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Understanding poverty and what to do about it, is perhaps the central concern of all of economics. Yet the lay public almost never gets to hear what leading professional economists have to say about it. This volume brings together twenty-eight essays by some of the world leaders in the field, who were invited to tell the lay reader about the most important things they have learnt from their research that relate to poverty. The essays cover a wide array of topics: the first essay is about how poverty gets measured. The next section is about the causes of poverty and its persistence, and the ideas range from the impact of colonialism and globalization to the problems of "excessive" population growth, corruption and ethnic conflict. The next section is about policy: how should we fight poverty? The essays discuss how to get drug companies to produce more vaccines for the diseases of the poor, what we should and should not expect from micro-credit, what we should do about child labor, how to design welfare policies that work better and a host of other topics. The final section is about where the puzzles lie: what are the most important anomalies, the big gaps in the way economists think about poverty? The essays talk about the puzzling reluctance of Kenyan farmers to fertilizers, the enduring power of social relationships in economic transactions in developing countries and the need to understand where aspirations come from, and much else. Every essay is written with the aim of presenting the latest and the most sophisticated in economics without any recourse to jargon or technical language.
- Sales Rank: #69507 in Books
- Published on: 2006-04-20
- Original language: English
- Number of items: 1
- Dimensions: 6.10" h x 1.50" w x 9.20" l, 1.55 pounds
- Binding: Paperback
- 496 pages
Review
"A serious examination of where we stand and what we need to do."--Nicholas Kristof, The New York Review of Books
"Mass poverty is mankind's oldest, yet still most pressing, problem. Understanding Poverty describes the attack that economists are making to understand it on many different fronts. Every reader of the essays in this superb volume will appreciate the currrent excitement of development economics and the enormous progress it has made in the last two decades."--George Akerlof, Nobel Laureate in Economics, 2001
About the Author
Abhijit Vinayak Banerjee is Ford Foundation International Professor of Economics and Director, Poverty Action Lab at Massachusetts Institute of Technology, where he has taught since 1993. He holds a PhD from Harvard University, an MA from Jawaharlal University, and a BSc from the University of Calcutta.
Roland Bénabou is Professor of Economic and Public Affairs at Princeton University. He holds a PhD in Economics from Massachusetts Instite of Technology and Engineering diplomas from the Ecole Polytechnique and the Ecole Nationale des Ponts at Chaussés in Paris.
Dilip Mookherjee is Professor of Economics at Boston University, where he has taught since 1995. He has also been Director of the Institute for Economic Development there since 1998. He studied Economics at Presidency College, Calcutta, the Delhi School of Economics, and the London School of Economics.
Most helpful customer reviews
5 of 5 people found the following review helpful.
What poverty is all about and what can be done to make it history
By Arne123
Mass poverty is certainly one of the world's most pressing problems: An estimated 1 billion people are trying to subsist on less a dollar a day, another 1.8 billion live on less than two dollars a day. Being poor means not just to be cold and hungry, the poor are also frequently malnourished, illiterate, prone to sickness, crime, unemployment, and depression. Against this background, the three editors of this book, economists at MIT, Princeton and Boston University, have put together a superb collection of 28 essays, written by many of the subject's big shots, which deal with the most pertinent problems related to global poverty. Consequently, the articles cover a wide range of issues: the measurement of poverty, health, education, child labour, reproductive choices, corruption, micro-credit and -insurance, the roles of agriculture and trade, colonial heritages, and much more. Non-economists will welcome that most articles come to the point right in the first sentence and are written in nontechnical, easy-to-read language. But even those already familiar with the big questions of development economics will gain by reading about recent findings in this field. In addition, many contributions have an implicit message for policy makers that shows them how to go about fighting poverty - Kaushik Basu's article on child labour, for example, demonstrates that fining employers for hiring children can actually backfire, resulting in more and not less child labour.
