Poor Economics Book Summary - Poor Economics Book explained in key points

Poor Economics summary

Abhijit V. Banerjee and Esther Duflo

A Radical Rethinking of the Way to Fight Global Poverty

4.2 (76 ratings)
16 mins

Brief summary

Poor Economics by Abhijit V. Banerjee and Esther Duflo explores the lives of the poor, offering new insights on poverty alleviation through randomizedcontrol trials and data analysis.

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    Poor Economics
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    Economists seek general solutions to global poverty, but these don’t deal with the problem effectively. 

    It’s a sad fact: poverty causes millions of deaths every year. Equally sad is the fact that we have yet to find an effective solution to this devastating problem.

    One of the reasons might be that economists dealing with the problem tend to look at it in the wrong way, focusing too much on “big” economic questions like, “Do developing countries need more or less help from outside in order to grow?”

    Such general questions tend to generate ineffective debate.

    One camp argues for more development aid to get these countries on track, as they’re not able to do so on their own. Economist Jeffrey Sachs claims that if rich countries would spend $195 billion per year on development aid, in 20 years (i.e., by 2025), poverty would be eradicated.

    Then there’s the other camp, which emphasizes the negative consequences and ineffectiveness of outside interventions, claiming that it’s more helpful to leave developing countries alone.

    Clearly, it’s difficult to come up with a conclusive answer to such a general question. Moreover, debating it does nothing to solve the problem of poverty.

    Of course, some countries appear to prove the effectiveness of development aid. For example, following the Rwandan Genocide, Rwanda received a lot of money and their economy subsequently boomed. However, the situation’s complexity renders it impossible to know for certain whether Rwanda’s success was due to the aid or to other factors.

    Furthermore, a single case isn’t enough to prove a theory’s accuracy: data from over 100 countries suggests that those that had received aid didn’t grow anymore than those that didn’t.

    Both of these arguments are manifestations of an economic reasoning that looks at the problem of poverty in the wrong way. And, in the end, such arguments will not help to solve it.

    Rather than spending time and energy on considering these big questions, it’s more useful to look more closely at specific measures and to evaluate why they do or do not work.

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    What is Poor Economics about?

    Poor Economics (2012) is investigating some of the biggest challenges poor people face. This book provides the reader with an understanding of why there still is so much poverty in the world, and why many of the measures usually implemented do not help. Based on these insights, the authors offer a number of concrete suggestions to demonstrate how global poverty might be overcome.

    Poor Economics Review

    Poor Economics (2011) is a thought-provoking book that delves into the world of poverty and offers a fresh perspective on fighting global poverty. Here's why this book is worth reading:

    • With real-life case studies and extensive research, it provides a deep understanding of the challenges faced by the poor and offers practical solutions.
    • Challenging conventional wisdom, the book uncovers the complexities of poverty and explores the effectiveness of different interventions and policies.
    • By presenting poverty as a multi-dimensional problem, the book keeps readers engaged, ensuring that it is anything but boring.

    Who should read Poor Economics?

    • Anyone who wants to know why global poverty is so persistent and how we can reduce it
    • Anyone interested in development economics
    • Anyone interested in development politics

    About the Author

    Abhijit V. Banerjee and Esther Duflo are both professors of economics at the world-renowned Massachusetts Institute of Technology. For more than 15 years, the two have researched questions of global poverty, spending several months in the field to better understand what needs to be done to combat poverty effectively. This book is the result of their work.

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    Poor Economics FAQs 

    What is the main message of Poor Economics?

    The main message of Poor Economics is that understanding the poor requires studying their lives and behavior up close.

    How long does it take to read Poor Economics?

    The reading time for Poor Economics varies depending on the reader, but it typically takes several hours. The Blinkist summary can be read in just 15 minutes.

    Is Poor Economics a good book? Is it worth reading?

    Poor Economics is worth reading as it offers deep insights into the lives of the poor and presents practical solutions for poverty alleviation.

    Who is the author of Poor Economics?

    Poor Economics is authored by Abhijit V. Banerjee and Esther Duflo.

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