“Poor Economics- A Radical Rethinking of The Way to Fight Global Poverty” Book Review

Poor Economics is the first edition book authored by Abhijit Banerjee and Esther Duflo. It was first published in 2011 in New York.  Several groups of people can primarily use the book. Its audience can be economic lecturers, students, economists, the public interested in knowing about the economy and the government. The lecturers need a guidebook to teach students. Even though they are knowledgeable in economics, Lecturers may not fully integrate everything they have to teach. The book is structured such that it is divided into sections that allow teachers to enlighten their students effectively. For instance, a chapter by chapter guide helps a lecturer know which topics to teach first and how systematic the issues should follow each other.

The book is an essential tool for all economic students. Even though teachers teach them, the book provides detailed descriptions of what they ought to know about economics. For instance, a lecturer may pinpoint the main points; therefore, it is the student’s responsibility to find more about the topics. In such a case, the book is vital as it will give the student background information.  The book’s audience may also be economists. From time to time, they will require to renew their knowledge or acquire new knowledge. Instead of going back to school, some may opt to study the book as it has everything they need. Since the book is the latest version that has integrated the latest economics research, it is crucial to economists.

Lastly, the government may also use the book to study the patterns of economics. More so, the government is responsible for helping citizens eliminate poverty and propagate economic development. While many government officials may not have background knowledge of economics, the book is crucial because it will provide them with an outline of the possible ways of developing a country’s economy. Hence, the book is essential to lecturers, students, economics, and the government.

Background of the Authors

The authors of the book are Abhijit Banerjee and Esther Duflo. Banerjee is an Indian-born but natured American economist born on February 21, 1961. He is a great economist who has made great contributions to the field of economics. Currently, he is working at the Massachusetts Institute of Technology as an economist professor. His main work in economics centers on development economics in eradicating global poverty and has won a Nobel Memorial Prize in Economics with Esther Duflo, her wife, and the book’s co-author.

Additionally, his techniques of alleviating poverty are based on experimental research, and for this reason, he is one of the founders of Abdul Latif Jameel Poverty Action Lab. Being interested in alleviating poverty through developing the economy, he has been a member of Innovations for Poverty Actions and Consortium on Financial Systems and Poverty. From their work, Banerjee and his wife, Esther, have won many awards. Besides, he has written several books, including poor economics and Good Economics for Hard Times.

Esther Duflo is also a French-American economist and Banerjee’s wife, born on October 25, 1972. Like Banerjee, his work majors on development economics in alleviating poverty. Most of her contributions to economics are similar to Banerjee’s because of the mutual relationship they have. For instance, she is also a professor at the Massachusetts Institute of Technology and a Latif Poverty Action Lab co-founder. Esther’s research mainly focuses on microeconomics that can help eradicate poverty in developing countries. For instance, household behavior, access to finance, access to good health and education, and policy evaluation. Together with other scholars and his husband, she has been at the forefront in conducting field experiments to establish causal relationships in economics. She has co-authored many books with Banerjee and authored some on her own. Besides, due to her interest in experimental research, she has published many papers concerning poverty eradication. The two authors have contributed greatly to economics, particularly through empirical research, which makes their work more credible to be studied in schools. 

Main ideas and Objectives of the book

The book “Poor economics: a radical rethinking of the way to fight global poverty” main objective is to uncover what the lives and the choices poor people make implies about ways of eradicating global poverty. The book, therefore, presents three major objectives and ideas regarding its area of concentration. The book’s first objective is to help its audience understand why microfinance matter in poverty eradication and how it can do wonders in the process. Often, many people think that fighting poverty involves doing big things for a country. However, Banerjee and Esther have it that it is the small things in the economy that matters. This section effectively achieved this objective by considering several microeconomics that can help in fighting poverty.

The first microeconomic the book mentions are healthcare. It explains why the poor end up receiving healthcare that can harm them instead of treating them. Also, it explains how education can help poor children gain knowledge and hope in life and be motivated to work hard. Besides, the book also talks of health insurance as hope in exploring more opportunities that may seem life-threatening. Generally, the book tries to show how microeconomics leads to more poverty within poor people and how they can eradicate poverty. Instead of focusing on more complex things that may not benefit the poor, alleviating poverty may be more effective if the factors that affect the poor, in this case, microeconomics, are considered.

The second objective is to help the audience understand where hope to fight poverty lies. In this case, it means ways of eradicating poverty. This objective has been effectively achieved by presenting four main ideas. One of the ideas is offering token subsidies to small industries and businesses. The authors have it that token donations may positively impact fighting poverty (Banerjee & Duflo, 2011).  It may be true because supporting small businesses motivates them to target higher goals that eventually help them make more money. The second idea is investing in education. Education has the potential to unlock people’s minds and think of innovative ideas that can generate income. The third idea is about bettering the market insurance. Lastly, the book also points out that good jobs matter for an economy’s growth.

The book’s last objective is to show the audience why hope is crucial and that knowledge is critical when fighting poverty. It asserts that it may be hard to fight poverty, and the challenge may be overwhelming. However, hope keeps people moving and keeping trying every day to make their lives better. Poverty is a process that needs patience, and without hope, it may not be easy to achieve economic stabilization. The authors add that knowledge is critical in this process. Even though there are enough resources to help the poor, it calls for both the person helping and the poor to invest in knowledge, especially in economics. It may involve things like how to use money wisely or resources without exploiting them.

The Context of the Book

The book is written in the implications of the research context. The authors encourage the government to fight poverty by observing how the poor make decisions and what they go through instead of broad generalizations. Researching how the poor make decisions regarding education, healthcare, business, and savings will make major steps in helping them fight poverty. Also, because of the authors’ interest in experimental research, the book’s content is based on different countries’ findings on other continents. The book encourages poverty alleviation through the lens of observation, rigorous testing, and most imperative, listening to what the poor have to say. Whatever they say can be used to make decisions on how to go about fighting poverty. Therefore, the book is set on the implications of empirical research.

Comparison with other Works

If compared with other books, the book is far much contemporary and in time. Unlike other books, the book tries to show what many people do not know about alleviating poverty. For example, many books talk about economics talk of fighting poverty by performing big things. They do not account for the poor people’s ideas or ways of doing things. However, this book is a unique one because instead of encouraging broad generalizations in development, it promotes listening to what poor people have to say, observing their way of doing things, and later focusing on microeconomics.

Strengths and Weaknesses

Since it was published, the book has received many reviews, many of them showing its strengths. One of its strengths is that it is very persuasive. The reviewer has connected this with the authors’ intellectual level through evidence-based research (Eyers, 2011). Another strength is that it mainly majors on the local lives of people. Basically, it talks of what a typical citizen needs to hear, which gives it more popularity. Lastly, the book’s strength also lies in its distinguishing feature of centering its discussion on what has always been ignored- microeconomics. About the weaknesses, the book has not received so many negative comments. However, from goodreads.com, one of the comments rates is disappointing, claiming that the book does not exactly show what works in fighting poverty (Banerjee & Duflo, 2011). Nevertheless, many people have praised it, and it is proof that the book is quality.

References

Banerjee, A., & Duflo, E. (2011). Poor economics: A radical rethinking of the way to fight global poverty (1st ed.). New York: PublicAffairs.

Eyers, J. (2011, August 5). Review – ‘Poor economics: A radical rethinking of the way to fight global poverty, by Abhijit V Banerjee and Esther Duflo – Devpolicy blog from the development policy center [Web log post]. Retrieved from https://devpolicy.org/review-poor-economics-a-radical-rethinking-of-the-way-to-fight-global-poverty-by-abhijit-v-banerjee-and-esther-duflo20110805/