Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

Language: English

Pages: 320

ISBN: 1610390938

Format: PDF / Kindle (mobi) / ePub

Why do the poor borrow to save? Why do they miss out on free life-saving immunizations, but pay for unnecessary drugs? In Poor Economics, Abhijit V. Banerjee and Esther Duflo, two practical visionaries working toward ending world poverty, answer these questions from the ground. In a book the Wall Street Journal called “marvelous, rewarding,” the authors tell how the stress of living on less than 99 cents per day encourages the poor to make questionable decisions that feed—not fight—poverty. The result is a radical rethinking of the economics of poverty that offers a ringside view of the lives of the world’s poorest, and shows that creating a world without poverty begins with understanding the daily decisions facing the poor.

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village, including a government school and a few private schools. Those two children had been enrolled at the government school, but they had both run away countless times before their mother abandoned any hope of being able to make them attend. The ten-year-old boy, who was with his mother when we interviewed her, mumbled something about school being boring. Schools are available. In most countries, they are free, at least at the primary level. Most children are enrolled. And yet in the various

letters (in contrast, only 40 percent of those in the comparison villages could read letters by the end of the year). Those who could read only letters at the beginning were 26 percent more likely, by the end, to be able to read a short story if they had participated than if they had not.24 More recently, Pratham has shifted its focus to working with the government school system. In Bihar, India’s poorest state and the state with the highest measured teacher absentee rate, Pratham organized a set

sterilized. People traveling by train without a ticket— a widely accepted practice among the poor until then—were handed heavy fines unless they chose sterilization. Not surprisingly, the pressure occasionally went much further. In Uttawar, a Muslim village near the capital city of Delhi, all male villagers were rounded up one night by the police, sent to the police stations on bogus charges, and sent from there to be sterilized. The policy appears to have achieved its immediate target, although

they have the number of boys they want. This means that girls will tend to grow up in larger families, — 121 — 1586487980-text_Layout 1 2/22/11 9:52 AM Page 122 PO OR ECONOMIC S and many of the girls will be born in a family that really wanted boys. In India, girl babies stop getting breast-fed earlier than boys, which means that they start drinking water earlier and have accelerated exposure to waterborne life-threatening diseases like diarrhea.35 This is mostly the unintended consequence

bank manages to get its money back, things can backfire: Banks do not like headlines associating them with “farmer suicides.” And to cap it all off, when elections are around the corner, governments love to write off outstanding loans. Given all this, it is no surprise that banks find it easier to stay away from lending to the poor altogether, leaving the field to moneylenders. However, although the moneylenders have an advantage in getting their money back, they have to pay a lot more for the

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