Shortcomings and weak points, there are a few. One of the most heated debates in development economics of the past years, triggered by Dambisa Moyo's Dead Aid and William Easterly's The Elusive Quest for Growth, has been whether foreign aid is actually a useful tool to combat poverty. Regrettably, there is no essay in this volume on the pros and cons of development assistance in general; nor any discussion of which form (grants, credits) it should take. Moreover, an essay on governance issues in general, and in particular on the role of failed states, wars and armed conflict (as highlighted by Paul Collier's The Bottom Billion), could have been useful. Furthermore, some articles miss the target: The essay on Ethnic Diversity and Poverty Reduction, for example, demonstrates how a higher degree of ethnic diversity in a Kenyan district leads to less funding for community goods than in a comparable region in neighboring Tanzania, where ethnicity is of less importance. This is certainly a nice finding, but the link to poverty itself is weak; and, besides, Tanzania has a much higher poverty incidence than Kenya.
On the other hand, I found two articles to be outstanding, if not to say jewels. Esther Duflo's essay Poor but Rational tackles the question to which extent the usual concepts of efficiency and rationality can actually be applied to the poor. She underlines that poverty does not only change the set of options available to individuals (the poor are cut off from many opportunities, such as credit), but that being poor also affects the way people think and decide in many ways. Duflo provides a striking example that illustrates the importance of this issue: Over a number of years, Kenyan farmers in the province of Busia had learned about the effects of fertilizer on agricultural productivity, which in fact had more than trebled harvests. Fertilizer, even in low quantities, was available at affordable prices, as was the possibility to buy it on credit. Still, only a very small and even declining fraction of farmers decided to actually use it - obviously farmers did not behave efficiently. What is needed according to Duflo is a theory of how poverty influences decision-making not only by affecting the constraints, but also by changing the decision-making process itself.
In another highly interesting article on the fundamental causes of poverty, Daron Acemoglu, Simon Johnson and James Robinson take up the institutions versus geography debate. Summarizing earlier and more technical articles, they show that it's definitely institutions that matter. If so many countries located in the tropics are poor today, this is a simple statistical association, not more. But wouldn't tropical diseases, for example, constitute a main obstacle to development? No! Mortality rates in India and West Africa due to tropical diseases were indeed high for European settlers, but not so much for locals due to genetic or acquired immunity. The authors show that in 1500 the globe's temperate areas were generally less prosperous than the tropical areas. What in fact happened around the equatorial belt is that colonizing powers tended to establish institutions that were extractive and elite-oriented. By contrast, settlement colonies would be endowed with institutions of private property, allowing the enforcement of rule of law and of property rights for a broad cross section of society while putting constraints on the actions of elites. The different institutional set-up rather than their geographical location would lead to a slow, but constant relative decline of tropical countries, the "reversal of fortune".
I recommend this book to all those who work in the aid industry (an estimated 500,000 people worldwide), to students who look for additional readings to complement their textbooks, and to all those who would like to have a non-technical overview of the vast field of development economics.
1 of 1 people found the following review helpful.
Ambitious, generally well crafted
By Amazon Customer
I appreciate the editors' effort to summarize recent progress in understanding poverty. Like many academic books with different author for each chapter, the chapters significantly vary in quality and some times do not fit together very well. Nonetheless, this book is better than average, and some chapters are excellent.
Some of the interesting, often inconclusive points: is high fertility a cause or effect of poverty? (some of each), thinking of children as assets (can educate them or have them labor), are the poor rational actors (not always, but we don't understand when/why).
Some very clear policy implications: encourage good institutions, ultimately productivity lifts people out of poverty, so emphasize education, especially for girls, and agricultural productivity because most of the poor are farmers. Also some discussion of the earned income tax credit in the US, which is not well advertised, but surprisingly one of the most effective ways to spend anti-poverty dollars in a developed country.
I would have appreciated another chapter on the future of poverty, and some more enthusiasm for the incredible arc of history that we are living in that has lifted over a billion people out of poverty in the last 50 years.
0 of 0 people found the following review helpful.
Review for Book
By 247collegetextbooks
The book is well written. Also, it is written so even if you don't know much Economic jargon you can follow it closely. Many viewpoints and ideas for solving the problem are suggested and key essays that have direct relevance today are used to support viewpoints.
Moreover, suggestions for the how much and what type of assistance should be given to eventually eradicate the prevalence of this problem is explained in much detail.
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