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Eighty per cent of the world’s 140 million undernourished children lack essential micronutrients

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Edward Miguel of UC Berkeley and J-PAL affiliate assesses the prospects for sustained growth with commentaries from a variety of authors including Rachel Glennerster from J-PAL. In his response, Miguel argues that rigorous evidence on what works is key to improving outcomes in Africa.

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Considered one of the top Indian economists today, Abhijit Vinayak Banerjee , Ford Foundation International professor in economics at the Massachusetts Institute of Technology, is rooted in details. A passionate empiricist, Prof Banerjee co-founded the Abdul Latif Jameel Poverty Action Lab at the institute. Along with his colleagues, he has delved deep into the implementation of the flagship social sector programmes of the government. In particular, they studied delivery of government-sponsored primary education and primary health programmes in Udaipur, Rajasthan and came to some shocking conclusions. In an interview during his recent visit to New Delhi, he overturned conventional wisdom about successes and failures of the government’s social welfare programmes. Excerpts:

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Esther Duflo has been named as one of Foreign Policy's top 100 intellectuals.

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Does going to Mecca make Muslims more moderate?

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The question of whether development aid is effective in fighting poverty has been subject of controversial debates, often based on ideological assumptions. Searching for a general answer is similarly futile than the question whether government expenditures are good or bad: it will depend on how the money is spent. It is therefore important to know which development projects are most effective in fighting poverty.

In recent years, the methods with which such evaluations can be conducted have seen important improvements, through the use of randomized studies, which have been developed and promoted in large part by researchers of MIT’s Poverty Action Lab.

This article describes the randomized evaluation methods, illustrated by studies that allowed detecting large differences in cost-effectiveness between a-priory similarly plausible educational projects and provides a discussion of methodological limits (external validity, etc) and ways to mitigate them.

It concludes that if aid has had mixed results, the reaction should not be resignation, but a reorientation of aid to a more evidence based selection of interventions. If the new approaches were more widely used and had a direct impact on the distribution of the money, the quality of development aid could be increased substantially.

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Eradicating hookworm in the U.S. South brought about dramatic changes. We can do the same in Africa.

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Economists at M.I.T.’s Jameel Poverty Action Lab have found no evidence that paying for a product in the developing world changes how people use it.

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Today's pledge by President Bush to invest $350 million in fighting Neglected Tropical Diseases (NTDs) over the next 5 years is one of the wisest investments we can make in combating poverty around the world. This is particularly true when children are mass treated for common diseases through schools. While development initiatives are often driven by sentiment, school based treatment of neglected diseases is backed by rigorous evidence.

Over 400 million school-aged children are infected with parasitic worms (schistosomiasis and soil transmitted helminthes - two of Bush's neglected diseases) which leave them anemic and listless, and so they often skip school or find it hard to concentrate. Yet they can be treated with safe effective drugs for just 50 cents per year per child. Indeed, the evidence shows that mass treatment for these neglected diseases is both the most cost effective way to increase school participation of any intervention yet rigorously tested and one of the world’s most cost effective ways to improve health. These health and education benefits can have long run benefits on productivity and earnings.

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... Who, in other words, was using economics to make the world a better place?

I received dozens of diverse responses, but there was still a runaway winner. The small group of economists who work at the Jameel Poverty Action Lab at M.I.T., led by Esther Duflo and Abhijit Banerjee, were mentioned far more often than anyone else.

Ms. Duflo, Mr. Banerjee and their colleagues have a simple, if radical, goal. They want to overhaul development aid so that more of it is spent on programs that actually make a difference. And they are trying to do so in a way that skirts the long-running ideological debate between aid groups and their critics.

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While no woman has been president of the United States — yet — the world does have several thousand years’ worth of experience with female leaders

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Professors Banerjee and Duflo's research is cited in this article about the middle class of emerging economies.

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TIME's business and economics columnist, Justin Fox, features Deworm The World event at the World Economic Forum in Davos.

"...This was all the doing of Deworm the World, an initiative that's grown out of research by MIT's Abdul Latif Jameel Poverty Action Lab showing that kids who have taken antiworm medicine are more likely to attend school and do well than their worm-ridden peers..."

