BENGALURU: Esther Duflo had often been called a Nobel Prize-winner-in-waiting. On Monday the American-French economist, who is the co-founder of the Abdul Latif Jameel Poverty Action Lab (J-PAL) and also teaches Poverty Alleviation and Development Economics at MIT, won the prize along with her husband Abhijit Banerjee and Michael Kremer.

The Times of India had an opportunity to speak to Duflo when she was in Bengaluru to deliver the 11th New India Foundation Lecture in late 2017. She spoke on a range of things including MGNRE‘Micro-credit is good if you want to buy a TV set’ GA primary education and micro-credit

Duflo has worked on poverty alleviation in many countries, from Morocco and France and Kenya to Indonesia and most of all, in India. One thing that unites people across all these countries is the very human trait of being impulsive in the present, in the belief that they will be more rational in the future. “The poor are like that, the rich are like that. But the problems these cause manifest themselves in different ways based on how much money you have and the context you are in,” she says. “For example, in a rich countries, this impulsiveness may prevent us to exercise enough. People don't exercise today, because they think they will have more time or more energy later on. In poorer countries, it can manifest in the form of delaying children’s immunization, because there are many other things to take care of today, and things may be different in the future. Again, this varies from country to country. In Kenya, for example, you have an excellent primary healthcare system, which offers incentives to parents to get their kids immunized. It’s very different in India, where the healthcare system is not as regular, and where there are hardly any incentives offered.”

Duflo is used to working with large numbers of people for her “experiments”. “We’ve done some experiments on payment flows for MGNREGA across 3,000 panchayats, a population of about 30 million people,” she says. “We are also working in Haryana on an immunization programme that involves hundreds of thousands of children”.

Duflo has been critical about fads in development economics. “All fads have a kind of cycle. There was the microcredit fad, there have been fads in education – though education is something that we have to keep working on, there’s no choice there,” she laughs. She explains why several recent evaluations have found little transformational impact of microcredit. “Microcredit, as a product, requires the borrower to start repaying immediately, before you have any revenue. If you want microcredit to buy a cow, you will have to start repaying before the cow has calves or starts to give milk. It’s a good product if you have a regular income and you want to buy a TV set, but it is not especially designed to identify the poor who want to start a business. What works better is when the poorest people of a village are identified and given an asset – say two cows – as a gift. Then, for the next year or year and a half, you provide financial and other support, until the family can sustain itself. That model (pioneered by BRAC and implemented in India by Bandhan, an MFI and now a bank) works better,” she says.

Duflo says that it’s hard to talk about the effects of large scale programmes, especially in the area of poverty alleviation: they may work or not but few of the flagship programs have been rigorously evaluated. “However, one great development we have seen in the past few years is the willingness for governments to work with us to evaluate these programmes. For example, we have an amazing partnership with the government of Tamil Nadu and all-in-all we have partnerships with 17 Governments” she says.

On primary education she said: “We’re trying to develop a mathematics curriculum for pre-schoolers. There was a paper published in Science a few months ago, and the idea was to exploit what we know of cognitive science to develop a curriculum that uses the intuitive sense of mathematics that school children have. We’ve just completed a first test of that curriculum in a set of schools run by Pratham (the Pratham Foundation, an NGO that focuses on education). The average size of our school experiment is around 200 schools.”

