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The Nobel Prize and Anti-Poverty Efforts
The Nobel Prize is an international award that many people recognize and shares its name with Alfred Nobel, innovator and inventor of dynamite, among other things. Somewhat ironically, the Peace Prize given in his name holds the most prestige of nearly any accolade an individual can receive in his or her lifetime, but only constitutes one of the fields in which the committee can award a Nobel Prize. The others, physics, chemistry, medicine, literature and economic sciences, celebrate specific advancements or landmarks in their respective disciplines. The Nobel Prize and anti-poverty efforts have more in common than one might think. The Nobel Memorial Prize in Economic Sciences emerged in 1968, making it the newest of the prizes, but nonetheless important. The 2019 edition went to a trio of Boston, Massachusetts-based economists, two from the Massachusetts Institute of Technology and one from Harvard University, two highly acclaimed and respected academic institutions with cutting edge research capabilities in multiple fields. Abhijit Banerjee, Esther Duflo and Michael Kremer deservingly received the Nobel Memorial Prize in Economic Sciences for their experimental approach in alleviating global poverty, closely tying the 2019 Nobel Prize and anti-poverty efforts. 

Groundbreaking Statistics

Banerjee, Duflo and Kremer form past and present leadership of the Abdul Latif Jameel Poverty Action Lab (J-PAL), a global research center with the goal of reducing poverty by advocating policy formation on the basis of scientific evidence. Beginning in 2003, J-PAL works with governments and non-government organizations to identify and carry out interventions where its data analysis deems them most effective. Using randomized control trials (RCTs) similar to ones used in medical fields as the core of its evaluation, its methods have become widely accepted by the global economic policy community. Over the course of the last 20 years, J-PAL linked 986 randomized evaluations across its affiliates in 83 countries to understand if interventions work or not and allow the numerous social sector organizations who use them to adjust policies and practices accordingly. These interventions focus on a wide variety of issues, such as education deficiency and child health. Its studies can have a profound impact, as over five million Indian children received tutoring as a result of one of the studies, the foundation of its Nobel Prize and anti-poverty efforts.

Economic Masterminds

The Royal Swedish Academy of Sciences attributes its efforts as integral to the evolution of development economics into a flourishing field. The academy, which annually awards each prize, notably made Duflo the youngest economic laureate in its history and only the second woman to receive the prize, making 2020’s Nobel Prize and anti-poverty efforts that much more significant. Just as a landmark, the committee deemed J-PAL’s focus on real-world solutions with economic applications extraordinary, whereas previous awards in the field of Economic Sciences boasted theoretical achievements. Rather than focusing on improving the developing world as a whole through economic theory or answers to macroeconomic questions, J-PAL addresses need at a localized level and introduces practical solutions to tangible problems. Beyond the tutoring in India example, J-PAL tested how eradicating parasitic worms affected school attendance among children, the placement of additional teachers in a classroom or monitoring teachers’ attendance with cameras, how access to bank or microfinance loans can improve living standards and even how voting behavior varies depending on specific appeals made by candidates in an election campaign.

J-PAL vs the World

However, despite objective advancements based on RCTs, people should not view them as unmitigated successes, argues Sanjay Reddy of Foreign Policy Magazine. He notes that these Randomized Control Trials promised to assess whether people benefitted from a change in circumstances simply because they had the motivation or better positioning to fare better from it. In reality, he says, one cannot tell whether these projects or initiatives worked because people took advantage of them or because they just work, though the link between these recipients of the 2019 Nobel Prize and anti-poverty efforts is undeniable.

Reddy’s analysis may seem like splitting hairs, especially against the background of the broader perspective J-PAL’s studies bring. Karla Hoff of the Brookings Institute praises the Nobel Prize and anti-poverty efforts that J-PAL has undertaken for a fundamental shift in the culture of development economics and economic as a whole. In addition to directly helping people most in need, the nonprofit challenged deep assumptions about individuals and the decisions they make, questioning the essence of economic development. It altered many things about the field, including the ways, places and kinds of people economists work with.

Alex Myers
Photo: Flickr

MIT's J-PAL LabOn a busy street in Cambridge, Massachusetts, an unassuming brick building houses the North American headquarters of the Abdul Latif Jameel Poverty Action Lab (J-PAL). Inside MIT’s J-PAL Lab, researchers analyze the results of randomly-designed experiments and the generalizability of their findings. Their test subjects? Social programs.

J-PAL and its Research

Anti-poverty work can take many forms: vocational training, credit access, education and the list goes on. Programs of various types can be valuable and worth funding, but because donors and organizations have limited amounts of funding, the relevant question is often not whether to support anti-poverty work, but how to support it. What programs are making the biggest difference? Where will a donation do the most good?

J-PAL co-founder Abhijit Banerjee puts it best in an interview with The Wire: “you have to basically focus on: where is the lever? That’s what we do, try to help find the lever, and then if you push the lever you go fast. But what [policy-makers] do is often… just hit everything and then some things hit the lever, some things hit the wall.” The strategy of “hitting anything” is certainly not useless, but to maximize impact, a person should concentrate on the mechanisms that maximize impact. J-PAL’s work is in locating the policy levers that will make a difference and encouraging policy-makers to use them.

MIT professors Abhijit Banerjee, Esther Duflo and Sendhil Mullainathan founded J-PAL in 2003 and it has grown quickly. As of 2019, J-PAL has a network of 181 affiliated professors around the world. A truly global organization, J-PAL has offices in Capetown, South Africa; Paris, France; Santiago, Chile; New Delhi, India; and Jakarta, India. J-PAL’s work focuses on researching the results of different cases of anti-poverty action to evaluate what is most effective and advise policymakers accordingly, and educating people about how and when to evaluate social programs.

J-PAL’s Approach

At its base, J-PAL’s approach is simple. Any case of policy-making has results, and by tracking actions and results in a large number of cases, one can determine which are successful and which are not, and therefore which to support in order to produce a maximum impact. Using this data, one can also attempt to predict the policies whose results could potentially be reproduced elsewhere. J-PAL’s methods also emphasize focusing on the mechanisms behind policies and not on specific details of a single scenario. Particular details vary from case to case, but human behavior does show certain patterns; in similar circumstances, policies that have worked before can work again.

J-PAL and its affiliated professors have performed over 900 evaluations and have developed a selection of case studies and other teaching resources to educate people about the analysis of social programs. Every year, J-PAL runs Evaluating Social Programs, a five-day course for policymakers, researchers and nonprofit workers that covers the basics of organizing scientifically sound evaluations and interpreting their results. Close to 50 people attended the 2018 course, which took place at MIT. J-PAL has also made the content of the course available online for free through the online education platform edX, allowing people around the globe to learn from J-PAL’s work. The case studies discussed in the course are also available on J-PAL’s website.

Moving Forward

MIT’s J-PAL Lab has encouraged the scaling up of policies ranging from remedial education in India, deworming in Kenya and community block grants in Indonesia. It also continues to study policy and advocate for effective social policies. The training that it provides for policy-makers allows them to maximize their impact in an economically efficient way. As J-PAL continues to grow, its affiliates will continue to find those levers.

– Meredith Charney
Photo: Flickr