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On insecticide-treated bed nets (ITNs), at least. There has been an ongoing battle between Sachs and segments of the global public health community on the appropriate delivery mechanisms for ITNs. The efficacy of ITNs in preventing malaria exposure is not in question. What has been debated is whether ITNs should be distributed free (the Sachs position) or at a positive, albeit subsidized price. Those who favor the latter argue, in part, that charging a fee makes the program more sustainable and that it reduces wastage from giving away the nets to those who do not need or will not use it.
A new randomized experiment carried out by Jessica Cohen and Pascaline Dupas reaches striking and unambiguous results.

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As the United States contemplates the possibility of its first female president, we look at India, which in 1992 mandated a place for women in local governments. Esther Duflo of the Jameel Poverty Action Lab found that women there lead differently than men.

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Measuring the effectiveness of foreign aid.

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- ¿Es positivo dar libros a los niños de países en vías de desarrollo para mejorar su educación?
- Sí, claro!
- ¿Cómo lo sabes?
- Hombre, me imagino que…
- No imagines nada. ¿Es más efectivo que proporcionarles un profesor adicional, o darles desayuno gratuito?
- No lo se… Una cosa no quita la otra…
- Si tienes un presupuesto ajustado sí.
- Pero mejor tener libros que no tenerlos. Yo creo que….
- No creas nada. Es un tema demasiado serio para abordarlo según lo que “creas”. Si tu objetivo es mejorar la educación en un país como Kenia, y dispones de unos recursos limitados, deberías tener muy claro cuál es la forma más eficiente de gastarlos.

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Africa's best hope to fight malaria is the wide distribution of mosquito-repelling bed nets. But who best serves that need: the public sector or private interests?

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Video news feature of the current J-PAL project aimed at reducing police brutality and corruption in Rajasthan.

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The Abdul Latif Jameel Poverty Action Lab at the Massachusetts Institute of Technology (J-PAL) has outlined plans to fight global poverty in continuation of its ongoing efforts.

J-PAL has been fighting global poverty by ensuring that policy decisions are based on scientific evidence. It has now intensified its efforts in realizing its objectives.

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Ideas in economics can sometimes prompt policies that promote the greater good. But ideas motivated by idealism and then pursued with intense commitment are rare. Yet these are the qualities that make Michael Kremer, the Gates Professor of Developing Societies at Harvard University, so special, according to his many colleagues and students.

As Abhijit Banerjee of the Massachusetts Institute of Technology, Kremer's colleague and coauthor, explains: "When most economists come up with an idea that might make the world a better place, they assume that they must have got it wrong, on the grounds that if it were correct it would be in place already, and, reluctantly, decide to forget about it. Michael immediately starts to think of ways to make it happen."

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Dean Karlan, assistant professor of economics at Yale, has been given a Presidential Early Career Award for Scientists and Engineers (PECASE), the highest honor for beginning researchers in the United States.

(...)

According to the award citation, Karlan was chosen “for his outstanding contributions to the fields of behavioral, experimental, developmental and financial economics; and for providing students with hands-on experience in field experiments and international collaborations.”

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A popular approach to 'sustainable development' doesn't work, critics say

THE HOLY GRAIL of international development has long been sustainability - creating markets and institutions that will flourish after Western donors have gone home.

(...)

For the study that appeared in the Quarterly Journal of Economics, the University of California at Berkeley's Edward Miguel and Harvard's Michael Kremer followed 30,000 students in the Kenyan district of Busia. Most of the students were infected with stomach worms, which cause anemia, diarrhea, listlessness, and depression. A Dutch nonprofit group that had been marketing deworming drugs to Kenyans agreed to take part in the experiment. It offered free treatment to students and parents at some schools while charging others subsidized fees ranging from 40 cents per family to $1.30. Both campaigns were combined with efforts to teach people about the dangers of worms

The researchers found that charging a fee for the relevant medicines brought use down from 75 percent in a school to 19 percent - a devastating result.

The economists also found that neither free distribution nor social marketing created the conditions necessary for sustainability: widespread appreciation of the drugs' value. That's partly because of the free-rider effect: Once drug use became somewhat common, even people who hadn't taken the drugs shared in the benefits (because there were fewer sources of infection in the area). Those who were taking the drugs tended to stop, failing to perceive that they and their children were any better off than their neighbors.

Miguel and Kremer's conclusions: Only free, continuous distribution of drugs could maintain the progress against worms and keep people healthy, and goods with broad public benefits are ill-served by markets relying on personal choice.

