June 19, 2024

Economix: Using Economics to Help the World’s Poor

Book Chat

Abhijit Banerjee and Esther Duflo — both professors at M.I.T. — have helped changed the practice of economics. Mr. Banerjee and Ms. Duflo have pushed anti-poverty programs in developing countries to become more serious about evaluating whether they are actually improving people’s lives.

Abhijit Banerjee and Esther Duflo in the field in Hyderabad, India.David Baron/BBC Abhijit Banerjee and Esther Duflo in the field in Hyderabad, India.

I wrote about their work in a 2008 column. The New Yorker profiled Ms. Duflo last year. Ms. Duflo won the John Bates Clark Medal, which goes to the top economist under 40, in 2010. Mr. Banerjee appeared on National Public Radio this week, and a portion of a speech he gave to the Asian Development Bank is available on YouTube.

My conversation with the two — about their new book, “Poor Economics,” which covers education, health, governance and other topics — follows.

Q. You write about the strong evidence of the importance of education: the big income gains after Indonesia went on a school-building spree; the income gains and mortality reduction after Taiwan made school mandatory; the declines in teenage pregnancy among more educated girls in Malawi and Kenya, to name just a few examples. But there are definitely still education skeptics, some of whom point out that Africa has become far more educated over the past generation without become far richer. How do you respond to the point that more education doesn’t always lead to much faster economic growth?

Mr. Banerjee: It is not clear that the skeptics have always thought carefully about the alternative: what would have happened had Africa not invested in education. Would things have been even worse? I don’t know the answer, but that is the reason why these comparisons are inherently difficult to interpret. When you compare individuals, rather than countries, you find that education improves both income and the quality of life.

However, let us for the sake of the argument assume that education actually did not promote growth in Africa. I think that there a number of historical reasons why delivering quality education was particularly a challenge in Africa: First, the colonial powers were particularly niggardly in investing in African education, so the African nations were suddenly had to run a whole education system despite the fact that they had very few people who were ready to teach, especially at post-primary levels. On the other hand they could not very well tell the newly liberated citizens that their educational aspirations had to go on hold. So the countries opted to expand education without really being in a position to do so.

Second, just as luck would have it, some of the countries that decided to invest the most in education, like Angola, Mozambique, Senegal and Sudan, ended up in long-drawn civil conflicts. I don’t think education is the reason they had these conflicts — it was more that they just did not know what was coming to them after colonialism.

Last, but by no means least, as we argue in the book, the colonial model of education, which was intended to educate a small elite in the ways of the colonist, was adopted wholesale by the post-colonial states, despite the fact that they were now aiming for mass education of a population of first generation literates. No wonder the kids did not learn very much from being in school.


Q. Yes, you argue that the research shows all children — including ill-prepared ones — can learn and that even modest differences in outcomes — say, finishing fifth grade instead of second grade — have positive effects. But obviously many, many schools, from Mumbai to Lagos to Houston, do a bad job of educating poor children. What distinguishes the schools that get impressive (and rigorously evaluated) results?

Ms. Duflo: That’s indeed a vexing puzzle: experiences in the developing countries (the very successful remedial education programs run by Pratham, in India, for example) but also in the U.S. (the “no excuses” charter schools in Boston, or schools in the Harlem Child Zone in New York City) suggest that it is possible, perhaps even not that difficult, to significantly improve the quality of education. Yet most schools completely fail their students: why is that? It would be too easy to blame a lackadaisical public school system, but even the private schools that are attended by many poor kids around the world could do much better. In the U.S., not all charter schools deliver quality education.

Our sense is that what is going on is that schools have forgotten, or perhaps never knew, that teaching fundamental skills to everyone should be their prime objective. In Kenya, India or Ghana, teachers still try to teach an absurdly demanding curriculum to a very diverse set of pupils, many of whom are first-generation literates and get little or no help at home. Covering the entire curriculum is the priority, even though the majority of children may be lost by the end of the first week.

Why aren’t parents revolting, one might wonder. Why are they not demanding that their children be taught at the appropriate level, instead of sitting through day after day of teaching that mean nothing to them? In part this is because they do not know how badly schools are doing: they are not in a position to evaluate what their children are learning, and no one tells them that they are not. In part it is because they have bought into the elite bias that plagues the entire system: parents often seem to believe that education is worth it only if the child can reach the highest level.

Making sure that schools deliver may be in part a matter of defining what “deliver” means: not preparing the top of the class for some difficult public exam while ignoring the rest, but ensuring that every child learns core skills, and learns them well.

Q. Let’s broaden the discussion from education. If you each could have a few minutes with the new leaders of South Sudan — the world’s newest country and a very poor one — and they asked you how they could best improve the lives of their citizens, what would you tell them?

Ms. Duflo: In just a few minutes, we could not cover very detailed ground. So we’ll have to focus on the basics. First of all, I would try to convince them that a key priority would be to invest enough money and talent in running good quality social services for the poor, including free access to good schools, preventive medical care, and hospitals. This may not seem like rocket science: but these are basic human priorities, and these are also domains where some things are known about what may work.

Second, I think I would try to convince them to run anti-poverty policy in a more intelligent way than what we see in most countries. In particular, I may try to encourage them not to listen too much to the elevator pitches of all the other experts, and stake their entire policy course on the basis of those… Of course they’ll have to start somewhere, and there is a body of knowledge available to choose policies that are likely to work. But they will still have a lot more to learn about the best ways to achieve their objectives. So I would like to advise them to always keep some margin to experiment, in order to find the best programs to reach those goals.

Mr. Banerjee: Since they will no doubt want more specific suggestions, here are two policies that I think every poor country should implement. A small universal cash grant to everyone over 12, based on biometric identification. This guarantees that no one has to face the humiliation of being totally indigent, and from our evidence, makes people more productive as well. Making it universal is important, so that they do not attempt to identify the poor (which is very difficult to do effectively in poor countries).

Second, a free universal health insurance policy that covers catastrophic health events, which allows people to go to private or public hospitals. Catastrophic health shocks do enormous damage to families both economically and otherwise, and are easy to insure, because nobody gets them on purpose. On the other hand, insurance policies that only treat certain catastrophic illnesses are hard to comprehend, especially of you are illiterate and unused to the legalistic nature of exclusions etc. Therefore people do not value them as much as they should which makes it hard for markets to supply them. This is an obvious thing for governments to take on.

Article source: http://feeds.nytimes.com/click.phdo?i=4cfac9df46cc041e7874b813ca2b08b9

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