Authors: Abhijit V. Banerjee and Esther Duflo
Genre: Non-fiction, Economics, Development Studies
Ideal for: Readers interested in global development and poverty
Some books open your eyes. Others change the way you think. Poor Economics does both. Written by Nobel Prize–winning economists Abhijit V. Banerjee and Esther Duflo, this groundbreaking book dives deep into one of the world’s most urgent questions: why does poverty persist, and what can be done about it?
Far from being a dry academic text, Poor Economics is an engaging, story-rich exploration of human behavior, decision-making, and the complicated systems that shape lives across the globe. It’s not about abstract theories or grand gestures—it’s about listening, observing, and understanding the daily realities of the poor. In doing so, Banerjee and Duflo challenge stereotypes, debunk common myths, and bring a refreshing sense of humanity to the economics of poverty.
By the end of the book, you realise this isn’t just a study of economics—it’s a study of people. And that’s what makes it unforgettable.
A Different Kind of Economics
Traditional economics often paints with broad strokes, simplifying human behavior into neat models. But Banerjee and Duflo argue that poverty doesn’t fit into those clean lines. Instead, poverty is messy, full of contradictions, and deeply influenced by context.
Take, for instance, the question of why poor families sometimes make decisions that seem “irrational” to outsiders—like spending on festivals instead of healthcare, or choosing loans with high interest rates. The book doesn’t dismiss these choices as foolish; instead, it digs deeper. By listening to the people behind those decisions, Banerjee and Duflo show us that these choices often make sense within the realities of scarcity, uncertainty, and social pressures.
This approach—the willingness to understand people as they are, rather than as abstract actors in a model—is what sets Poor Economics apart. It’s not just theory; it’s empathy backed by rigorous research.
Storytelling Meets Science
What makes this book especially compelling is its storytelling. Each chapter is grounded in real-world examples, from rural villages in India to urban slums in Kenya. Through vivid anecdotes, Banerjee and Duflo introduce us to individuals and families, making the numbers and data come alive.
For example, the book highlights the story of farmers who reject free fertiliser, not because they don’t want better yields, but because the timing of their income and expenses makes it difficult to plan ahead. It’s a simple but powerful reminder: poverty is not just about having less money; it’s about living in an environment where every decision carries enormous risk.
These stories are paired with field experiments—randomised controlled trials—that test small but practical interventions, like offering deworming pills in schools or providing bed nets for malaria prevention. The findings are often surprising, sometimes counterintuitive, but always illuminating.
The magic lies in this balance: rigorous research on one hand, human-centered storytelling on the other.
Debunking Myths About Poverty
One of the most impactful aspects of Poor Economics is how it dismantles common assumptions about poverty.
“The poor don’t save.” In reality, many poor households do save—but in small amounts, and often in ways that aren’t secure or accessible. The problem isn’t a lack of discipline, but the absence of reliable financial systems. “The poor don’t value education.” Banerjee and Duflo show that families do care about education, but structural barriers—like poor-quality schools or the absence of role models—can diminish its perceived value. “Aid doesn’t work.” The book reveals that aid can work when it is specific, evidence-based, and tailored to local needs, rather than imposed as one-size-fits-all solutions.
These insights don’t just challenge policymakers; they challenge us, as readers, to rethink the way we view poverty and those living in it.
A Human Lens on Development
What struck me most while reading Poor Economics is the respect with which Banerjee and Duflo approach their subjects. The poor are not portrayed as passive victims or faceless statistics. They are individuals with dreams, constraints, and rationalities shaped by their environment.
This human lens makes the book more than just a collection of studies—it makes it an act of empathy. You’re reminded that behind every policy debate or development program are millions of real lives, each shaped by complex factors we cannot reduce to numbers alone.
Why This Book Matters
In a world where conversations about poverty are often dominated by sweeping claims—whether from politicians, NGOs, or armchair economists—Poor Economics offers something rare: nuance.
Banerjee and Duflo don’t claim to have all the answers. Instead, they argue for humility, experimentation, and listening. Poverty is not one problem with one solution; it is many problems that require many solutions, tested and adapted in context.
This mindset is not only refreshing but also hopeful. It suggests that change is possible—not through grand revolutions, but through small, evidence-based steps that make real differences in people’s lives.
Why I Loved It
Reading Poor Economics felt like being guided by two brilliant but humble teachers who are more interested in asking the right questions than in showing off the right answers. The writing is accessible, the stories are gripping, and the insights are both intellectually stimulating and emotionally moving.
It’s a book that makes you think about the world differently, but also makes you want to act differently—to listen more, to judge less, and to believe in the power of small, thoughtful changes.
Final Thoughts
Poor Economics is not just a book—it’s a wake-up call. It asks us to stop oversimplifying, to start listening, and to approach poverty with curiosity and humility rather than judgment.
Banerjee and Duflo show that solutions exist, but they may not be the ones we expect. They may not be glamorous or headline-grabbing, but they are real, practical, and rooted in the lived experiences of the poor.
This is why I give Poor Economics five stars without hesitation. It’s a book that challenges, teaches, and heals all at once. More than that, it’s a book that matters.
