Poverty: Theory and Practice. Contribution of Abhijit Banerjee and Esther Duflo

Abstract

The article is devoted to the theory and practice of combating poverty, starting from G. Myrdal and A. Deaton and ending with A. Banerji and E. Duflo. The population explosion in developing countries exacerbated the problem of poverty, as it contributed to a sharp reduction in mortality and an increase in life expectancy of the population. As a result, many scholars began to study ways and methods to narrow the gap that exists in per capita consumption of the poor and rich countries. A special section is devoted to the experience of Grameen Bank in the use of microcredit to combat poverty in Bangladesh. The works of A. Banerji and E. Duflo took this experience into account, but were not limited to it and found new methods to increase the effectiveness of the fight against poverty. In the center of research of Nobel laureates, not questions of theory, but questions of practice. To this end, they use a randomized trial approach. Since it is very difficult to set up a controlled experiment, scientists are forced to rely mainly on observations. To this end, they compare the results of the control sample with the sample in which the experiment takes place. The focus of their study is the effectiveness of the assistance provided by international organizations to developing countries. In particular, the new Nobel laureates prove that the means to combat poverty must be sought together with the recipients of this assistance. This allows to dramatically increase its effectiveness. As a result, at the end of the XX - beginning of the XXI centuries, certain successes were achieved in this direction as the total number of people living below the poverty line decreased by 750 million people.