Professor Esther Duflo was awoken early Monday morning at her Boston home by a phone call informing her that she had won the Nobel Prize in economics. She was sharing the award with two others, including fellow MIT professor Abhijit Banerjee.
She asked the callers if they wanted to talk to Banerjee, which, of course, they did. So Duflo rolled over in bed and handed the phone to him.
The husband and wife researchers, cofounders of MIT’s Abdul Latif Jameel Poverty Action Lab, were presented the prestigious award for their pioneering approach to tackling global poverty. They were named by the Royal Swedish Academy of Sciences along with a third local professor, Harvard University’s Michael Kremer.
“The essence of their work is to make sure the global fight against poverty is based on scientific evidence,” said Massachusetts Institute of Technology president L. Rafael Reif during a press conference on Monday. Instead of relying on abstract theories from the comfort of their classrooms in Cambridge, Duflo, Banerjee, and Kremer conducted field experiments around the world to figure out which policies actually made a difference in the lives of the poor.
At 46, Duflo is the youngest person ever and only the second woman to be awarded the economics prize in the 50 years it has been awarded. And Duflo and Banerjee, who is 58, are the sixth married couple to be awarded a Nobel (the first being Marie and Pierre Curie and another being the Curies’ daughter and her husband).
Traditionally, governments and aid organizations have intervened to help the poor — often in emergency situations such as a famine — without much of a sense of what worked and what didn’t.
The Cambridge professors’ major innovation was to take the sort of research trials that are typically confined to a lab and apply them to knotty problems in the real world. Duflo cited as an example an experiment she and Banerjee conducted in India that showed offering a bag of lentils as a bonus to parents who vaccinated their children greatly improved the immunization rate.
More than 700 million people live in extreme poverty, according to the Royal Swedish Academy, and 5 million children die each year before their fifth birthday, often from diseases that could be prevented or easily cured. That means the stakes for getting interventions right are extraordinarily high.
“If we don’t know whether we are doing any good, we are not any better than the medieval doctors and their leeches,” Duflo said in a 2010 Ted Talk. “You can put social innovation to the same rigorous, scientific tests that we use for drugs. And in this way, you can take the guesswork out of policy-making by knowing what works, what doesn’t work, and why.”
Kremer, Banerjee, and Duflo, who have collaborated, view their research as being “intellectually aligned,” according to MIT.
Kremer, who is 54, was traveling in London on Monday. He told the Associated Press that he has watched economics evolve into a discipline in which researchers engage more with people on the ground and governments to tackle problems once thought intractable.
The Poverty Action Lab today has close to 400 professors affiliated with it, Banerjee said. Its studies range from the quality of schools in Appalachia to governance problems in Indonesia to immunization in India. He said it was wonderful to receive the prize “for the entire movement, a movement we happen to be at the beginning of.”
One of the most intransigent problems that all three researchers focused on was related to education: namely, what type of aid works best to improve schools in poor areas? There were many possible answers, and aid organizations darted from one to another: Perhaps more textbooks would make a difference. Or maybe free meals for students. Could sanitary pads for girls have an effect?
To find answers to those and other questions, Kremer traveled to rural western Kenya in the mid-1990s to conduct a series of carefully designed experiments alongside a local nonprofit. In one study, a school got more teachers. In another, a school received free meals for students. Ultimately, Kremer and his team found that neither change led to better results in the classroom.
A later study led by Banerjee and Duflo in India built on Kremer’s work. By setting up a similarly controlled experiment, they found that teaching assistants who could give more attention to children with special needs had a positive effect on their learning.
Because of the professors’ work, governments and aid groups no longer had to guess which intervention might work best in a local school — they could rely on real evidence. The research resulted in remedial tutoring programs that have reached more than 5 million children in India, according to the Royal Swedish Academy.
The researchers also helped to prove that providing free health care for extremely poor people helps dramatically.
Kremer and other researchers found that less than one-fifth of very poor parents gave their children de-worming pills for parasitic infections when they had to pay, even if the cost was less than $1. But 75 percent of those parents administered the pills when they were free. As a result, the World Health Organization recommends that de-worming medicine be distributed for free in areas with high rates of worm infections. Kremer and Duflo channeled their research into Deworm the World, which supported governments to treat almost 300 million children worldwide in 2018.
“They completely reshaped the way this kind of work is done,” said Jeremy Stein, chair of the economics department at Harvard. “When you think of what the World Bank has done and the way these resources are allocated, they’ve had a pretty profound effect.”
Stein said the fact that Banerjee, Duflo, and Kremer won at such relatively young ages shows their work has had tremendous impact in a short period of time.
Officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the award wasn’t created by the prize founder, but is considered part of the Nobel stable of awards. With the glory comes a $918,000 cash award, a gold medal, and a diploma.
At Monday’s conference, Duflo — who is just the second woman after Elinor Ostrom to receive the Nobel in economics — reflected on the relative lack of women in the field.
“Many women don’t think it’s interesting, that it has to do with finance and very little to do with the problems women care about,” such as health and poverty, she said. But she pointed out the Nobel usually goes to economists who work on exactly those types of social problems.
Banerjee said there is a lot of hope in their field at the moment. “Twenty years ago, if you told someone in government you were going to do a randomized control trial, they would look at you like you’d just escaped from a mental institution,” he said, referring to the type of carefully controlled experiments that he and his colleagues brought to social policy. “Now they ask the right kinds of questions.”