Economists who are awarded the Nobel Prize are generally white men, usually American, distinguished after long academic careers spent exploring complex macroeconomic theories. And then there is Esther Duflo! This fortysomething professor at the Massachusetts Institute of Technology (MIT) is young, the second woman and the fourth French citizen to have won the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” since it was created in 1969. But the greatest difference is found in her research. Like her fellow laureates, Abhijit Banerjee and Michael Kremer, Duflo is an expert in poverty, a field few have studied, and her methods prioritize field work over theoretical research.
“I studied economics because I wanted to give something back to society,” she said in an interview with French newspaper Le Monde in January 2020, a month after receiving – in a blue and red sari – the prestigious prize in Stockholm. As the daughter of a mathematician and a humanitarian pediatrician, Duflo grew up in a Protestant, humanist environment and was a committed member of the Scouts. She was a gifted student and joined the highly selective Ecole Normale Supérieure (ENS) at the age of 19, while simultaneously taking classes at the Paris School of Economics.
On the advice of Thomas Piketty, Duflo then studied in the United States and worked with two stars in the field of development economics, Daniel Cohen and Jeffrey Sachs. But it was her encounter with her PhD advisor, Indian-born American economist Abhijit Banerjee, that had the biggest impact. Working closely together both professionally and personally (they are married with two children), in 2003 they founded what would become the foundation of their work: the Poverty Action Lab.
Evaluating the Effectiveness of Social Measures
Based in Cambridge, Massachusetts, the MIT-backed research center studies poverty by applying experimental methods inspired by randomized control trials in the pharmaceutical industry. To test the effectiveness of social measures (microcredit, the distribution of mosquito nets, free school meals, etc.), the researchers randomly separate a given population into two groups: a test group who will undergo the experiment, and a control group who will not. In comparing the results from both groups, the researchers can identify the most effective measures. In its statement, the jury for the 2019 Nobel Prize insisted that the two MIT economists and their Harvard colleague, Michael Kremer, “have introduced a new approach to obtaining reliable answers about the best ways to fight global poverty.”
This method, which requires field work amongst populations in need, has both revolutionized and divided the world of economics. Many leaders have drawn inspiration from the researchers’ work, such as Barack Obama, who nominated Duflo to the Presidentʼs Global Development Council in 2013. Others have criticized her for only focusing on limited issues without taking into account macroeconomic theories that may resolve poverty on a global scale. However, the economist has rejected this criticism: “When you accumulate data from dozens or even hundreds of experiments, you start seeing a more comprehensive image of how everything works and what needs to be changed,” she said in the interview with Le Monde. “It’s far more effective than developing policy based on broad principles.”
This stance is all the more compelling given that her laboratory trials have involved millions of people over the last twenty years. Renamed J-PAL (the Abdul Latif Jameel Poverty Action Lab, after the name of the father of one of its donors), the center now has a network of 200 researchers in several universities. Together they assess initiatives ranging from campaigns to reduce academic absenteeism in India to programs helping young entrepreneurs in France. More recently, they have studied the impact of messages about Covid-19 aimed at disadvantaged populations in the United States.
Rethinking the Perception of Poverty
Duflo and Banerjee have written a seminal work on poverty and support the introduction of a universal basic income in developing countries. In February 2020, when speaking at the Brooklyn Public Library as part of the Night of Philosophy and Ideas [see video below], Duflo highlighted the “need for dignity” of people in difficulty and the hostility with which they are met: “Our welfare systems are mostly inherited from the Victorian era, when it was believed that anyone who needed help was potentially lazy, dishonest, and therefore not to be trusted. During Victorian times, we imprisoned these people. This is no longer the case, but the idea still remains: If you need help, it’s partly your fault.”
The couple’s latest project is even more vast, aiming to rehabilitate the public image of economists and their work. In a book published just after they won the Nobel Prize, they explain how economic research based on facts and trials can offer solutions to the leading problems of our time, including immigration, climate, automation, and inequalities. The first chapter is entitled, somewhat mischievously, “Make Economics Great Again.”
After becoming a naturalized American citizen in 2012, Duflo recently returned to France with her family. She and her husband agreed to teach at the Paris School of Economics and ENS for the 2020-2021 academic year. Speaking on the TV5MONDE channel last December, she called for a “Marshall Plan” to help struggling countries in which the coronavirus crisis has sparked the worst recession in thirty years. “Wealthy countries have spent thousands of billions of euros and dollars supporting their own economies, which was the right thing to do,” she said. “Unfortunately, they didn’t leave even the crumbs for poorer countries.”
Article published in the May 2021 issue of France-Amérique. Subscribe to the magazine.
