With the headlines. About 11 in cardiff. Now on bbc news, its hardtalk. Still on the chilly side. Into friday evening then, that area of cloud and rain slowly clears off towards the east, hello and welcome to hardtalk. So under those clearing skies, have a look at the blue colours, im shaun ley. That indicates quite a cold start to your weekend, in fact, subzero temperatures for many of us, particularly in the north first thing saturday, but really wherever you are, you could well wake up to quite we use random trials to test whether medicines make a difference. A sharp frost. Why not use the same method to find effective treatments for poverty . After that chilly start to saturday, the experimental trials in africa and india, run by professor esther duflo and two colleagues, have won them the nobel prize for economics. More cloud and rain work among theirfindings food aid isnt helping the poor and the poorest kids dont need more books, in from the west through the day, they need more time. A fashionable idea so some rain for northern ireland, wins the nobel prize. But is this really western parts of scotland, a story of failure and england and wales with some of economists to predict of that rain of the highest ground the financial crisis and of economics to could be falling as sleet and snow offer Big Solutions . But certainly rain down at lower levels. Eastern england and scotland should stay dry and bright throughout the day and it will feel pretty chilly, just 5 10 celsius, our top temperature on saturday. Now, heading into the second half of the weekend, and its still an unsettled picture, as low pressure just slowly drifts towards the near continent, a small ridge of higher pressure in between before the following system moves in from the atlantic but that means that the rain should clear away from the south on sunday, many of us should see a fine, dry day. Professor esther duflo, welcome to hardtalk. Again, its a chilly start. Quite a bit of frost around first in awarding the prize thing and temperatures to you and your fellow economists, by the afternoon somewhere Abhijit Banerjee and Michael Kremer, between about 6 10 degrees, the Nobel Committee praised your a little below par, really, experimental approach to alleviating global poverty. For this time of year but at least how would you explain what you do . It is looking dry for sunday. And then the outlook for next week is a fairly unsettled one still, showery rain around at times, some sunshine too and temperatures so, the idea is very simple. Rather chilly for the time of year. Bye for now. So first of all, you take a big problem like how are we going to eradicate poverty . And break it into manageable pieces. Pieces that you know, smaller questions, but questions that admit rigorous answers. And then, once you have one of those questions, you deploy something which is very much like a randomised controlled trial in medicine to test one approach against the other. So, to give you an example suppose that you want to know how to motivate parents to take their kids to be immunised. You could set up a randomised controlled trial where, in some villages, randomly chosen, you work with members of the community that are going to mobilise parents to get their kids immunised. In other communities, you send reminder text messages. And in yet another set of communities, you provide small incentives say, in the form of cellphone minutes, paid to parents. And then you can do these things together, or in combination. Because you have randomly chosen the villages, there is nothing different about them, so you can track the immunisation rates in the different types of villages, and see where its higher. And in the places where its higher is the intervention that is the most effective. In other words, see what works and what doesnt. Exactly. Abhijit banerjee, who is your partner as well as your fellow Nobel Prize Winner, said originally, people thought of this as kind of a loony agenda. People often told us it is not how you learn about anything, because it is too small, too local. How did you overcome that scepticism . Little by little. You can think of each of these individual projects as one dot, and then together, the dots start forming pictures. And initially, maybe the sceptics said, well, you know, it might not replicate. What you find in india this is the briefing might not be valid in kenya, and what you find in kenya you arent sure will be valid in the uk. And we said, yes, possibly, im david eades. But the only way to find out is to try and multiply the number of trials and try to understand what generalises, what doesnt, this is the briefing im victoria fritz. And also, when something works out, our top story as the democrats prepare why it works out or why it doesnt. For the first public hearings and, progressively, this has in Donald Trumps impeachment inquiry, the president suffers another setback related to his 2016 campaign financing. Really become a movement. After a deadly attack on burkina faso miners we really take this prize as not their families say the government isnt doing enough to combat as recognising the work of all three islamic extremists. The final rallies are taking place of us, but recognising the work ahead of spains general election. Of hundreds of people, its the fourth in as many years researchers a network. But is it likely to break the deadlock . This isj pal, the thing you founded back in 2003 . I think it has about 400 researchers . Exactly. And feeling the force. Disneys j pal itself has 400 turbocharged a record run at the box researchers and together, office and its mega takeover of they have completed or have ongoing 1,000 projects. So this is a large number of projects, and of course, there are people who are not inj pal who are using the same approach. So this has demonstrated the power of this technique, of this tool, much more than any other single project could have. Just after the award was announced, you said its not so much like a hard science, but more like engineering, plumbing breaking the big problem into manageable chunks and solving them through a combination of intuition, trial