Prize Lecture: Esther Duflo, Prize in Economic Sciences 2019

Transcript

so our next lecture will be given by Esther Duflo she was born in Paris in the early 1970s the daughter of a math professor and the pediatrician so after high school Esther went on today called normal superior with the intention to specialise in history so during a year in Moscow she was supposed to work on her undergraduate essay but she also work... Read More

Summary

Esther Duflo's lecture focuses on field experiments and their impact on policy-making. She discusses how small experiments can lead to large-scale policy changes by providing evidence-based solutions to alleviate poverty. Duflo shares examples of successful projects, such as evaluating the effectiveness of microcredit programs, improving teaching methods, and reforming auditing systems, which have influenced policy decisions and led to significant improvements in various areas.

Questions & Answers

Q: How did Esther Duflo get into economics?

Esther Duflo initially intended to specialize in history but became interested in economics after working as a research assistant to economists in Moscow. Despite initially distrusting economists, Duflo pursued a degree in economics and eventually became an economist herself.

Q: How has Esther Duflo's career been dedicated to alleviating poverty?

Esther Duflo has devoted her career to conducting practical research on poverty alleviation strategies. She uses field experiments to study various interventions and policies, aiming to find the most effective ways to reduce poverty in its different forms.

Q: How has Duflo been successful in influencing policy?

Duflo has been successful in influencing policy by linking researchers with policymakers. Through her organization, Poverty Action Lab (J-PAL), Duflo has formed partnerships with governments, NGOs, and other stakeholders, ensuring that research findings are effectively communicated and implemented at a policy level.

Q: How does the process of policy influence differ from the traditional model of small experiments followed by policy adoption?

The traditional model of small experiments followed by policy adoption is oversimplified. Duflo explains that the process of influencing policy is much more elaborate and collaborative. It involves ongoing dialogue, co-creation, and adaptation to ensure that research findings align with the needs and realities of policymakers and institutions.

Q: What are some common criticisms of the small experiment to policy adoption model?

Critics argue that small experiments may not have the same effects when scaled up, that results may not be generalizable to other contexts, and that no experiment is perfect. They also question the relevance of research findings to policymakers and emphasize the potential for unintended consequences and political reactions when scaling up interventions.

Q: What impact did the evaluation of microcredit programs have on policy and understanding?

The evaluation of microcredit programs revealed that the average effects on poverty reduction were disappointing. However, the analysis also showed that individuals who already had businesses before accessing microcredit benefited significantly. This research shifted the discourse from microcredit being either a disaster or a miracle to exploring how to make microfinance products more effective for different target populations.

Q: How did testing teaching methods lead to policy impact at scale?

Field experiments in developing countries revealed that the prevailing curriculum was not suitable for most students, leading to low learning outcomes. By testing different teaching methods, such as teaching at the right level, researchers found that adapting the curriculum to individual student levels significantly improved learning outcomes. This research informed the scaling up of programs in India and other countries, supported by partnerships with governments and NGOs.

Q: How did the evaluation of a rice distribution program in Indonesia lead to policy change?

The evaluation of a rice distribution program showed that distributing cards to eligible individuals significantly increased program uptake and reduced leakage. The research also identified the most effective card design, with common knowledge, price information, and wide distribution having the greatest impact. Based on these findings, the government scaled up the program, implementing the recommended changes.

Q: How did Duflo's team address the conflict of interest in auditing firms?

The team identified a conflict of interest in the auditing of firms when firms themselves hired auditors, leading to biased results. They proposed a new system where auditors were randomly assigned and paid based on their accuracy, breaking the link between firms and auditors. This proposal was adopted at a state level in Gujarat, leading to more accurate audits and curbing pollution.

Q: How does Duflo envision the role of researchers in policy-making in the future?

Duflo envisions researchers making themselves less relevant over time by fostering a culture of learning within governments and institutions. She believes that if the culture of evidence-based decision-making becomes widespread, many actors will engage in learning and policy influence, making research less necessary for creating positive change.

Takeaways

Esther Duflo's lecture highlights the power of field experiments in influencing policy and alleviating poverty. She emphasizes the importance of ongoing collaboration, co-creation, and adaptation between researchers and policymakers to ensure effective policy implementation. By conducting rigorous evaluations and providing evidence-based solutions, researchers can make significant contributions to policy decisions that positively impact people's lives. The ultimate goal is to foster a culture of learning where policymakers and institutions value research and prioritize evidence-based approaches to address complex social problems.