A recent working paper by Jessica Cohen of the Brookings Institution and Pascaline Dupas of Dartmouth found a similar result for malaria nets in Kenya: Charging pregnant women 75 cents for the nets, a common practice, cut distribution within that population by 75 percent, the economists found - and there was no evidence that women who got free nets were any less likely to use them, challenging a central tenet of the social-marketing worldview.

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MIT's Abdul Latif Jameel Poverty Action Lab (J-PAL) is technically located in Building E60 on the edge of east campus. But J-PAL's real laboratory is a primary school in a sub-Saharan African town, a household kitchen in a home in rural India, an unemployment line in a suburb of Paris-anywhere antipoverty programs are necessary to improve a population's health and well-being.

(...)

To spread its research and promote the use of randomized evaluations, J-PAL organizes courses at MIT and around the world. Last summer, 40 development practitioners from eight African countries traveled to Abuja, Nigeria, to participate in one such course led by economists and graduate students from J-PAL.

"An important weapon in the fight against poverty is good evidence about what works," said Esther Duflo, J-PAL co-founder and co-director and the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics.

"The aim of this course was to build the capacity of others--particularly researchers in Africa--to answer questions about what works and to be able to interpret the often complex evidence about the effectiveness of alternative approaches to reducing poverty."

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Mrs. Blair features J-PAL study “Women as Policy Makers: Evidence from a Randomized Policy Experiment in India” ( Esther Duflo and Raghabendra Chattopadhyay, September 2004), during her speech at the Chatham House.

"For example, in recent years India has enacted laws to promote the participation of women in local government, which now reserve a third of all the full-time positions of head of village council and a third of places on many councils for women. A fascinating study by the Jamel Poverty Action Lab at
the Massachusetts Institute of Technology found that in the reserved councils with women leaders, considerably more investment was made in priorities such as improving water supplies.

Depressingly, however, the research showed that even where women could clearly be seen to be outperforming their male counterparts, the perception of both men and women in the community is that they have done a worse job. The only good news was that the study found that, over time, the performance of women leaders did help tackle this prejudice.

But the overall conclusion reached by the study was that there remains a significant cultural barrier to recognizing women as competent policy makers, which explains why so few women are elected or reelected to unreserved seats at the local level."

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Faced with the multitude of problems that result from and contribute to poverty, how can you decide which strategy to use to tackle an issue? One innovative lab is borrowing ideas from the medical world in a bid to find out.

The Abdul Latif Jameel Poverty Action Lab (J-PAL) is pioneering the concept of randomized trials, more commonly associated with drug safety tests, to assess what works and what doesn't in development and poverty interventions.

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Based at the Institute for Financial Management and Research in Chennai (India), J-PAL South Asia was established in July 2007 due to the growth of J-PAL partnerships throughout South Asia. J-PAL South Asia at IFMR manages the portfolio of projects in the region and works to ensure that the results of these projects translate into action in the region

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It is widely conceded that billions (some say trillions) of dollars in international assistance were wasted in the 20th century. Now the same thing could well happen again.

...nobody knows what works and is sustainable over the longer run. That is in large part because few meaningful efforts are under way to evaluate development projects so that "best practices" can be identified and copied on a cost-efficient basis.

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Narayana Murthy, founder of Infosys Inc. and N. Vaghul, Chairman of ICICI Bank and the Institute for Financial Management and Research (IFMR) helped launch J-PAL South Asia at IFMR on July 13, 2007 in Chennai, India. J-PAL partners from around the region discussed how randomized evaluations had contributed to their work and the role of evidence in improving policy.

The launch received substantial coverage in the media.

English language press
More English press

Tamil language press
More Tamil press

Hindi language press
More Hindi press

J-PAL South Asia website

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Quiz time: So what do hundreds of millions of ordinary schoolchildren around the world possess that American kids almost never get?

Answer: Worms.

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According to the World Bank, close to one billion people around the world live on less than a dollar a day. This despite decades of well-meaning development programs and charitable efforts. A team of economists at MIT says it's time for a new approach -- one that makes prescriptions for poverty as scientifically-based as prescriptions for disease. The World's David Baron has more.

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The noisiest debates on poverty focus on the amount of money that needs to be put to work to help the poor—be it rock star Bono’s campaign to get rich countries to give more aid to Africa or the very public declarations of the Indian government to spend more on education, health and infrastructure to ensure inclusive growth. Unfortunately, these campaigns and policy statements tell us little of value about how money is to be actually spent. Too much money has gone down the drain.

