Marking our second online session, this month’s Book Club was held on the 10th of June. We read the popular book “Poor Economics” by Abhijit Banerjee and Esther Duflo, concentrating specifically on Chapter 10 (Policies, Politics) for majority of the discussion.
In an attempt to generate a more focused dialogue, we introduced a new format which began with a brief presentation on the scope of the book as well as the fundamental areas/questions we wanted to discuss.
The conversation began with a focus on institutions and how much they matter. Considering the institutionalist view of development and determinism, questions were raised on the significance of institutions in bringing about policy change. In the book, Duflo and Banerjee appear to believe that the institutionalist view is far too pessimistic in this context, arguing that good policies can see the light in spite of bad politics. However, the discussion led to a general consensus that institutions do matter a considerable amount in society, touching on the work of Acemoglu and Robinson as well.
The second major area of conversation was on the viability of RCTs (Randomized Control Trials) as a tool of choice for making progress. There were several opinions and questions regarding the place RCTs should hold within the “development toolbox”. After reviewing several RCTs that were conducted, the main commonality appeared to be their inconsistency in terms of results. This led to an interesting notion regarding their significance as a constant reminder that you cannot merely rely on economic theories and statistical analysis; RCTs serve as a medium to deepen our understanding and push us to rethink/reform our expectations. Consensus was reached on the need for a synthesized approach by policymakers, including economic theory, statistical analysis and empathy – in order to understand people’s mindsets in a particular context and predict how they will react.
Several other intriguing points were made throughout the discussion as well, considering concepts such as “positive” and “negative” freedoms, individual tendencies to subvert the “right” choice in many instances and the necessity for external incentives within many social structures.
This session featured a few newcomers and many more thought-provoking insights! If you’d like to join our book club sessions and become a regular member, just drop us an email at info@nightwatchmansociety.org .