and error, and so on. I suppose it is an interesting analogy, but the argument may be made that the plumber can certainly remove the blockage, but the plumber cant ensure you are getting your fair share of the water, of the basic resource. Isnt that the danger of the approach that youre kind of seeing the minute, but actually, youre not solving the fundamental problems that lie behind it . This could be reversed, which is that you could have the very best Engineering Solution in place, and the most modern water technique, water system, in your city, but if the plumbing is not there, nobody is going to get the water. So i dont think were claiming that all economists need to do is running randomised controlled trials and worrying about the plumbing. All we are claiming is that some economists need to do some plumbing some of the time. And i think, by us winning the nobel prize, doesnt mean everybody else should stop thinking about the big, hard questions and should stop thinking about engineering and hard science, but that that is also something that has its place in the fight against poverty, and in our thinking about Economic Policy more generally. I want to come back to that, if i may. But ijust wanted to pick up on the very particular area that you have been working on now for a couple of decades, which is trying to work with the poorest communities, particularly in india and africa. Has enough attention, do you think, traditionally been paid by economists to the poor . I think development economics, as early as 15, 20 years ago, used to be not really a fashionable subject. And i think one important thing that my co winners did, Michael Kremer and Abhijit Banerjee, is to put it back on the map as something that many people could do. There always has been Development Economists doing great work, but it remained a little bit on the margins sometimes, something that very few people decided to do. Fortunately, thats not the case any more. I think that movement around randomised controlled trials has marginally become a movement of many people deciding to Study Development economics and the problem of the poor. And that, of course what else would you be interested in . How, once you start thinking about the problem of a poor mother in a village in india, and what you could do to make it better, its a little bit difficult to get focused on something else. Give us some examples of what you might call unexpected findings from your experiments, where you have kind of given new insights. So, to give you one example, i studied, many years ago, the role of women in politics, and, in particular, of woman mayors. So there are very few women in politics in india and, infact, everywhere in the world, pretty much. In the absence of quota, people dont tend to elect women. And india in 1993 made the bold move of deciding that one third of the villages have to elect a woman as the mayor. And there was a ton of pushback on this policy, saying that women are not ready, theyre not capable, theyre not leaders, they dont have experience, they dont have charisma, their husband is going to run the show, and so on and so forth. And i didnt have a strong view on which way it was going to go, but i thought this has to be investigated. And the way that india did it, they kind of ran a massive randomised controlled trial without knowing it. Because they randomly selected, every election, which places need to elect a woman. So what me and my indian co author, raghabendra chattopadhyay, did is we collected data we just collected data because the experiment had been run, on what women do and what men do. And we learned many important and unexpected things. And the first one is that women are extremely effective leaders, and they are doing very different things. So they are not at all influenced from their husbands. Even these women who seem shy and retiring and wont speak, once theyre in power, they actually run the show, and they are very powerful. Elinor 0strom was the first woman economics winner and youre actyally the second. Do you think the lack of women has affected the kinds of subject studied . Has it left some of the subjects, particularly the life of the poor, out of the equation . Most definitely, notjust at the top of the profession, but all through the profession. Unfortunately, not enough women decide to study economics. Not enough undergraduate students pick economics as a field. Among them, not enough stay in the Phd Programme and then continue to become researchers. And i think this is very damaging because it really has an impact on what we study, because women and men have slightly different centres of interest. By the way, its notjust women its also minorities who are also under represented. In fact, even more. And that deprives us as a field. Economics is a social science. We should have a different perspective. You yourself have criticised the way we attempt to tackle poverty through economic theories that simple problems beget simple solutions. The field of anti poverty policy hais littered with the detritus of instant miracles that prove less than miraculous. Isnt your approach also guilty of that, too . All these different little examples, experiments that might have worked in one place, everyone thinks well, that is going to be a solution, then discover it doesnt apply elsewhere. Well, that is the question, isnt it . Were not claiming to have any silver bullets but were looking, if you will, for the silver pellets you know, many Little Things that might work. We never one experiment is not going to tell you, once you have done one experiment somewhere, that you have to scale up that particular approach everywhere in the World Without modification or without further research. The way that it typically works is think of each of these projects as one little dot, one little data point, that helps us understand one aspect of the problem. Before scaling up, projects are replicated and you can see whether the lessons carry out. Same thing for finding out that something is not effective, actually. Let me put the criticism that has been made of this approach. In summer of last year, 15 