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When you’re lost and running late, it is frustrating to stop and figure out the lie of the land. Nevertheless, that has to be better than speeding off in the wrong direction, however fleetingly satisfying the illusion of activity may be.

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Much aid to developing nations is wasted. Better-designed projects could radically reduce poverty.

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Prof. Esther Duflo’s work can literally save the world.

"I do think it is possible to eliminate world poverty," she says. "Many things can make a big difference in the lives of the poor that can stop this vicious circle. I do believe that people –– and countries –– can grow out of poverty."

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Everyone shares a good deal of cynicism about foreign aid. Taxpayers in developed countries complain that aid is often spent on inflated bureaucracies at home, that it ends up in the Swiss bank accounts of dictators of developing countries, or that it is wasted on useless, if wellintentioned, projects. Governments and citizens in poor countries resent the use of aid as a means of buying political support, their lack of control over it, the development fads to which it is subject, and the administrative burden that accompanies it.

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THIS month the World Bank announced that 986m people lived on the equivalent of less than one dollar a day in 2004—the first time it has counted fewer than 1 billion people in such a parlous state. The bank's definition of extreme poverty is stark, simple and even alliterative. In the latest issue of the Journal of Economic Perspectives, Abhijit Banerjee and Esther Duflo, of the Massachusetts Institute of Technology, describe it as a rhetorical masterstroke. But is it also entirely arbitrary? And how do the poor subsist on such a meagre amount?

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How much do economists really know?
It’s a question worth asking as the forecast season is upon us. Over the next few weeks, hundreds of economists in government, thinktanks and investment banks will run data through their beloved multi-equation regression models, and try to guess how fast the economy will grow during this financial year. Most will predict a continuation of the good times—and for valid reasons, undoubtedly.

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Some of the world’s toughest problems — from poverty to deadly diseases to financial fraud — actually have creative solutions within reach, say nearly two dozen experts on global affairs surveyed by Foreign Policy.

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Poor people may use health products more effectively if they have to pay for them.

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Economists’ framing questions are the same today, but the nature of the answers changed. Since about the 1950s, the norm in economics has been to start from a specific model—a specific set of assumptions about how people make decisions, how technology works, and how markets behave—and to derive, based on mathematical and quasi-mathematical reasoning, predictions about what would happen in a world defined by the model. This has the obvious and immense advantage of making it possible to give some categorical and irrefutable answers to economists’ framing questions, if only within the model’s circumscribed world. For example, one can actually prove that free trade works, or that monetary policy does not, at least under a particular set of assumptions.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=9

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Experts from the World Bank and Ivy League academia called for
cooperation between foreign and Indonesian researchers to find better
and more innovative ways of combating corruption.

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Greetings from Rome, where Italy, Canada, Russia, Norway and the UK, with the World Bank, GAVI and the Gates Foundation, have launched the first Advance Markets Commitment.

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We know how much money the world spends on development aid. What we are less sure of is how much actually reaches its destination and what real impact it has in alleviating poverty. A group of international experts convened by the bbVA Foundation has analysed what works and what doesn’t in this vital area.

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In almost every area of economics, it's hard to disentangle cause and effect. For instance, if you cut tax rates and federal tax revenues decline, is the revenue decline because tax rates are lower -- or did something else drive receipts down, such as an economic downturn that may have led to the tax cut in the first place?

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The MIT International Development Initiative is excited to announce the launch of the inaugural Muhammad Yunus Innovation Challenge to Alleviate Poverty. The Challenge, named in honor of 2006 Nobel Peace Prize winner Dr. Muhammad Yunus, was initiated and also supported by MIT alumnus Mr. Mohammed Abdul Latif Jameel, benefactor of the Abdul Latif Jameel Poverty Action Lab at MIT (J-PAL). Every year the Yunus Challenge will focus on a different problem faced by some of the poorest communities in the world in an effort to bring these problems to the forefront of the academic community.

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MICROFINANCE is based on a simple idea: banks, finance companies, and charities lend small sums — often no more than a few hundred dollars — to poor third world entrepreneurs. The loan recipients open businesses like tailoring shops or small grocery stores, thereby bolstering local economies.

But does microfinance, in fact, help the poor?

