Poor Economics Quotes

“poverty is not just a lack of money; it is not having the capability to realize one’s full potential as a human being.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“But then it is easy, too easy, to sermonize about the dangers of paternalism and the need to take responsibility for our own lives, from the comfort of our couch in our safe and sanitary home. Aren't we, those who live in the rich world, the constant beneficiaries of a paternalism now so thoroughly embedded into the system that we hardly notice it?”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“the poor are no less rational than anyone else—quite the contrary. Precisely because they have so little, we often find them putting much careful thought into their choices:They have to be sophisticated economists just to survive.”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“We must arm ourselves with patience and wisdom and listen to the poor what they want. This is the best way to avoid the trap of ignorance, ideology and inertia on our side.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“The point is simple: talking about the problems of the world without talking about some accessible solutions is the way to paralysis rather than progress.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“If the rules make such a difference, then it becomes very important who gets to make them.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“Awareness of our problems thus does not necessarily mean that they get solved. It may just mean that we are able to perfectly anticipate where we will fail.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“It is not easy to escape from poverty, but a sense of possibility and a little bit of well-targeted help (a piece of information, a little nudge) can sometimes have surprisingly large effects. On the other hand, misplaced expectations, the lack of faith where it is needed, and seemingly minor hurdles can be devastating. A push on the right lever can make a huge difference, but it is often difficult to know where that lever is. Above all, it is clear that no single lever will solve every problem.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“there is a strong association between poverty and the level of cortisol produced by the body, an indicator of stress. And”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“A combination of unrealistic goals, unnecessarily pessimistic expectations, and the wrong incentives for teachers contributes to ensure that education systems in developing countries fail their two main tasks: giving everyone a sound basic set of skills, and identifying talent.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“ideology, ignorance, and inertia—the three Is—on the part of the expert, the aid worker, or the local policy maker, often explain why policies fail and why aid does not have the effect it should.”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“For each successful entrepreneur in the Silicon Valley or elsewhere, many have had to fail.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“Talking about the problems of the world without talking about some accessible solutions is the way to paralysis rather than progress.”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“To make matters worse, learning about health care is inherently difficult not only for the poor, but for everyone.33 If patients are somehow convinced that they need shots to get better, there is little chance that they could ever learn they are wrong. Because most diseases that prompt visits to the doctor are self-limiting (i.e., they will disappear no matter what), there is a good chance that patients will feel better after a single shot of antibiotics. This naturally encourages spurious causal associations: Even if the antibiotics did nothing to cure the ailment, it is normal to attribute any improvement to them. By contrast, it is not natural to attribute causal force to inaction: If a person with the flu goes to the doctor, and the doctor does nothing, and the patient then feels better, the patient will correctly infer that it was not the doctor who was responsible for the cure. And rather than thanking the doctor for his forbearance, the patient will be tempted to think that it was lucky that everything worked out this time but that a different doctor should be seen for future problems.This reaction creates a natural tendency to overmedicate in a private, unregulated market. This is compounded by the fact that, in many cases, the prescriber and the provider are the same person, either because people turn to their pharmacists for medical advice, or because private doctors also stock and sell medicine. It”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“The benefits of good nutrition may be particularly strong for two sets of people who do not decide what they eat: unborn babies and young children. In fact, there may well be an S-shaped relationship between their parent’s income and the eventual income of these children, caused by childhood nutrition. That is because a child who got the proper nutrients in utero or during early childhood will earn more money every year of his or her life: This adds up to large benefits over a lifetime. For example, the study of the long-term effect of deworming children in Kenya, mentioned above, concluded that being dewormed for two years instead of one (and hence being better nourished for two years instead of one) would lead to a lifetime income gain of $3,269 USD PPP. Small differences in investments in childhood nutrition (in Kenya, deworming costs $1.36 USD PPP per year; in India, a packet of iodized salt sells for $0.62 USD PPP; in Indonesia, fortified fish sauce costs $7 USD PPP per year) make a huge difference later on.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“There is always some cheap pleasant thing to tempt you.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“The curriculum and organization of schools often date back to a colonial past, when schools were meant to train a local elite to be the effective allies of the colonial state, and the goal was to maximize the distance between them and the rest of the populace.”
