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Around the world, hundreds of millions of people live in extreme poverty. Three economists trying to change that were recognized today with a Nobel Memorial Prize. The three helped pioneer a more rigorous scientific approach to evaluating efforts aimed at helping some of the world's neediest people. NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: When doctors want to figure out the best way to fight a disease, they'll often set up a clinical trial testing one kind of medicine, for example, to see if it works better than a sugar pill. When it comes to fighting poverty, though, aid workers traditionally have not been so meticulous. Esther Duflo says that's been a drawback of even the most well-intentioned efforts.
ESTHER DUFLO: Often, the poor are reduced to caricatures. Even people who try to help them do not actually understand what are the deep root of the problems that are addressing the poor.
HORSLEY: Duflo and her husband, Abhijit Banerjee, who are both economists at MIT, set out to change that. In 2003, they established the Poverty Action Lab, a network of researchers around the world who try to measure what kinds of aid actually help poor people. Programs that work can be scaled up. Those that don't can be scrapped and the money and manpower shifted to other more productive programs.
DUFLO: Let's try and unpack the problem one by one and address them as vigorously and scientifically as possible - what works, what doesn't work and why.
HORSLEY: The committee behind the Nobel Memorial Prize said that approach has reshaped the way governments and nonprofit groups approach poverty. Duflo and Banerjee are sharing the prize with a fellow economist, Michael Kremer of Harvard. Speaking to NPR's Here & Now today, Kremer recalled how he helped organize randomized trials in Kenya decades ago to see if giving poor students more textbooks would help them do better in school.
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MICHAEL KREMER: Course, in some cases, it turns out that things that you thought would work don't work. And it's very important to have that information so that new approaches can be tried.
HORSLEY: Kremer found extra textbooks were little help to students who'd missed classes and fallen behind. But those same students could make big gains if they got some remedial instruction.
As Banerjee told Planet Money back in 2011, their approach is less concerned with sweeping theories of fighting poverty than figuring out what really works on the ground.
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ABHIJIT BANERJEE: We really operate at the level at which much of the actual effective policy discourse operates.
HORSLEY: Duflo is only the second woman to receive the economics Nobel. At a time when the economics profession is doing some soul-searching about how welcoming it is to women, Duflo says she hopes today's recognition will help.
DUFLO: I hope it's going to inspire many, many other women to continue working and many other men to give them the respect they deserve, like every single human being.
HORSLEY: Duflo also suggests the same scientific approach she and others have used to fight extreme poverty in the developing world could be useful in rich countries, as well. Many workers in Europe and America have grown anxious about their place in an increasingly global economy, Duflo said, policymakers need a deeper understanding of how to make their lives better and more meaningful.
Scott Horsley, NPR News, Washington.
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