Almost universal acclaim greeted the award of this year’s Nobel Prize in economics to Abhijit Banerjee and Esther Duflo (jointly with Michael Kremer). It is easy to see why. While their profession is struggling to rebuild its reputation after the 2008 financial crisis, these two MIT economists are idealistic, likeable and admirably productive. That they happen to be married merely adds a pleasant side note to their story of formidable intellectual endeavour.
Duflo in particular is known as the high priestess of randomised controlled trials — experiments testing the effectiveness of specific policy interventions, much as clinical trials do in medicine. At 46, she was the youngest winner of the prize, and only the second woman. Rather than grand theorists, economists should see themselves as plumbers, she says: practical tinkerers interested above all in whether interventions actually work.
The duo’s 2011 book Poor Economics outlined how such experiments can help developing countries improve everything from school enrolment to immunisation rates. Their follow-up, Good Economics for Hard Times, is broader in scope but makes essentially the same argument: cutting-edge economic research can help fix thorny problems, from aiding communities recovering from trade shocks to setting ideal immigration levels.