― Abhijit V. Banerjee · Esther Duflo, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“the parts of the brain corresponding to the limbic system (thought to respond only to more visceral, immediate rewards) were activated only when the decision involved comparing a reward today with one in the future. In contrast, the lateral prefrontal cortex (a more “calculating” part of the brain) responded with a similar intensity to all decisions, regardless of the timing of the options. Brains that work like this would produce a lot of failed good intentions. And indeed, we do see a lot of those, from New Year’s resolutions to gym memberships that lie unused.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“The poor, on the other hand, may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible, celebrating when occasion demands it.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“After every patient left, the doctor would come outside and make a show of washing his needle with water from the drum. This was his way of signaling that he was being careful. We do not know whether he actually infected anyone with his syringe, but doctors in Udaipur talk about a particular doctor who infected an entire village with Hepatitis B by reusing the same unsterilized needle.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“This is why political institutions matter—they exist to prevent leaders from organizing the economy for their private benefit.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“A friend of ours from the world of high finance always says that the poor are like hedge-fund managers—they live with huge amounts of risk. The only difference is in their levels of income. In fact, he grossly understates the case: No hedge-fund manager is liable for 100 percent of his losses, unlike almost every small business owner and small farmer. Moreover, the poor often have to raise all of the capital for their businesses, either out of the accumulated “wealth” of their families or by borrowing from somewhere, a circumstance most hedge-fund managers never have to face.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“In the slums of Delhi, a study found that only 34 percent of the “doctors” had a formal medical degree.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“Many people would also agree with Amartya Sen, the economist-philosopher and Nobel Prize Laureate, that poverty leads to an intolerable waste of talent. As he puts it, poverty is not just a lack of money; it is not having the capability to realize one’s full potential as a human being.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“More generally, time inconsistency is a strong argument for making it as easy as possible for people to do the “right” thing, while, perhaps, leaving them the freedom to opt”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“the present, we are impulsive, governed in large part by emotions and immediate desire:”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“economic phenomena to show that we think about the present very differently from the way we think about the future (a notion referred to as “time inconsistency”).37 In”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“Good economic institutions will encourage citizens to invest, accumulate, and develop new technologies, as a result of which society will prosper. Bad economic institutions will have the opposite effects. One problem is that rulers, who have the power to shape economic institutions, do not necessarily find it in their interest to allow their citizens to thrive and prosper. They may personally be better off with an economy that imposes lots of restrictions on who can do what (that they selectively relax to their advantage), and weakening competition may actually help them stay in power. This is why political institutions matter - they exist to prevent leaders from organizing the economy for their private benefit. When they work well, political institutions put enough constraints on rulers to ensure that they cannot deviate too far from the public interest.”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

“After the first lot of policyholders universally claimed to have lost their cattle, they decided that in order to claim that an animal had died, the owner would need to show the ear of the dead cow. The result was a robust market in cows’ ears: Any cow that died, insured or not, would have its ear cut off and the ear would then be sold to those who had insured a cow. That way they could claim the insurance and keep their cow. In”
― Abhijit V. Banerjee, Poor Economics: Rethinking Poverty & the Ways to End it

“Generally, it is clear that things that make life less boring are a priority for the poor. This may be a television, or a little bit of something special to eat—or just a cup of sugary tea. Even Pak Solhin had a television, although it was not working when we visited him. Festivals may be seen in this light as well. Where televisions or radios are not available, it is easy to see why the poor often seek out the distraction of a special family celebration of some kind, a religious observance, or a daughter’s wedding. In our eighteen-country data set, it is clear that the poor spend more on festivals when they are less likely to have a radio or a television. In Udaipur, India, where almost no one has a television, the extremely poor spend 14 percent of their budget on festivals (which includes both lay and religious occasions). By contrast, in Nicaragua, where 58 percent of rural poor households have a radio and 11 percent own a television, very few households report spending anything on festivals.33”
― Abhijit V. Banerjee, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty