Abhijit V. Banerjee

Interesting summary of what we know (and don’t) about how poor people make decisions. Poor people are people! So they behave like people under resource constraints; when it comes to healthcare, that also includes information constraints (not really knowing much about vaccination, for example, including often lacking trustworthy sources of information). Some self-protective measures can also limit the upside of taking risks that might pay off—like people who spend money as it comes in so show more that they don’t get pressured to give it to needy family and friends. The research also suggests that microcredit has a limit—most businesses that poor people work in inherently don’t scale well, so expecting entrepreneurship to save poor people is a mistake. Given that poor people have to take way too many risks, it’s understandable that their ambitions for their children often are stable (ideally government) employment rather than entrepreneurship. show less

Aristotle warned us against expecting more precision from a subject than it allows. As Aristotle wrote, “for it is the mark of an educated mind to seek only so much exactness in each type of inquiry as may be allowed by the nature of the subject-matter.”

The idea that economics commands the same level of precision as physics has led to the perpetuation of several misconceptions and dogmas. That the authors fully understand this is a testament to the book. The authors are not dogmatic, nor show more are they apologists for any particular ideology; in each chapter, they summarize what the latest economic research tells us, and, more importantly, what it does not or cannot establish with any degree of certainty.

Like any book with complex arguments and subtle distinctions, the criticism will come from all sides. While the authors undoubtedly lean left, there will be those who feel they don’t lean left far enough, while those on the right are destined to label the book as “socialist propaganda.” The truth, of course, is somewhere in between, as the authors summarize the latest economic research on each topic to arrive at intellectually honest interpretations of the data, making this book a model for how economics should be taught and studied.

The authors don’t pretend to be all-knowing, but if you think that tax cuts for the wealthy stimulates growth, for example, you have more than 40 years of contradictory research and statistics to contend with. Likewise for immigration as the cause of depressed local wages or the reliance on the “free market” for efficient (or desirable) outcomes. The research just does not support these common beliefs or the simplistic theory that holds them up. The real world acts very differently than the economic models predict, so if you’re interested in actual results and statistics—rather than what economic theories tell us should happen—then this book is for you.

So what is the way forward? No one knows for sure, but we do know that sacrificing the common good in the name of economic growth is almost always misguided. In addition to not knowing what stimulates growth in the first place, economic growth (as measured by GDP) means little to most of us if all the growth goes to the super-wealthy. Perhaps the job of the government is not to identify the factors of economic growth so much as to make the standard of living higher for the average person. show less

This book is excellent. Most of us in countries like India claim to know about poverty. It is impossible for us to appreciate poor people's concerns, aspirations, and dreams. We don't live their lives nor interact with them, save at a superficial level. Experts who remain aloof from the problem of poverty have written most books on poverty.

This book fills a void and discusses the aspects of poverty and "poor economics." Each section covers a different aspect of poverty and contains enough show more anecdotal information and research findings. Each chapter also discusses the main theses of different authors.

I don't know why they referenced C. K. Prahalad's book on fortune at the bottom of the pyramid. That book is superficial.

There is a good concluding chapter.

The book is readable. Over the last few years, I saw many people troll the authors. This behaviour has been tragic because the trolls have not read this excellent book.

There is no simple solution to poverty. This is the tragic lesson of the book. But, I hope we come away with a greater appreciation of what needs to be done and don't treat the poor as useless. If we do this, then the authors have been successful. show less

You have a feeling that books like this will have to be re-written post Covid, as virtually every government of advanced economies takes Keynesian pump priming to its limit, as free money is manufactured (Quantitative Easing sounds so much more sophisticated) , as relocating for economic betterment becomes ever more challenging and governments become the employer of last resort. Forms of Universal Basic Income are even being tried

For the record, Duflo and Banerjee are not advocates of UBI, show more but they are advocates of the distribution of small quantities of emergency cash. They believe - with some justification - that a UBI of, say, $1000 a month will simply result in wages being reduced by $1000 by many employers. The fact that in many Western countries, Covid relief money has not trickled down to many employees suggests they are right about this. They are surely right too about the importance of work or purpose to people's well being.

This is an interesting book in the myths it debunks as much as anything else. Economists don't really know what drives economic growth, which must be a matter of some alarm for their employers. People won't relocate in search of work; well, some will of course, but the vast majority won't. Sense of place is important too. And the digital revolution will not create jobs - the industrial revolution of course did, but wage growth was stagnant or negative for 50 years. The best solution is to soak the rich, and there is no evidence at all, that high wages discourages the rich from trying to get richer. That's a pup we've all been sold - by the rich

Well worth reading, but almost immediately in need of revision due to current circumstances show less