by Pranab Bardhan
As a development economist I am celebrating, along with my co-professionals, the award of the Nobel Prize this year to three of our best development economists, Abhijit Banerjee, Esther Duflo and Michael Kremer. Even though the brilliance of these three economists has illuminated a whole range of subjects in our discipline, invariably, the write-ups in the media have referred to their great service to the cause of tackling global poverty, with their experimental approach, particularly the use of Randomized Control Trial (RCT).
Of course, the Prize as such is not for great policy achievements in poverty reduction (if it were, the Chinese policy-makers enabling the lifting of nearly half a billion people above the poverty line in their country would have got prior attention), but for methodological breakthroughs, which the pioneering effort in extensive application of RCT in field experiments in several poor countries clearly is.
I should also proudly point out that these three economists did some of their major work while they were active members of a MacArthur Foundation-funded international research group on Inequality that I co-directed for more than 10 years starting in the mid-1990’s. Duflo was the youngest member of our group; incidentally, the French speakers (including, apart from Duflo, Thomas Piketty, Philippe Aghion, Roland Benabou, and Jean-Marie Baland) and the Bengalis (apart from myself, Abhijit Banerjee and Dilip Mookherjee) were together nearly half in strength in this group of about 18 members from different countries and social science disciplines.
The media write-ups on the Nobel Prize (including in leading magazines like The Economist), however, give a somewhat misleading impression about the evolution of thinking in development economics, as if after decades of pontification on structural transformation and prudential macro-economic policy and associated cross-country statistical exercises to understand the mainsprings of growth and development, the practitioners of RCT finally came along focusing our attention to the micro level, and providing us with a magic key, the so-called ‘gold standard’ in assessing poverty alleviation policies, telling us what ‘works’ at the ground level of policy intervention and what does not. Read more »