economists, including three previous winners of the nobel prize for economics, wrote that the real problem with this craze, as they call it, is that it narrows our focus to micro interventions. It tends to ignore the broader macroeconomic political and institutional drivers of impoverishment and underdevelopment. Would you accept that that is a fair criticism . The question is what are you going to do about those . Once you have said that there are big macro problems, big institutional problems, then what . Nothing. So the question is you want to take. For example, take institutions. For sure, the quality of institutions generate has a huge impact on the quality of life of people. But once you have said that, how do you improve institutions . Its going to be through a set of steps. For example, you know that democracy is better than non democracy in expressing the will of the people. Once you have said that, how do you actually organise a democracy . How do people vote . What do you need to put in front of people to make the right decision . What are the right you know, even as plumbing, like, what are the right ways to count peoples votes, et cetera . But i can see why, for a lot of particular policy makers who have to wrestle with the pressures of competing demands for budgets, your approach is very attractive, because it basically doesnt challenge the fundamentals of the way the system is organised. And what these critics are saying is it is all very well to break big problems into manageable chunks, as you put it, try to solve them pragmatically, but that may disguise a bigger, more fundamental problem the system we have devised for distributing wealth that creates this inequality. Because, in a sense, your work is about outcomes but it doesnt necessarily deal with why we get those outcomes. So, first of all, i will take exception to that, which is that in every study that we do, it usually calls for a follow up study that can help us get into the why. So i think we get to a much deeper understanding of the why when weve thought about why good institutions are good. Once you have said that, you know, once you have said that, you have to get into what is a good institution. Sure, but you have been very candid about this. Back in 2010, the new yorker quoted a ted presentation you gave in california where you explained, over several decades, aid for africa had risen sharply but the gdp per capita had not. And then you tell your audience, we have no idea. Were not any better than the mediaeval doctors and their leeches. Yes, and the point is that in order to find out, you have to get to the details. You cannot say you cannot even answer the question of whether aid is good or bad, a market is good or bad, or democracy is good or bad, without being a bit more specific in the question. The attitude of saying, oh, well, if you can only answer the small questions, it could make the life of people a little bit better, to me, surprisingly from a Nobel Prize Winner in economics, we tend to not be extremist to me is a bit like a marxist attitude, which is, you have to make things as bad as you can to create revolution. So, in that sense, i am not like that. I am much more of a pragmatic person. I am not going to kind of collude with lets let the system explode under its own pressure. But arent you colluding with the system, if we do these local things which make things better for the individuals, thats great for individuals youre helping but the point again of randomised trials is, there is no rational basis on who you choose, its like a medical trial the other people who receive the placebo, they are not getting the medical help even though they may need it is great. There are good systems with outcomes that are very bad and i think when outcomes are very bad in good systems, that fragilises the good systems and they are more likely to collapse so a lot of the work im doing in india is in india which is generally a very well functioning, worlds biggest democracy where there is a lot of progress to be made. In the uk, so many things are not working for the poor orfor the middle class, party because they are not very well organised so that creates anger that and endangers even the reasonably good systems we have and puts people in the situation we have now in the uk so i think that this idea that you cannot do anything meaningful without changing the system, its not for me. Do you accept, though, in part, the appeal of your approach with its kind of demonstrable outcomes, has been a reflection of a kind of sense that perhaps the bigger world of economics, the grand world of macroeconomics has failed or has at least failed to warn us, to caution us, to cause us to change behaviour in a way that might have prevented things like the financial crisis of ten years ago. I mean, the queen famously said, why didnt anybody see this coming when she went to visit the London School of economics and nobody could tell her. That has certainly not been a bright moment for economics. I think economists are not very good or even quite terrible at forecasting. The economist ran an article a few years ago, that the aim of protection are no better than taking the current rate of growth and keeping it at that and predicting a constant rate of growth so it is better than that. The problem is that are usually they are expected to do that because they are bad at it, that really harms the trust in economists so i think we need to also communicate to the public that thats not the only thing economics is about, and its also about trying to understand behaviour in a slightly more detailed way, a more empirical way, more close to the ground way and give Practical Solutions to concrete problem that people can understand, such as, you know, how do you get kids to learn in school or how do you most effectively help someone find a job after theyve lost theirs . You cant be accused of kind of giving up on your profession because your book, good economics for hard times, in a sense, makes the case for why economics and economists are still needed but in it, you and Abhijit Banerjee, you write, we seem to be back in the dickensian world