Esther Duflo’s projects are all over the map, conceptually as well as geographically: India, Ivory Coast, Russia, Indonesia and South Africa are among the locales; retirement plans, the software industry, women and policy decisions, and schooling and the labor market are among the assorted topics.
The French-born Duflo had no clue she wanted to engage in development economics before she arrived at MIT in 1995 to pursue her doctoral studies, straight from the Ecole Normale Supérieure in Paris. “I wanted to be useful and save the world. When studying in France, I thought economics was dry and didn’t address the questions I was interested in, she says. One development economics class at MIT quickly disabused her of that notion. In the decade since, Duflo has gained her Ph.D. and catapulted into a full professorship at MIT.
The position offers her a springboard to pursue the overriding question driving her work: Why do the world’s poor stay poor? “It’s the broad motivation for all I do,” says Duflo, who received the Elaine Bennett Prize for Research in 2003 and was nominated the same year for the Best Young French Economist Prize. Duflo focuses on the substantial disparity between “what people do and what we as economists think they should do” as a first step in designing specific, grass-roots recommendations for interventions. Helping the poor, she says, is “unambiguously the most important and interesting question in economics.You can think about how to help very rich people make a little bit more money by improving the efficiency of tax collection. Or you can think about how to improve income and quality of life in Mali, where people are making $240 per capita a year. The potential for improvement is enormous.”
RESEARCHERS HONE IN
Central to her approach, and that of a new cadre of young development economists, is randomized experimentation — much like in the world of medicine, where researchers hone in on the impact of a particular variable. For example, will textbooks make a difference to children’s learning? “To know whether textbooks help children learn better, a policy maker needs to know what difference it will make if books are put in, not what’s the difference between schools with and without textbooks,” she explains. “In the real word there are many other reasons why schools with and without textbooks may be different. My research tries to provide the conditions under which you can make reliable comparisons.”
Duflo’s disparate studies keep her close to the energetic frontlines of non-governmental organizations (NGOs), while providing a “two-step distance to see if their ideas are any good. Tons of money is being spent on programs by governments and NGOs, and most of the time there’s no evaluation to determine whether the programs work.”
Duflo has been a major force in bringing rigor, precision and concreteness to randomized evaluations of policy and programs. “People never used to do randomized evaluations of policy programs. It was always referred to as the ‘gold standard,’ but nobody actually did it. The revolution [in the world of economics] is that it’s no longer the gold standard. It’s the standard,” she says, adding, “If you’re in the business of telling people how to do things better, you better make sure it’s true.”
This approach points to an equally important feature of Duflo’s M.O. — her emphasis on changing, not just studying. “It’s why I came to development economics, to make things better. This isn’t true of all economists; in fact, there’s a strong tradition of not being normative in economics. I’m definitely on the normative side. I believe economic theory can help us identify how to design policies that will help solve the failures of the market — for example, help people obtain credit or get better quality education. And then I believe these ideas need to be tested, by implementing them and evaluating them rigorously. In this way we learn about the theory at the same time that we learn how to design better policies. This is my activism — geared to telling people they need to evaluate their programs.”
Towards this end, Duflo co-founded the MIT Poverty Action Lab, along with MIT economist Abhijit Banerjee and other leading economists. Aimed at scientifically evaluating key policy questions, the Lab has studied how computer assisted learning effects the performance of poor, grade-school children in India; the impact of women village leaders on political decision-making; and the most effective policy to reduce the spread of AIDS, among other research projects. In addition to supporting these diverse studies, the Lab helps disseminate their results to the policy world.
To gain added insights into these and other issues, Duflo finds the MIT Economics Department a good source for multiple viewpoints. “People here are very intense about research. They’re interested in more than one field, so you can have conversations from diverse areas –– whether it’s mathematical theory, econometrics, or applied economics. It enriches the perspective and keeps the energy level high.”
Duflo’s energy gets its biggest boost, however, in the field. “I came to development economics hoping to help change the world. I get more of a sense of that when I’m actually there, confronting the situation on the ground,” she says. “It’s essential to me. It’s where I’m happiest.”