Poor Economics: Maybe "Modern Family" is Big in Morocco?!

Are people with low incomes also laughing at Modern Family?

Finally, a chance for some uninterrupted reading to complete the excellent "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty" written by MIT professors Abhijit Banerjee and Esther Duflo [@mitecon]. Like most such books, a companion website www.pooreconomics.com and twitter @pooreconomics build on the material which made the book the FT / Goldman Sachs business book of the year 2011, republished in March 2012. The avowed purpose of the award is to select “most compelling and enjoyable insight into modern business issues, including management, finance and economics” reported in Financial Tomes by FT's management editor Andrew Hill in October this year. In 2011, The Economist described the material as "Untying the knot: New ideas about an old problem", flagging the positive effects of a trial once a programme or policy was proven in pilot. The book Poor Economics and its prize attracted positive and negative responses. I am finishing the book in 2012 now during my annual reading sessions in Woodstock VT at year-end in the snow. The findings and arguments are still relevant and thought-provoking. I wonder if/when Bill Gates will read Poor Economics for his top 10 list of "Books That Made Me Think"? Yes, Bill Gates reads and writes book reviews at The Gates Notes... [Update 4 Jan 2013: on further review, Mr Gates posted his review in Oct 2011].

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty is written by academics, but readable. It certainly moves well past cliches of the poor, trying to go beyond the stereotype, and assessing the often complex economic arguments that people with little money must solve for. It describes the problem of assumptions on providing goods to low income people, and especially the promotion of immunization.The opening chapters impressed me for 1. the open-minded approach by researchers with "outside" perspectives, and 2. the aggregation of studies presented in an accessible way. By the time I finish it there will no doubt be more keypoints. The book poses questions and answers like "why would a man in Morocco who doesn’t have enough to eat buy a television? Why is it so hard for children in poor areas to learn, even when they attend school? Does having lots of children actually make you poorer? Answering questions like these is critical if we want to have a chance to really make a dent against global poverty". The book was more recently reviewed in an academic journal the book for how it "brings together recent contributions in development economics that have in common the use of randomized control trials (RCTs), or similar techniques". Of course, these trials can be quite expensive. A critical counterpoint the authors present is that studies that answer the wrong question are useless, and poor studies have great costs when they direct policies doomed to fail.

Also, being able to access Prof Abhijit Banerjee giving a 90min lecture at London School of Economics [@LSE] in March 2012 (#lsepoor) it is great to hear the author's own inflections. The lecture adds more layers to the approach to the research. The lecture is also a classic example of the presenter pivoting (!) on the advertised title of "Poor Economics: Barefoot Hedge-fund Managers, Reluctant Entrepreneurs and the Surprising Truth about Life on less than $1 a Day", as you hear in his opening caveat. Prof Banerjee is currently the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology (MIT), see his bio. There's also a useful interview by FT after the awards in 2011, where its selection was partly reported as being due to "“the potential for the greatest impact”, said one of the judges, Vindi Banga, a former Unilever executive". Prof Duflo is interviewed on NPR's @KQEDForum in 2012 and had Lunch with FT in March 2012.

Poor Economics is solid reading because it builds from the ground up, applying randomized controls to test what is actually happening - see studies map.http://pooreconomics.com/about-book Stories are persuasive. Narratives make compelling cases. But so many stories and theories exist. With so many opinions, whether at your cocktail party or talking heads on TV, facts matter most. Evidence-based research is critical to my work in sustainable investment, the basis we work from in our #ESG work at SinCo. The book for me adds to a better understanding of the realities of investing in frontier markets and how billions try to get by which I most recently read in Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009), still available on Amazon. POTP was written from studies funded by the Ford Foundation, Bill and Melinda Gates Foundation, and Financial Access Initiative. Over 250 families in Bangladesh, India, and South Africa participated in the unprecedented study of the financial practices of the world's poor.

Poor Economics covers many studies. One area of specific current interest is food and nutrition which overlaps with the logic model and design thinking for my work with the Global Alliance for Improved Nutrition (GAIN), Bill and Melinda Gates Foundation and Wellcome Trust. The malnutrition challenge is well explained for the costs it has on economies and society. Our work at SinCo [@SinCoESG] in designing and developing a rating and ranking for the Access to Nutrition Index (ATNI) [@ATNIndex] includes a logic model on getting more nutritious manufactured foods to lower-income populations. Prof Abhijit Banerjee recounts important research and poses questions on why, given more money, how people with low incomes may not choose to buy more nutritious foods or what would be prescribed for them by development agencies. Rather the studies show increases in spending is used on consumables, even entertainment, often because they do not see themselves as undernourished. The authors gained this important insight from a man interviewed in Morocco. Not for the first time, researchers will find poor people with low incomes but have televisions. Even poor people have gaps in their lives where they want to be distracted, informed and made to laugh. Maybe the hit sitcom Modern Family is also big in Morocco?!