of hard times with the haves facing off against increasingly alienated have nots with no resolution in sight. Questions of economics and Economic Policy are central to the present crisis. I mean, i suppose the kind of key example of that, really, is the level of inequality that remains even the richest countries. I mean, the 400 richest households in 1950 in the United States paid 70 of their wealth, their true income, in tax. In 2018, it was is 23 . The poorest households, 1950, 16 of their wealth in tax, 2018, 26 . These figures seem so striking and astonishing and yet they dont seem to provoke much real comment. Outside the world of economics. I think at the moment, they do, thanks to the work of Emmanuel Saez and gabriel zucman. I think produced the number you are putting. I think they are in the public eye and that is very important and i think their work is going to contribute to a rethinking of the tax systems and in particular tax on the rich that people are, that the western government have progressively given up on. What we think needs to be done in complement to this approach is giving the public a much clearer idea of, suppose you could raise more taxes on the rich, what are you going to do with it because with the increasing inequality and deterioration of Living Conditions for the vast majority of people in the western world, combined with this huge increase in inequality, there has been a crisis of legitimacy of the government. The economists are the least trusted in their own field of expertise. Only in the uk, in the yougov poll, 25 of people trusted them. The only people who are less trusted than economists are politicians and when you are in a situation where you have to face with issues that are, at heart, policy, Economic Policy issues like inequality or climate change, for example, the idea that these are economists, not policymakers, have not been able to keep a voice, a trusted voice in that debate, is very depressing and we hope to hold onto the hope that we could get back to it and get back to a reasonable discourse, so that as a society we can start addressing these issues. When your project to increase vaccination rates in india did improve them significantly from single figures, up to 40 , but still not a majority, you were very sang froid, if i may say that, about this, you said some policies dont work and it isnt clear why they dont work in the way you expected but you said you prefer your approach to the one that says the view that its a big conspiracy against the poor name your favourite enemy, capitalism, corruption, whatever it may be. Our approach, you said ,is easier. Warren buffett who is a wealthy man and who has no reason to worry about his own income says, there is an enemy, there is an enemy and it is an enemy that is preying on the poor. There is class warfare, alright, but its my class, the rich class, that is making war and we are winning. Isnt it your obligation as an economist if you see evidence of this call it out . I do think it is very powerful, the war, and Warren Buffett is not the only one to use it. The populist movement have gained a lot of ground by putting them self as the leaders of the downtrodden as the downtrodden being the footsoldier and i do think that it might be a good idea to take ownership again of that image and say, if youve lost yourjob because youve been replaced by a robot or yourjob was outsourced somewhere, the factory that produced furniture has now been shut down because the furniture is made in china, you are, in a way, a veteran of not the war that is fought specifically against you but a veteran of an economic disruption world and we should not look at you with suspicion because you need welfare, we should not look at you as a sponge with trying to take advantage of the system, we should not look at you as a loser, we should look at you as a hero and someone that we need to meaningfully help. So this is maybe what we are adding to the taxation piece and a place where not only is it important to raise revenue and curb inequality by raising taxes at the top but you need to show people what you are going to do with it that is going to help them directly. And you need to really change both the rhetoric and the programmes themselves to have a clear oneness that in the globalised world in which we live, and with the advent of Artificial Intelligence and robotisation of a lot of the workforce, people are constantly faced with disruptions in their life and they are not, they are not as equipped to deal with this disruption as economists and policymaker like to think and therefore we need to be there to help them out and help them out and turn their lives around to something else. At the end of the book, you issue a call to action and you conclude by saying, its for all of us to take responsibility, economics is too important to be left to economists. I hesitate to say this, given that you pointed out that survey shows that only one group of people is less respected than economists in the uk, and that thats politicians, but would you consider entering politics . President macron is among your biggest fans, and you are somebody who is interested in solutions. Could you not be one of like one of those women mayors in the indian village, surprise people with what you could do if you entered office . When i was 20, i considered not entering electoral politics but becoming a Civil Servant because i wanted to make a difference in the world and what stop me at the time is, i didnt want to be in a situation where i had to make a lot of decisions under pressure, knowing well that this might not be the best decisions. And i found that idea uncomfortable, i still do. I think my. I have the bestjob in the world, which is the ability to think deeply about problems and take my time away from any electoral pressures which are very real and at the same time, whenever there is a space for an opening or a conversation on policy politics, have people willing to listen to me. So i think im going to stay where i am. Professor esther duflo, thank you for being with us on hardtalk. 00 25 21,277 4294966103 13 29,430 thank you so much