Book review: “Poor Economics”

“Poor Economics” is a pertinent reminder that our assumptions and preconceived perceptions are often wrong and frequently create unintended and undesirable consequences*.  However, “Poor Economics” is not a nagging, accusatory reminder, it is a pleading reminder, a reminder that seeks cooperation and cohesion within the development field. It is also a reminder backed by random sampling and behavioral economics – the two biggest introductions to financial academia since regression analysis.

If you read the same books I do (Or Liesbeth Geerligs honours thesis!), than you will know a good story will actually be more persuasive then a set of statistics**. Thankfully Abhjit Banerjee and Esther Duflo know that, and they have peppered “Poor Economics” with examples and anecdotes to help communicate their message, their reminder.  Here is hoping that the reminder is heard and the small arsenal of positive examples they have documented in the book and on www.PoorEconomics.com helps convince the development world that they need to continue evolving, adapting and improving, especially by discarding preconceived assumptions and perceptions about what poor people need, want and what is best for them.

Adaptation and change is always necessary. Without it, we would still be carbon molecules. Perhaps the change is not the hard part, and as one infamous organisation puts it, perhaps the hard part is recognising there is a problem.

 

Notes:

*Interestingly, on a side note a few smart people at Yale have found that the erroneous use of preconceived ideas in economic policy extends beyond development and developing countries. Their paper discusses the preconceived ideas conceptualised in Japanese economic policy and is available here. Whilst it is an interesting paper, don’t ask me how they determined that the ideas were preconceived or erroneous as my reading of the article failed to find an explanation.

** For example, books such as:

“27 Powers of persuasion” by Christ St Hilaire. Undoubtedly not the original source and original source not cited. Review coming soon, in the mean-time don’t bother buying it.

“Mindfield” by Lone Frank will have cited the original source, as it was one of the first books to make brain science understandable for common folk. Read it if you haven’t already, even though some of the science is probably outdated now.

*** Many thanks to Scott for the extended loan on this book – it shall be returned. Whilst the book is an interesting read it is not exactly cover-cover reading. It requires a little dedication, which I have been lacking.