Poverty has always been holding mankind from achieving its potential. The inability to maintain the basic levels of survival is still high among 1.85 billion people of the world today. Poverty has been rising faster than the economic policies to eradicate them, even when the rich like Bill Gates, donate most of their incomes to charities. It turns out that just making these physical resources available to the poor, plays very little in uplifting them as has been proven by this year’s Nobel Prize Winners, Abhijit Banerjee, Esther Duflo and Michael Kremer.

Research done through field experiments by these three laureates brought attention and clarity towards what is making the poor, poorer amongst people. The research targeted education, health systems and microcredit systems in developing countries like India and Kenya. By experimenting on a small group of people and drawing conclusions out of them, it helped the researchers find the fault in the system.

In terms of education, they chose schools having the same average characteristics for comparison, in order to eliminate biases or disparities. Schools differ in a lot of ways in terms of students’ family background; whether they are rich or poor, and if there exists a gap between the number of books bought by every student in the class (Nevelius 2). Choosing schools exhibiting similar characteristics made it easy to study and compare. Government schools were chosen first where a greater share of poor children was found. Pupils in these schools were then provided with resources like free meals or more textbooks but at different times in order to observe the effects of this on the students. Results showed that these resources did not make any difference in learning productivity on average, except for those who were already brilliant at studies. Similar experiments to this brought them to the conclusion that the number of resources did not affect literacy, but it was severely affected by the method through which education was being imparted (Nevelius 3). It was the methodology of teaching that was proportional to students’ performance levels which did not fulfil pupils’ needs. Based on these results, the laureates devised a new experiment and studied what happened when tutorial assistance was given to the ‘lower achievers’ of the schools. 

The experiment began in two Indian cities (Mumbai and Vadodara) and moved to different countries like Kenya, Mexico and Ethiopia. It resulted in an improvement in the learning outcomes of these pupils (Nevelius 2). The findings of this experiment led to the core issues of the education system in these low-income countries. The curricula in these educational institutions were not devised to support the needs of the students and there was a high level of absenteeism among teachers and professors.

Provision of healthcare affects poverty levels to a great extent. The pricing of medicines affects its consumption by people below the poverty line. Field experiments found that poor people are highly elastic to the price of medicines. They do not invest in preventive medicines if they think the prices are high but are ready to consume if the government distributes them for free. Also, lower-quality service is one of the biggest reasons for ignorance in the maintenance of health by the poor (Nevelius 4).

Microcredit programmes in the countries were studied by the laureates. Their experiments focused on the poor Indian households in Hyderabad. The field experiments done showed small positive effects of investments in small business. Similar results were found in Bosnia-Herzegovina, Ethiopia, Morocco, Mexico and Mongolia (Nevelius 5).

They observed that people also faced present bias, where they did not make efforts to accept modern technology, and left its comprehension for future considerations.

Results

Recruiting teachers on a contract and offering remedial classes proved to be very effective in some government schools of third world countries. For instance, Delhi government’s recent education scheme “Chunauti” which means challenge, was based on the model devised by these laureates. As per the model, the government hired teachers on short term contracts, installed cameras in classes to monitor student-teacher interactions, held regular compulsory parent-teacher meetings and provided tutorial assistance to pupils. Students being taught by teachers on short term contracts gave better results than those being taught by permanent teachers. “Happy classes” were conducted where students were empowered with focusing techniques (Service). This model has now been used in over 100,000 Indian schools. This educational reform which adapts to the student’s needs is similarly used by many countries today. Improving governance in schools has also proved to be cost-effective as only productive inputs are being used such as demanding accountability and responsibility from the teachers. This has brought a big change in the schools.

Making mobile service clinics available along with onsite doctors was found to be the best temporary fix to provide vaccinations to the poor. As per this model, the vaccination rate tripled amongst various Indian villages (Nevelius 5).

These experiments that were undertaken by Banerjee, Duflo and Kremer, heavily influenced policymaking. WHO recommended the free distribution of medicine to over 800 million schoolchildren. New schemes and programs were implemented in schools all over the world targeting student’s adaptability, there has been a drastic change in the working of both private and government institutions (Nevelius 5).

Students studying at educational institutions in first-world countries are less likely to fall below the poverty line because we are offered tutorial assistance, which helps in effective learning developments among each one us in order to encounter difficulties in life. The education system makes a lot of difference in one’s future. Future job opportunities and standards of living are dependent on the education system. Proper healthcare systems, credit facilities, use of technology and education separates the remaining 70% from living below the poverty line. Field experiments done at the micro-level analysis resulted in discovering a better approach to fight poverty. It can be seen clearly that the human resource is the best resource which can be used to alleviate poverty. Thus, the probability of eradicating poverty is getting closer to 1.

References

Nevelius, Eva. “The Prize in Economic Sciences 2019.” The Royal Swedish Academy of Sciences (2019): 7.

Service, Express News. “Delhi government’s education reform scheme ‘Chunauti’ based on Abhijit Banerjee’s model: Kejriwal.” 14 10 2019. The New Indian Express.