Esther Duflo: using economics research to rout out poverty

The financial crisis has given renewed exposure to several schools of economic thought, says The Guardian. "You've heard of the Keynesians, the monetarists, the behaviouralists. Well, now meet the randomistas." Their driving force and poster girl is Esther Duflo, a 38-year-old French dynamo whose brand of "pragmatic idealism" has captured everyone from UN policymakers to hard-headed "philanthropreneurs". As Bill Gates told Duflo at a recent meeting: We need to fund you".

Why "randomista"? It's down to the way Duflo a professor of development economics at the Massachusetts Institute of Technology (MIT) conducts her research, says The New Yorker. Borrowing from medicine, she subjects social-policy ideas to randomised control trials (conducted in villages in India, Ghana and Kenya), in the manner you would test a drug. Her conclusions are often counterintuitive (see below) and are changing the way people think, says Time. More than one billion people live on less than $1.25 a day. Yet very little is known about how they make economic choices and what might help ease their lives. Duflo "is changing that". Tipped to become a future Nobel prize-winner, her intellect has already won her a coveted MacArthur "genius fellowship" in the States. In France she's been hailed as the "new face of Left Bank intellectualism".

Boston-based Duflo, who likes to climb mountains in her spare time, modestly attributes her success to basic curiosity, says The Independent: "I suppose people are asking: Who is this person? What is all the fuss about?'" Yet it was clear from the start that she was going places, says The New Yorker. The daughter of a maths professor and a doctor, she rocketed through the French education system and spent time working in Moscow (in a research post that convinced her that "economics had potential as a lever of action in the world") before emigrating to US academia. Aged 29, she had her pick of Ivy League professorships, including Princeton and Yale. But she chose MIT partly because of its offer to fund a research facility the Poverty Action Lab (J-PAL), which she set up with another MIT professor, Abhijit Banerjee. Together they have just written Poor Economics a summary of their findings set out along the lines of Freakonomics and already make waves in development circles.

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Duflo can come across as guarded even dour, says The Sunday Telegraph; when she smiles "she does it in a slightly suspicious way, as if she fears you might be after her teeth". Asked if she'll be reading economics books on the beach this summer, she replies: "I don't go to the beach. There is no value [in it]". Yet ultimately, it is Duflo's "can do" spirit that singles her out, says The New Yorker. In a profession suffused with gloom, "she subscribes to the optimistic notion that tomorrow might turn out better than today".

Can her hands-on approach change lives?

Esther Duflo is no abstract theorist, says John Lichfield in The Independent. "She investigates, in elaborate detail, the practical, small things which can make a difference in trying to improve the lives of the poorest of the poor." Her work has certainly generated a lot of hype. As one recent profile-writer asked: "Can this woman save the world?"

The question that has long driven Duflo is: why is it so difficult to help people escape from poverty? As she outlined in a recent paper on Foreignpolicy.com, part of the problem is that development economists have fallen into two starkly ideological camps. On the one hand, economists like Jeffrey Sachs argue that hot, infertile, malaria-infested countries are the victims of a classic "poverty trap": they need large investments to tackle endemic problems. But an equally vocal group, led by William Easterley and Dambisa Moya, has argued that aid does more harm than good, since it stifles aspiration and fuels corruption. Duflo's intensive research suggests there is a middle way. Properly targeted aid can make a difference. For instance, tests in different countries show that "people will take de-worming medicine in far greater numbers if you give them a tiny incentive, such as a kilo of beans".

Perhaps her biggest contribution is smashing the myth that the world's poorest behave any differently from the rest of us, says The Sunday Telegraph. "It shouldn't surprise us," she writes, "that the poor choose their foods not mainly for their cheap prices and nutritional value, but for how good they taste." The same is true of material possessions. Duflo cites a man in Morocco who couldn't afford to feed his family yet bought a TV. "It wasn't an impulse buy he'd been saving for months. We have to take that seriously and ask why." The bottom line is that "the poor get bored the same as the rest of us. Their happiness might be as important to them as their health".