Making Aid Work

by Abhijit V. Banerjee

With more than a billion people now living on less than a dollar a day, and with eight million dying each year because they are simply too poor to live, most would agree that the problem of global poverty is our greatest moral challenge. The large and pressing practical question is how best to address that challenge. Although millions of dollars flow to poor countries, the results are often disappointing. In Making Aid Work , Abhijit Banerjee--an "aid optimist"--argues that aid has much to contribute, but the lack of analysis about which programs really work causes considerable waste and inefficiency, which in turn fuels unwarranted pessimism about the role of aid in fostering economic development. Banerjee challenges aid donors to do better. Building on the model used to evaluate new drugs before they come on the market, he argues that donors should assess programs with field experiments using randomized trials. In fact, he writes, given the number of such experiments already undertaken, current levels of development assistance could focus entirely on programs with proven records of success in experimental conditions. Responding to his challenge, leaders in the field--including Nicholas Stern, Raymond Offenheiser, Alice Amsden, Ruth Levine, Angus Deaton, and others--question whether randomized trials are the most appropriate way to evaluate success for all programs. They raise broader questions as well, about the importance of aid for economic development and about the kinds of interventions (micro or macro, political or economic) that will lead to real improvements in the lives of poor people around the world. With one in every six people now living in extreme poverty, getting it right is crucial.

Genres: Economics, International Development, Nonfiction, Politics

170 pages, Hardcover

First published April 1, 2007

About the author

Abhijit Vinayak Banerjee is an Indian economist. He is currently the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology. Banerjee is a co-founder of the Abdul Latif Jameel Poverty Action Lab (along with economists Esther Duflo and Sendhil Mullainathan) and a Research Affiliate of Innovations for Poverty Action, a New Haven, Connecticut based research outfit dedicated to creating and evaluating solutions to social and international development problems, and a Member of the Consortium on Financial Systems and Poverty. He was awarded 2019 Nobel Memorial Prize in Economic Sciences for his experimental approach to alleviating global poverty. He is also the recipient of the inaugural Infosys Prize in the category of Social Sciences (Economics).

Reviews

[Lauryl · Rating 4 out of 5]

Thoughtful, timely, and unsatisfying. It had more questions than answers, and the questions themselves were innovative but not nearly enough. The book might have benefitted from asking What is poverty? What keeps us trying so hard to stop it? How do we do it while still respecting those we're barging in to help? How do we get countries (or communities in our own country) to empower themselves and keep their own programs going? These questions were not only asked but answered in When Helping Hurts by Steve Corbett and Brian Fikkert, which also had a more hopeful viewpoint. Making Aid Work would be an excellent companion work, as it delves more into the science of economics.

[Ben Jaques-Leslie · Rating 4 out of 5]

Two essays by Abhijit Banerjee and a former of other development thinkers. The main thrust of Abhijit's writing is the need for more randomized evaluations in development to understand the inner workings of poverty alleviation.