Nobel Prize winners Esther Duflo, Abhijit Banerjee, and Michael Kremer worked together in Kenya in the 1990s. They developed a method for addressing the challenges of global poverty: They broke the challenges down into chunks.
Dealing with one problem at a time, their work has resulted in policy changes that benefit people all over the world. For example, their research led to tutoring for more than 5 million children in India.
Another area of their work is preventive healthcare. The researchers found that 75% of parents would give their children medication for parasitic infections—if the medication was free. But only 18% would give the medication when it had a cost (less than $1). After this finding, the World Health Organization recommended the medication be offered for free to more than 800 million children at risk of getting the parasitic infections.
Microcredit and microloans are more attractive to people when they are offered on a temporary basis, the researchers found. If the credit is available all the time, people are less likely to take advantage of it. Organizations and businesses offering small-dollar loans to clients or employees may have more success if the loans are limited-time only.
Any advances that can be made in better transitioning individuals out of poverty provide more options and support the development of more talent. I am looking forward to reading Duflo and Banerjee’s upcoming book, Good Economics for Hard Times: Better Answers to Our Biggest Problems, to find out how many individuals were able to transition out of poverty using their research and strategies. This is wonderful research and they deserve the honor.