NEW ORLEANS, LA — “Does aid work?” Abhijit Banerjee rejects this question. He believes it perpetuates a misguided conversation on global poverty and how people look at development. A professor of economics at MIT, Banerjee researches development economics and economic theory. He coauthored “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” with Esther Duflo.
“Does aid work?” is far too broad a question for discussing international aid and development. With billions of people suffering from food insecurity and other consequences of poverty, Banerjee argues that there is no magic button. The questions, instead, should be: did none of the investment result in the outcome the investor was hoping for? If so, why? Answering such questions introduces a much more nuanced conversation of the impact of international aid.
Banerjee is unafraid to confront the intricacies of aid in his own research on development. Rather than citing certain projects as absolutely a success or a failure, he evaluates aid for results and policy lessons.
In his study, “Read India: Helping Primary School Students in India Acquire Basic Reading and Math Skills,” Banerjee and other researchers worked with Pratham, an educational NGO, to evaluate the educational program Read India in Bihar and Uttarakhand, India. The researchers evaluated Pratham’s work with government teachers, learning materials and volunteer support.
The researchers found a “modest, significant impact on overall reading levels in the villages,” but the program would have been more effective had struggling students been targeted. The success of the program is “noteworthy.”
Discussions of development are too complex to simply label a program good or bad. Each program must be evaluated for its attributes and its effect on a specific community. Instead of asking whether or not the program worked, Banerjee and his researchers asked: was the outcome what Pratham had hoped for? Why or why not?
“Poor Economics” focuses in on this nuanced conversation by investigating patterns of behavior amongst impoverished populations and identifying the implication of this behavior.
Questions such as, “Why do the poorest people in the Indian state of Maharashtra spend seven percent of their food budget on sugar?” or “Why would a man in Morocco who doesn’t have enough to eat buy a television?” litter the book. These are questions Banerjee and Duflo aim to answer in order to fully understand different aspects of global poverty. In order to combat poverty, people must understand it.
Banerjee and Duflo found that what keeps individuals in poverty is not always low income. Instead, it is a combination of low incomes and external factors such as social norms, human behavior and the lack of agency.
Many poor people do not have access to basic information that might open up doors to healthcare or meaningful political participation. This often results in exacerbated health problems, no representation and lack of education. Clearly, combating poverty requires a thorough understanding of its impact and impoverished people’s understanding of aid programs.
In a study on microcredit, Banerjee surveyed 100 neighborhoods. Half of these neighborhoods received credit and the other half did not. In the neighborhoods that received microcredit, he saw a rise in new businesses and economic activity. Yet he did not report any miracles.
According to Banerjee, “a diversity of experience is what you would expect.” Not everyone reacts to aid the same way, so the results will not be uniform. Nor will said results create rapid and extensive change.
Banerjee focuses his energy on measuring the effectiveness of aid on an individual level and identifying the behavioral patterns of the impoverished. He does not question whether or not aid is effective. He questions why it was not as effective for some as it was for others.
The key to understanding the effectiveness of aid, along with large-scale research, is speaking with individuals. Of course, people “make up stories to make life bearable or to cover up the ways we don’t do the things we should do,” Banerjee says. Understanding why people tell certain stories is the key to understanding and engaging in the world. This engagement represents a step towards understanding and combating poverty.
– Tara Wilson