Development economists win Nobel Prize for “experimental approach to alleviating global poverty”

October 14, 2019

2019 Nobel Memorial Prize in Economic Sciences awarded to three development economists for their “experimental approach to alleviating global poverty.”

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PEP congratulates Esther Duflo, Abhijit Banerjee and Michael Kremer, three development economists, who won the 2019 Nobel Memorial Prize in Economic Sciences for their experimental approach to alleviating global poverty.

The 2019 Nobel laureates received the prize for their work popularising on-the-ground experiments, particularly randomized control trials (RCTs), to link causes and effects and find out the most effective ways of fighting poverty. Additionally, their efforts have helped convince national governments and international organizations of the merits of evidence-based policymaking.

While neither RCTs nor eradicating poverty are new to research or even economics, the trio radically transformed the study of development economics. Randomization, used frequently in medical sciences before being applied to the social sciences, allows researchers to more easily calculate the causal impact of a program or “treatment” while avoiding biases. 

PEP also welcomes the decision by the Economic Sciences Prize Committee at the Royal Swedish Academy of Sciences to recognize the importance of development economics and impact evaluations for informing policies to tackle poverty throughout the world. 

Canada’s International Development Research Centre (IDRC), one of PEP’s main donors, applauded the news: “The importance of research to guide decision making is critical. Duflo, Banerjee and Kremer have played a significant role in driving this shift and creating the demand for organizations like PEP.”

PEP’s Research Director for Experimental ResearchMaria Laura Alzua, agrees: “This award is excellent news for researchers interested in economic development, and especially for PEP.”

Strong local expertise is the only long-term sustainable solution to ensure evidence-based policymaking in the developing world. For more than 17 years, PEP has been supporting and promoting local researchers to lead projects applying experimental (and other) methods of analysis that identify evidence-based solutions to the development challenges their countries face. 

Like the successful health and education interventions of the Nobel laureates, PEP research experiments have had lasting effects on the local communities. For example, the Nigerian government implemented a new national security scheme, based on the local PEP team’s model and recommendations. Similarly following the findings of a local PEP research team, Mongolia’s Ministry of Labor and Social Protection committed to a vocational training program to tackle youth unemployment and improved access to better target at-risk populations. These research projects were supported by PEP thanks to funding from the IDRC and UK Aid.

“That this research work is done locally is especially important in the case of experimental analyses,” says PEP’s Scientific Advisor, John Cockburn. “Local researchers can better ensure the adequate consideration of the local economic and social context, close monitoring throughout the experimental process, and timely and on-going provision of expertise to advise governments.”

PEP continues to innovate in this area with a current initiative to strengthen impact evaluation capacities in East and West Africa. The Impact Evaluation Mentoring for Governments in East and West Africa initiative aims to reduce the gap between impact evaluation capabilities and demand (from local government and international organizations). PEP is providing support for local researchers conducting impact evaluations (IEs) of government programs as well as technical support to government officials interested in conducting IEs. The Hewlett Foundation funds this initiative. 

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