the poor are reduced to caricatures and often, even people who try to help them do not actually understand what are the deep roots of the problem."

The Nobel committee said the experimental approach — now followed by hundreds of researchers and non-profits around the world — had been an important guide for policymakers.

"It provides evidence of what works and why," said Jakob Svensson, an economist at Stockholm University. "Some interventions have been scaled up. Others have influenced policy more indirectly, and some policies have been abandoned simply because they were proven to be ineffective, thereby saving resources that governments or NGOs can use on more productive or effective policies."

Duflo said the prize is a tribute to collective effort.

"I think the three of us stand for hundreds of researchers who are part of a network that work on global poverty that we created together 15 years ago," she said, also nodding to the thousands of partners in government and NGOs around the world. "It really reflects the fact that it has become a movement, a movement that is much larger than us."

Duflo is only the second woman to share in the economics prize, after Elinor Ostrom in 2009.

She told reporters that she is "incredibly humbled" by the award, which comes at a time of some soul-searching in the profession about a less-than-welcoming atmosphere towards women.

"We are starting to realize in the profession that the way that we [treat] each other privately and publicly is not conducive all the time to a very good environment for a woman," Duflo said. "Showing that it is possible for a woman to succeed and to be recognized for success I hope is going to inspire many, many other women to continue working — and then many other men to give them the respect that they deserve, like every single human being."

The prize, officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by Sweden's central bank, Sveriges Riksbank. Monday's award is the 51st Nobel in Economics.

The prize this year is worth 9 million Swedish crown ($915,300).

Asked how she plans to spend her share, Duflo recalled a story she'd read as a young girl about Marie Curie, who used the proceeds of her first Nobel prize to buy a gram of radium and continue her research.

"I guess we'll talk between the three of us and figure out what is our gram of radium," Duflo said.

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Around the world, hundreds of millions of people live in extreme poverty. Three economists trying to change that were recognized today with a Nobel Memorial Prize. The three helped pioneer a more rigorous scientific approach to evaluating efforts aimed at helping some of the world's neediest people. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: When doctors want to figure out the best way to fight a disease, they'll often set up a clinical trial testing one kind of medicine, for example, to see if it works better than a sugar pill. When it comes to fighting poverty, though, aid workers traditionally have not been so meticulous. Esther Duflo says that's been a drawback of even the most well-intentioned efforts.

ESTHER DUFLO: Often, the poor are reduced to caricatures. Even people who try to help them do not actually understand what are the deep root of the problems that are addressing the poor.

HORSLEY: Duflo and her husband, Abhijit Banerjee, who are both economists at MIT, set out to change that. In 2003, they established the Poverty Action Lab, a network of researchers around the world who try to measure what kinds of aid actually help poor people. Programs that work can be scaled up. Those that don't can be scrapped and the money and manpower shifted to other more productive programs.

DUFLO: Let's try and unpack the problem one by one and address them as vigorously and scientifically as possible - what works, what doesn't work and why.

HORSLEY: The committee behind the Nobel Memorial Prize said that approach has reshaped the way governments and nonprofit groups approach poverty. Duflo and Banerjee are sharing the prize with a fellow economist, Michael Kremer of Harvard. Speaking to NPR's Here & Now today, Kremer recalled how he helped organize randomized trials in Kenya decades ago to see if giving poor students more textbooks would help them do better in school.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

MICHAEL KREMER: Course, in some cases, it turns out that things that you thought would work don't work. And it's very important to have that information so that new approaches can be tried.

HORSLEY: Kremer found extra textbooks were little help to students who'd missed classes and fallen behind. But those same students could make big gains if they got some remedial instruction.

As Banerjee told Planet Money back in 2011, their approach is less concerned with sweeping theories of fighting poverty than figuring out what really works on the ground.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

ABHIJIT BANERJEE: We really operate at the level at which much of the actual effective policy discourse operates.

HORSLEY: Duflo is only the second woman to receive the economics Nobel. At a time when the economics profession is doing some soul-searching about how welcoming it is to women, Duflo says she hopes today's recognition will help.

DUFLO: I hope it's going to inspire many, many other women to continue working and many other men to give them the respect they deserve, like every single human being.

HORSLEY: Duflo also suggests the same scientific approach she and others have used to fight extreme poverty in the developing world could be useful in rich countries, as well. Many workers in Europe and America have grown anxious about their place in an increasingly global economy, Duflo said, policymakers need a deeper understanding of how to make their lives better and more meaningful.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

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