I don’t think anyone was surprised by this year’s “Nobel” prize in economics, which went to three American-based specialists in the design of on-the-ground experiments in low income countries, Abhijit Banerjee, Esther Duflo and Michael Kremer. I think the award has merit, but it is important to keep in mind the severe limitations of the work being honored.
The context for this year’s prize is the long, mostly frustrating history of anti-poverty projects in the field of development economics. Much of the world, for reasons I’ll put to the side for now, is awash in poverty: billions of people lack access to decent sanitation, medical care, education and physical and legal protection, not to mention struggling to put food on the table, a roof over their head and cope with increasing demands for mobility. A lot of money has been spent by aid organizations over the years to alleviate these conditions, without nearly enough to show for it. (My specialty, incidentally, has been in child labor, which has been the focus of a large piece of this work.)
There have been various reactions to the lack of progress. One has been to argue that the effort has been too weak—that we need more money and ambition to turn the corner. This is Jeffrey Sachs, for instance. Another is that the whole enterprise is misbegotten, a relic of colonialism that was always destined to fail. You can get this in either a right wing (William Easterly) or left wing (Arturo Escobar) version. (I critiqued the “left” stance on child labor here.) A third is where this Nobel comes in.