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At a time when millions of people each year are still being infected with the virus that causes AIDS, particularly in Africa, a rigorous new study has identified several simple, inexpensive methods that helped reduce the spread of the disease among Kenyan teenagers, especially girls.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=5

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How to fight global poverty—effectively

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Education for all is a popular cause. So popular, indeed, that every decade or two, governments and donor agencies promise to put all the world's children in primary school by some date, normally ten or 15 years hence. In 1990 they set a deadline of 2000. In 2000 they set one of 2015. All that is required, the donors say, is money and will.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=2

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Bill Gates and Warren Buffett want their charitable billions to be spent wisely. So how is the effectiveness of philanthropic aid actually measured?

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Persuading a wealthy donor to match smaller gifts from other people is one of the most popular techniques in fund raising. But charity officials shouldn't spend a lot of time encouraging big donors to offer two or three times as much as other donors give, a new study by economists has found — because doing so won't stimulate any more donations than a dollar-for-dollar match.

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DONORS to charities, it seems, do not behave rationally. Increasing evidence shows that donors often tolerate high administrative costs, fail to monitor charities and do not insist on measurable results — the opposite of how they act when they invest in the stock market.

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Esther Duflo hopes to take the measure of a wide range of anti-poverty programs. Applying scientific methodology, her colleagues and students at the MIT Poverty Action Lab are approaching the projects of well-intended governments and NGO’s (non-government organizations) with a fresh eye. “We have a spotty and scattered idea of the most effective ways to deliver social impact,” says Duflo, so evaluating what works is important.

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A new breed of development economists are using the tools of hard science to put poverty programs under the microscope--and upending a lot of conventional wisdom about what works.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=9

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Dans certains pays en développement, la corruption fait partie de la vie quotidienne, qu'il s'agisse de pots-de-vin pour obtenir un passe-droit ou une autorisation, ou de détournements de fonds publics. Si les affaires retentissantes (les millions de Mobutu, le scandale du programme de l'ONU «pétrole contre nourriture» en Irak) attirent davantage l'attention, cette corruption au quotidien affecte aussi profondément le fonctionnement de la société. Elle est généralement considérée comme une gangrène, mais certains commentateurs y voient un bienfait. Ainsi, Samuel Huntington pouvait-il écrire: «En termes de croissance économique, la seule chose qui est pire qu'une société avec une bureaucratie rigide, trop centralisée, et malhonnête est une société avec une bureaucratie rigide, trop centralisée, et honnête.» Selon lui, la corruption mettrait de l'huile dans les rouages grippés par une réglementation excessive.

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Behavioral economics explains why we procrastinate, buy, borrow and grab chocolate on the spur of the moment.

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Le recenti valutazioni del Civr, Comitato di indirizzo per la valutazione della ricerca, per il settore economia hanno rilevato "(...) una relativa debolezza dei lavori applicati con contenuti empirici (…) [che] difficilmente raggiungono standard internazionali di eccellenza”.

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The depths to which economists go to measure corruption

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=41

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Teacher absence ranges from 20% to over 50% in different states, and makes a mockery of free and universal education. No wonder children drop out in droves, and functional illiteracy is high even for those who complete school. In such circumstances, the government's plan to double spending on education will simply double the waste.

One possible solution comes from Sewa Mandir, an NGO, whose experiment has been analysed in a research paper by two American scholars (Monitoring Works: Getting Teachers to Come to School, by Esther Duflo of MIT and Rema Hagner of New York University) Sewa Mandir runs non-formal schools in hilly, scattered villages of Udaipur district.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=9

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The Rajasthan police have tied up with the prestigious Massachusetts Institute of Technology (MIT) on a project to improve its performance and public perception.

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L'idée d'action «durable» exerce une attraction particulière dans le petit monde de l'aide au développement. La distinction entre les actions «durables» et les autres va bien au-delà du respect de l'environnement, qui est l'acception la plus étroite de l'expression de développement durable. Pour paraphraser le proverbe chinois favori de ce milieu, une action durable vise à «apprendre à un homme affamé à pêcher» pour le nourrir pendant toute sa vie, plutôt que lui donner le poisson qui le rassasiera pour un jour.

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At the start of school every day, the teacher sets the camera to take a snap of himself with his students. At close, the routine is repeated.

Special photography classes? No, it’s just to record evidence that the teacher did indeed attend school.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=9

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Governments and aid organizations spend tens of billions of dollars a year trying to lift the people of developing nations out of poverty through better education, health care and other programs. Evaluating those efforts, however, has proved difficult.

