15 October 2019 04:59

Economics Nobel Memorial Prize in Economic Sciences Esther Duflo

Esther Duflo is only the second woman to win the prize for economics One of the winners of this year's Nobel Prize for economics says she hopes her achievement will inspire other women to take up the subject. Ms Duflo won the prize along with her husband Abhijit Banerjee and Michael Kremer for their "experimental approach to alleviating global poverty". Ms Duflow, who is French-American, said: "Showing that it is possible for a woman to succeed and be recognised for success I hope is going to inspire many, many other women to continue working and many other men to give them the respect that they deserve like every single human being." The Royal Swedish Academy of Sciences said the three economists had created new ways to fight poverty by focusing on smaller, more manageable issues such as education and health. Mr Banerjee and Ms Duflo, who are at the Massachusetts Institute of Technology, worked in India where they set up the Poverty Action Lab, which reorganised public school systems by learning level instead of age or grade. The winner of this year's Nobel economics prize, Esther Duflo, said she hopes her win will "inspire many, many other women to continue working." Speaking at a press conference following the announcement on Monday, Duflo said she also hoped her win might prompt "many other men to give [women] the respect they deserve." Duflo was awarded the prize alongside Abhijit Banerjee, her husband, and Michael Kremer, for their "experimental approach to alleviating global poverty." The gender imbalance among winners reflected a "structural" problem in the economics profession which deterred women from the field at the outset, Duflo said in a later phone interview with nobelprize.org.

"I think the profession is starting to realize the climate and the way we treat each other is not conducive for having more women in the profession," Duflo said, adding that the culture of economic academia was mired in a tradition of aggression and conflict. While she believed this was starting to change with a younger cohort of economists, it was "not happening fast enough," and the field needed to make more progress in showing younger people that it was relevant to the problems they cared about. The book she wrote with Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, won the Financial Times and Goldman Sachs Business Book of the Year award in 2011. People get inspired, change jobs, turn from making machines to making music, quit and decide to wander the world. The rich and the talented step nimbly into the glittering pockets of economic success, but all too many of the rest have to stay back.

And yet, as development economists, we are also keenly aware of the fact that the most remarkable fact about the last forty years is the pace of change, good and bad. In the late 1970s, when Abhijit was taking baby steps towards becoming an economist, the Soviet Union still commanded respect, India was figuring out how to be more like it, the extreme left worshipped China, the Chinese worshipped Mao, Reagan and Thatcher were just beginning their assault on the modern welfare state, and forty percent of the world population was in dire poverty. 'The rich and the talented step nimbly into the glittering pockets of economic success, but all too many of the rest have to stay back,' the authors say In turn, the increase in inequality funded a construction boom that created jobs for the unskilled in the cities of the developing world, paving the way to the reduction in poverty. But it would be wrong to underestimate just how much of the change was driven by policy; the opening up of China and India to private enterprise and trade, the slashing of taxes on the rich in the UK, the US and their imitators, the global cooperation to fight preventable deaths, the prioritization of growth over the environment, the encouragement of internal migration through improvements in connectivity or its discouragement through the failure to invest in livable urban spaces, the decline of the welfare state but also the recent reinvention of social transfers in the developing world, and so on. A lot of that policy stood on the shoulders of good and bad economics (and the social sciences more generally).

Social scientists were writing about the mad ambition of Soviet-style dirigisme, the need to liberate the entrepreneurial genie in countries like India and China, the potential for environmental catastrophe, and the extraordinary power of network connections, a long time before these became obvious to the wider world. Bad economics underpinned the grand giveaways to the rich and the squeezing of welfare programs, sold the idea that the state is impotent and corrupt, and that the poor are lazy, and paved the way to the current stalemate of exploding inequality and angry inertia. Blind economics missed the explosion in inequality all over the world, the increasing social fragmentation that came with it, and the impending environmental disaster, delaying action, perhaps irrevocably. Excerpted from Good Economics For Hard Times by Abhijit Banerjee and Esther Duflo, with permission from Juggernaut Books.