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Economics Nobel Prize for Work on Easing Poverty

14 October, 2019

The Royal Swedish Academy of Sciences has decided to award the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Abhijit Banerjee, Esther Duflo and Michael Kremer "for their experimental approach to alleviating global poverty". 

CERGE-EI Director Sergey Slobodyan praised that the Nobel Price in Economic Sciences honored the usage of a method that supports evidence based economic policy and also the fact, that there was a woman among the laureates.  

"This year, the Nobel Prize in Economic Sciences honors the powerful usage of a new methodology (randomized controlled trials) to solve the incredibly important problem of poverty alleviation. The work of Banerjee, Duflo, and Kremer is a quintessential example of evidence based economic policy, as opposed to past approaches to development aid which were often based on, at best, incomplete theories, and, at worst, the ideology or political preferences of donors.

In the words of Esther Duflo, “The fight against poverty is based on scientific evidence". Together with last year's prize being awarded to William Nordhaus, this year's prize signifies the Nobel Prize Committee's move to work that seeks to solve problems that directly affect millions of people and to improve human conditions.

The experimental approach deployed by Banerjee, Duflo, and Kremer so effectively allows us to understand the deeper causal roots of poverty and to see how and even why particular policies aimed at development—whether they are aimed at health, credit, or agricultural transformation—work or don't. It also helps to design the most cost-efficient interventions for alleviating poverty, coming back to the very heart of what economics is about.

It is important to note that Esther Duflo was the first woman to be awarded the John Bates Clark medal for the best economist under the age of 40, and is only the 2nd female winner of the Nobel Prize in Economic Sciences. She continues to serve as an inspiration to young researchers who are still selecting the field which will consume their research careers," commented Slobodyan.