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The Center for Global Development is inviting comments on a new draft report, “When Will We Ever Learn? Recommendations to Improve Social Development through Enhanced Impact Evaluation”. The report seeks to analyze the causes for the under-supply of knowledge about “what works,” and propose a specific set of actions to address that problem by coordinating, improving and funding impact evaluations

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Muhammad Yunus, the Bangladeshi economist who pioneered the microcredit movement, delivers a talk titled "Ending Global Poverty". A video of the talk is available at http://mitworld.mit.edu/video/289/

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Years of mistakes have taught donors a bit about how to spend aid money better.

The dilemmas of distributing bednets illustrate some general problems of aid. Donors muster resources, but they fail to align the incentives of the people providing them or benefiting from them. The grand macro-solutions often neglect the nagging micro-foundations.

The staff of rural schools and clinics, for example, have scant reason to do their job well. A study in Uganda led by Barbara McPake, of the London School of Hygiene & Tropical Medicine, found that in the typical public clinic, 76% of drugs "leaked" on to the private market, more than a quarter of them prescribed to "ghost" patients who did not exist. Donors, Ms McPake points out, would rather subsidise drugs than pay salaries. Hence health workers make their own money by selling the drugs for themselves. If they did not, the clinics might not have survived at all.

Clinics also levied "informal" charges on their patients, sometimes five to ten times the formal rate. Expectant mothers had to pay for the polythene sheet on which they gave birth; afterwards, they had to wash and return it. Patients who could not pay were routinely abused and occasionally assaulted. The authors heard of a newly delivered baby being "confiscated" until payment was made. Not surprisingly, the poor avoid public clinics if they can--which is just as well, because doctors staff them, on average, for fewer than 13 hours a week.

Such problems mostly surprise and appal donors. But they are predictable and systematic. A cadre of economists, such as Michael Kremer at Harvard, Abhijit Banerjee at the Massachusetts Institute of Technology (MIT) and the Bank economists who wrote last year's World Development Report, are busy working out how to solve them. Some have tried to fix these problems by giving nurses, doctors and teachers incentives to do better. Others hope to solve them by giving patients and parents the power to demand more.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=9

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Congress will get what may be its best chance to salvage something constructive from President Bush's misguided push for Social Security privatization this week, when the House tax-writing committee holds hearings on helping Americans save for retirement. Lawmakers ought to thank the president for raising the important issue of retirement security, sidestep his destructive fixation on private accounts and huge benefit cuts, and focus instead on ways to increase savings outside Social Security.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=38

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The 2005 prize for the best young economist

Esther Duflo was chosen by “Le Monde Economie” and Le Cercle des Economistes” (May 17) as one of two young economists to win the 2005 prize. Although it does not claim the same level of prestige, the prize (created in 2000) is inspired by and modeled on the John Bates Clark Medal for the best American economist under 40. It seeks to honor young French researchers who are outstanding both for the quality of their theory and their work on current economic and social problems, thus contributing to economic thought in Europe.

Professor Duflo, 32, received the prize at the Senate in Paris from Thierry Breton, Minister of the Economy, Finance, and Industry. Specializing in development questions, Prof. Duflo was nominated for the prize in 2003. Her success this year recognizes her achievement in creating the Poverty Action Lab, a laboratory setup to fight poverty.

Interviewed by Laurence Caramel Prof. Duflo agreed that the international community had lost some of its momentum in its fight against poverty and that this was partly because of a lack of money and political will but also because of ignorance about the best way of achieving this goal. For example, it is no use having medicines if there are not good ways to distribute them. Similarly, it is vital to evaluate microcredit, in order to have evidence about the effectiveness of this form of finance and to understand the role of increasing ownership by the local population in programs for reducing poverty. Putting more funds into evaluation of projects is, in the long run, the way to gain the support of public opinion and avoid disillusionment about aid.

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AMERICANS save too little. The personal saving rate, currently running at around 0.5% of post-tax disposable income, is at a record low. Poorer people, in particular, have too few financial assets. Fewer than one in three families earning below $40,000 have any retirement savings. And the typical family in this income group has only around $2,000 in non-retirement savings.

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In theory, 401(k) plans and other tax-preferred savings programs can provide a good retirement fund -- if the worker joins up, contributes a substantial chunk of his or her pay, makes the right investment choices and doesn't drop out or tap the account for non-retirement expenses.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=38

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Americans are woefully underprepared for their golden years. According to Peter Orszag of the Brookings Institution, half of households on the verge of retirement have less than $10,000 in savings.

For more details about the project(s) discussed in this article: http://povertyactionlab.org/projects/project.php?pid=38