Esther Duflo Quotes

Awareness of our problems thus does not necessarily mean that they get solved. I t may just mean that we are able to perfectly anticipate where we will fall.

The curriculum and organization of schools often date back to a colonial past, when schools were meant to train a local elite to be the effective allies of the colonial state, and the goal was to maximize the distance between them and the rest of the populace.

This is nothing less than a whole new approach to economics. The randomistas don’t think in terms of models. They don’t believe humans are rational actors. Instead, they assume we are quixotic creatures, sometimes foolish and sometimes astute, and by turns afraid, altruistic, and self-centered. And this approach appears to yield considerably better results. So why did it take so long to figure this out? Well, several reasons. Doing randomized controlled trials in poverty-stricken countries is difficult, time consuming, and expensive. Often, local organizations are less than eager to cooperate, not least because they’re worried the findings will prove them ineffective. Take the case of microcredit. Development aid trends come and go, from “good governance” to “education” to the ill-fated “microcredit” at the start of this century. Microcredit’s reckoning came in the form of our old friend Esther Duflo, who set up a fatal RCT in Hyderabad, India, and demonstrated that, all the heartwarming anecdotes notwithstanding, there is no hard evidence that microcredit is effective at combating poverty and illness.13 Handing out cash works way better. As it happens, cash handouts may be the most extensively studied anti-poverty method around. RCTs across the globe have shown that over both the long and short term and on both a large and small scale, cash transfers are an extremely successful and efficient tool.14

Designing financial products that share the commitment features of the microfinance contracts, without the interest that comes with them, could clearly be of great help to many people. A group of researchers teamed up with a bank that works with poor people in the Philippines to design such a product, a new kind of account that would be tied to each client’s own savings targets. This target could be either an amount (the client would commit not to withdraw the funds until the amount was reached) or a date (the client would commit to leave the money in the account until that date). The client chose the type of commitment and the specific target. However, once those targets were set, they were binding, and the bank would enforce them. The interest rate was no higher than on a regular account. These accounts were proposed to a randomly selected set of clients. Of the clients they approached, about one in four agreed to open such an account. Out of those takers, a little over two-thirds chose the date goal, and the remaining one-third, the amount goal. After a year, the balances in the savings accounts of those who were offered the account were on average 81 percent higher than those of a comparable group of people who were not offered the account, despite the fact that only one in four of the clients who had been offered the account actually signed on. And the effects were probably smaller than they could have been, because even though there was a commitment not to withdraw any money, there was no positive force pushing the client to actually save, and many of the accounts that were opened remained dormant. Yet most people preferred not to take up the offer of such an account. They were clearly worried about committing themselves to not withdrawing until the goal was reached. Dumas and Robinson ran into the same problem in Kenya—many people did not end up using that accounts they were offering, some of the because the withdrawal fees were too high and they did not want to have their money tied up in the account. This highlights an interesting paradox: There are ways to get around self-control problems, but to make use of them usually requires an initial act of self-control.

Let’s remake the classroom | The Indian Express This “teaching at the right level” model is straightforward and effective. The process focuses on children currently enrolled in Classes III to V. By Rukmini Banerji and Esther Duflo

Parents are not alone in focusing their expectations on success at the graduation exam: The whole education system colludes with them. The curriculum and organization of schools often date back to a colonial past, when schools were meant to train a local elite to be the effective allies of the colonial state, and the goal was to maximize the distance between them and the rest of the populace.

The gap in performance between private- and public school students was close to ten times the average gap between the children from the highest and lowest socioeconomic categories.

Moira R. Dillon, Harini Kannan, Joshua T. Dean, Elizabeth S. Spelke, and Esther Duflo, “Cognitive Science in the Field: A Preschool Intervention Durably Enhances Intuitive but Not Formal Mathematics,” Science 357, no. 6346 (2017): 47–55.

Recognizing that schools have to serve the students they do have, rather than the ones they perhaps would like to have, may be the first step to having a school system that gives a chance to every child.

