Esther Duflo One Pager Final

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GLOBEMED’S GLOBAL HEALTH EDUCATION AND LEADERSHIP DEVELOPMENT CURRICULUM

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Notable Quotes:

✦ “If we do nothing, we are on the right track. For most of the poor, if they do nothing, they are on the wrong track”

✦ “It can't only be the data, but there must be data... what the data is going to be able to do--if there's enough of it--is uncover, in the mess and the noise of the world, some lines of music that actually have harmony”

Biography

Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics in the Department of Economics at MIT and a founder and director of the Abdul Latif Jameel Poverty Action Lab (J-PAL), a research network specializing in randomized evaluations of social programs, which won the BBVA Foundation "Frontier of Knowledge" award in the development cooperation category. Duflo is an NBER Research Associate, serves on the board of the Bureau for Research and Economic Analysis of Development (BREAD), and is Director of the Center of Economic Policy Research's development economics program. Her research focuses on microeconomic issues in developing countries, including household behavior, education, access to finance, health and policy evaluation.

Duflo and fellow Professor Abhijit Banerjee released their book “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” in the spring of 2011. Duflo currently serves as the founding editor of the AEJ: Applied Economics.

Major Theories

Duflo approaches poverty from a humble, scientific perspective. Intrinsic to her work is the belief that social policy can be evaluated through controlled experiments and then tangibly improved based on the results. She believes that larger issues, such as whether or not aid is effective, do not have definite answers, but that significant improvements can be made by tackling smaller questions.

Her theories can best be understood by analyzing how she confronts one of these issues: malaria.

Malaria kills almost 900,000 people every year, most of them in Sub-Saharan Africa, most of them under five. In fact, that is the leading cause of under-five mortality. We already know how to stop malaria, but some people come to you and say, ‘You have your millions. How about bed nets?’ Bed nets are very cheap. For 10 dollars, you can manufacture and ship an insecticide treated bed net and you can teach someone to use them. And, not only

Track 2, Week 1

Exploring The Theories Of Esther Duflo

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globalhealthUGLOBEMED’S GLOBAL HEALTH EDUCATION AND LEADERSHIP DEVELOPMENT CURRICULUM

do they protect the people who sleep under them, but they have these great contagion benefits. If half of a community sleeps under a net, the other half also benefits because the contagion of the disease spread. And yet, only a quarter of kids at risk sleep under a net. Societies should be willing to go out and subsidize the net, give them for free, or, for that matter, pay people to use them because of those contagion benefits. "Not so fast," say other people. "If you give the nets for free, people are not going to value them. They're not going to use them, or at least they're not going to use them as bed nets, maybe as fishing nets." So, what do you do? Do you give the nets for free to maximize coverage, or do you make people pay in order to make sure that they really value them? How do you know?”2

She believes that we can answer these questions.

“In Kenya, they went around and distributed to people vouchers, discount vouchers. So people with their voucher could get the bed net in the local pharmacy. And some people get 100 percent discount, and some people get 20 percent discounts, and some people get 50 percent discount, etc. And now we can see what happens. So, how about the purchasing? Well, what you can see is that when people have to pay for their bed nets, the coverage rate really falls down a lot. So even with partial subsidy, three dollars is still not the full cost of a bed net, and now you only have 20 percent of the people with the bed nets, you lose the health immunity, that's not great. Second thing is, how about the use? Well, the good news is, people, if they have the bed nets, will use the bed nets regardless how how they got it. If they get it for free, they use it. If they have to pay for it, they use it. How about the long term? In the long term, people who got the free bed nets, one year later, were offered the option to purchase a bed net at two dollars. And people who got the free one were actually more likely to purchase the second one than people who didn't get a free one. So people do not get used to handouts; they getused to nets. Maybe we need a to give them a little bit more credit.”3

Duflo’s analysis is not limited to malaria. Among other topics, she also discusses issues of education and immunization. Her work is predicated on a belief that randomized, controlled trials can revolutionize social policy. With this approach, you take the guess work out of policy-making and conclusively discover what works and what doesn’t.

1. http://econ-www.mit.edu/faculty/eduflo/short2. http://www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty.html3. http://www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty.html

Resources✦ TED talk: Social Experiments to Fight Poverty: Esther Duflo discusses her unique approach to

developmental economics, and provides some tangible results that support her theories. http://www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty.html

✦ The Poverty Lab: A detailed analysis of the strengths and weaknesses of Duflo’s main economic theories. Discusses Duflo’s views on the best methods to alleviate poverty, as well as her approach to evaluating social policy through controlled experiments. Provides Duflo’s tangible research and conclusions.

http://www.cas.umt.edu/econ/faculty/members/bookwalter/documents/ThePovertyLab.pdf✦ Esther Duflo and Jeffrey Sachs on Poverty: A summary of an interview with Sachs and Duflo, in which they