Abhijeet Banerjee, Esther Duflo, and Michael Kremer have been announced as the winners of Nobel prize 2019 in economic sciences, formally referred to as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, for their experimental approach to alleviating global poverty.
The laureates have shown how global poverty can be ameliorated by breaking it down into smaller, manageable and precise questions at individual/group levels, running randomized control trials to measure specific outcomes.
Randall Kroszner, former fed governor and schoolmate of Abhijeet Banerjee on Bloomberg markets and finance says that the wonderful trio has paved their magnum opus by means of such path-breaking reforms in the field of development economics over a span of two and a half decades converting it into a remarkably significant field of research and analysis. This could be accomplished because the salient features of the economists’ work ethic include systematically organizing real data and dwelling on the psychological and empathetic concepts of economics as a discipline and not just merely treating the people’s information as variables in a petri dish.
By carefully noting that productivity differs between rich-poor countries and also within poor countries Mr. Banerjee and Ms. Duflo have drawn neat inferences about the economic mechanism at the micro-units to integrate them into apt outcomes at the macro level
They focused on how some companies use latest technologies while others use outdated means of production and arrived at long term solutions for rural troubles
In the 1990s Michael Kremer and his team improved school results in western Kenya with field experiments to test a range of interventions.
Mr. Banerjee and Ms. Duflo soon performed various experiments in other countries with Kremer and as a direct result of one of their studies, over 5mn Indian children have benefited from remedial tutoring in schools. Another example is the heavy subsidies for preventive health care that have been introduced in many other countries definitely rejuvenating the face of human resource development in the nation. Every year, five million children still die before their fifth birthday, often from diseases that could be prevented or cured with relatively cheap and simple treatments.
Governments across the world, elected over other social verticals than economics, fail to understand the highly complex yet concrete economic phenomena and end up spending big money on schemes that die infructuous. The fieldwork-based approach of these economists has upped the ante and crossed the rubicon hurdle of such a robotic outlook towards the society and established foundations for smooth application of relevant economic philosophy in policymaking.