Esther Duflo, a leading randomista. ‘Sometimes

Nobel laureates Abhijit V. Banerjee and Esther Duflo put it in their book Good Economics for Hard Times,

In one study in the United States, researchers worked with two sets of questions. One set aimed to solicit respondents’ opinions about migration, the other their factual knowledge of the numbers and characteristics of migrants.5 Those who answered the fact-based questions first, before being asked their opinion (and thus reminded of their own distorted perceptions about migrants) were significantly more likely to be against immigration. When they were told the true numbers, their sense of the facts changed, but not their bottom-line views on immigration. In France, a parallel experiment found something similar. People deliberately exposed to Marine Le Pen’s false claims were more likely to want to vote for her.

Those who buy from the homophobic baker prove that preferences are not stable. Our preferences usually depend on what other people do. Even when our preferences are independent of other people’s actions, the behavior of others can convey a signal that alters our beliefs and our behavior.

...a child who grew up malaria-free earns 50 percent more per year, for his entire adult life, compared to a child who got the disease.

This result suggests that the financial return to investing in malaria prevention can be fantastically high. A long-lasting insecticide-treated bed net costs at most $14 USD PPP in Kenya, and lasts about five years. Assume conservatively that a child in Kenya sleeping under a treated net has 30 percent less risk of being infected with malaria between birth and age two, compared to a child who doesn’t. In Kenya, an adult makes on average $590 USD PPP a year. Thus, if malaria indeed reduces earnings in Kenya by 50 percent, a $14 investment will increase incomes by $295 for the 30 percent of the population that would have gotten malaria without the net. The average return is $88 every year over the child’s entire adult work life—enough for a parent to buy a lifetime supply of bed nets for all his or her children, with a chunk of change left over.

The ladders to get out of the poverty trap exist but are not always in the right place, and people do not seem to know how to step onto them or even want to do so.

A bottle of Chlorin (a brand of chlorine distributed by PSI) costs 800 kwachas ($0.18 USD PPP) and lasts a month. This can reduce diarrhea in young children by up to 48 percent.

When faced with a serious health issue, poor households cut spending, sell assets, or borrow, like Ibu Emptat, often at very high rates: In Udaipur, every third household we interviewed was currently repaying a loan taken out to pay for health care. A substantial proportion of those loans are from moneylenders, at rates that can be very high: The standard interest rate is 3 percent per month (42 percent per year).

When faced with a serious health issue, poor households cut spending, sell assets, or borrow, like Ibu Emptat, often at very high rates: In Udaipur, every third household we interviewed was currently repaying a loan taken out to pay for health care. A substantial proportion of those loans are from moneylenders, at rates that can be very high: The standard interest rate is 3 percent per month (42 percent per year).

When faced with a serious health issue, poor households cut spending, sell assets, or borrow, like Ibu Emptat, often at very high rates: In Udaipur, every third household we interviewed was currently repaying a loan taken out to pay for health care. A substantial proportion of those loans are from moneylenders, at rates that can be very high: The standard interest rate is 3 percent per month (42 percent per year).

Esther Duflo, a professor at MIT with a strong French accent, likens all this research on development aid to medieval bloodletting.6 The once popular medical practice involved placing leeches on patients’ veins in order to rebalance their bodily humors. If the patient returned to health, the physician could pat himself on the back. If the patient died, it was clearly God’s will. Though those doctors acted with the best of intentions, nowadays we realize that bloodletting cost millions of lives. Even in 1799, the year Alessandro Volta invented the electric battery, President George Washington was relieved of several pints of blood to treat a sore throat. Two days later, he died. Bloodletting, in other words, is a case where the remedy is worse than the disease. The question is, does the same apply to development aid? According to Professor Duflo, both remedies certainly share one key feature, which is the fundamental lack of scientific proof.

Others, such as Alan Lightman, or Erez Lieberman, who earned fame by the age of thirty-one through his combination of mathematics and cultural studies, or Esther Duflo, who won a MacArthur “Genius Grant” for her work evaluating anti-poverty programs, didn’t make the cut for the book, but still weigh heavily on my thinking about how to best shape my own career. It

Simple problems beget simple solutions.

This approach is now the focus of a crusading group of economists who have transformed international development over the last decade. They do not come up with grand designs; rather, they look for small advantages. As Esther Duflo, the French-born economist who is at the forefront of this approach, put it: “If we don’t know if we are doing any good, we are not any better than the medieval doctors and their leeches. Sometimes the patient gets better; sometimes the patient dies. Is it the leeches or something else? We don’t know.”6