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Winner of the 2011 Financial Times/Goldman Sachs Best Business Book of the Year Award Billions of government dollars, and thousands of charitable organizations and NGOs, are dedicated to helping the world's poor. But much of their work is based on assumptions that are untested generalizations at best, harmful misperceptions at worst. Abhijit Banerjee and Esther Duflo have pioneered the use of randomized control trials in development economics. Work based on these principles, supervised by the Poverty Action Lab, is being carried out in dozens of countries. Drawing on this and their 15 years of research from Chile to India, Kenya to Indonesia, they have identified wholly new aspects of the behavior of poor people, their needs, and the way that aid or financial investment can affect their lives. Their work defies certain presumptions: that microfinance is a cure-all, that schooling equals learning, that poverty at the level of 99 cents a day is just a more extreme version of the experience any of us have when our income falls uncomfortably low. This important book illuminates how the poor live, and offers all of us an opportunity to think of a world beyond poverty. Learn more at www.pooreconomics.com

Foreword vii 1 Think Again, Again 1 Part I Private Lives 2 A Billion Hungry People? 19 3 Low-Hanging Fruit for Better (Global) Health? 41 4 Top of the Class 71 5 PakSudarno's Big Family 103 Part II Institutions 6 Barefoot Hedge-Fund Managers 133 7 The Men from Kabul and the Eunuchs of India: The (Not So) Simple Economics of Lending to the Poor 157 8 Saving Brick by Brick 183 9 Reluctant Entrepreneurs 205 10 Policies, Politics 235 In Place of a Sweeping Conclusion 267 Acknowledgments 275 Notes 277 Index 295

Abhijit Vinayak Banerjee is the Ford Foundation International Professor of Economics at MIT. He is the recipient of many honors and awards, including most recently the inaugural Infosys Prize in 2009, and has been an honorary advisor to many organizations including the World Bank and the Government of India. Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT. She is a recipient of the MacArthur “genius” award (2009) and the John Bates Clark medal awarded annually to the best American economist under forty (2012). In 2003, Banerjee and Duflo cofounded the Abdul Latif Jameel Poverty Action Lab (J-PAL), which they continue to direct.

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