Graduating from Destitution

Posted in: Comment, News and Updates

A recent Free Exchange column in the Economist was a feature on helping the world's most poor people to help themselves.  It begins:

"THE poor do not just lack money. They are also often short of basic know-how, the support of functioning institutions and faith in their own abilities.  As a result, note Abhijit Banerjee and Esther Duflo of MIT in their book, “Poor Economics” (2004), it takes 'that much more skill, willpower and commitment' for the poor to get ahead.  No wonder escaping extreme poverty – usually defined as living on less than $1.25 a day – is so hard."

It then reports a new paper by Banerjee, Duflo and others that claims to have identified an anti-poverty strategy that works consistently.  Their conclusion is based on a seven-year, six-country study of more than 10,000 poor households.  The secret, it seems, is to hand out assets, followed by several months of cash transfers, followed by as much as two years of training and encouragement.  That formula seems to have made a lasting difference to the lives of the very poorest in countries as different as Ghana, Pakistan and Peru.

If you want to be just a little bit encouraged by all this, you should read the full article, or maybe even the paper.  If you prefer to think that the world's poor will always need the Western handouts that come as Aid, or that we should all be as poor as each other – an equality of misery – then you shouldn't bother.

Posted in: Comment, News and Updates


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