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.