Abhijit Vinayak Banerjee is currently the Ford Foundation International Professor of Economics at MIT. He was educated at the University of Calcutta, Jawaharlal Nehru University, and Harvard University. Together with Esther Duflo and Sendhil Mullainathan of Harvard University, he founded the Abdul Latif Jameel Poverty Action Lab in 2003. He is also the author of the bestselling Poor Economics – A Radical Rethinking of the Way to Fight Global Poverty.
Banerjee was recently speaking at a literature festival in Mumbai on why most people don’t understand what it exactly means to be poor and how the decisions made by the poor might be irrational to us but are very rational decisions given the situation they are in. Here are few excerpts from what he said. This is the first part.
The poor man from Morocco
A part of the point of writing this book was to say that the poor make lots of choices. They are very active participants in their own lives. They are like all of us excited about making choices. And they make choices that are often sort of not intelligible to us, which is different from saying that they are making irresponsible choices.
Let me give you an example. We were in a village in Mexico talking to a guy who was standing in front of his house. He was telling us about his life and to get the conversation going we asked suppose you had some small amount of money what would you do with it? And he said I am going to buy some food. And then we asked him what would he do if he had some more money? He said I will buy more food.
So we were very persuaded that this was a hungry man. We walk into his house and see that he had a television, a parabolic antenna and a DVD player. So we asked him what is this? He said, entirely without missing a step, television is more important than food.
An evening in a village
When you first hear it, you say, that can’t be right. But I think the mistake we make we don’t think about what he is trying to say. One advantage of being a development economist is that you get to spend a lot of evenings in random villages. One thing that is uniform across the world is that an evening in a village is very boring. There are no movie theatres. No music halls. No place to go. There is one tea shop. You can go there. You have been there before. All the other people have been there for years. They have talked to each other for years and they say the same things more or less. Somebody says something, other says, oh yeah, and then they are silent.
So what does this tell us?
What that is telling us is that evenings in a village are very boring. And that person in the village in Morocco really felt life would be unbearable without a television. He explained that he had three friends and they typically did not have anything to talk to each other. And that happens because there is almost nothing coming in from the outside. Television gives them something to talk about. This is why I empathise. In any decision we make there is a space for pleasure. A space that recognises we are human beings and the domain of pleasure is an essential driver for us.
The poor are thinking that I could either grab healthy calories or buy a tv. If I grab calories then maybe I will become a little bit healthier and my resistance will go up, maybe I will go from being extremely poor to slightly extremely poor. On the other hand if I forego calories I can watch television right now. The typical way we think is that these guys who buy television and don’t eat nutritious food are somehow damaged or irrational or are somehow different, and we can’t help them because they are not helping themselves.
I think they are helping themselves. We should understand what they are doing.
The right to food
The principle behind the right to food if we give poor people subsidised food there nutrition will improve. I am a part of the Poverty Action Lab where we run large scale field experiments. We do these experiments to figure out what works? One of the things that we are trying to figure out is that whether the policy of giving people cheap subsidised food to improve nutrition, really works? We carried out a nice experiment on this in China. What we did was that we gave some people a voucher to buy cheap rice. Instead of buying rice lets say for ten rupees, they could buy it for two rupees, using the vouchers. The presumption was that this would improve nutrition. This was done as an experiment and hence some people were randomly given vouchers and others were not given vouchers.
When people went back and looked at it, they were astounded. People who had got the vouchers there nutrition had become worse. They felt that now that I have these vouchers I am rich. I no longer need to eat rice. I could eat pork. I could eat shrimps. They went and bought pork and shrimps and as a result their net calories went down. This is perfectly rational. These people were waiting for pleasure.
Pleasure is something very important not just for us to live a day but also in terms of being able to control of our destiny. You think the rest of my life will be drab, and it becomes very difficult to live. In that particular sense they had a little opportunity and they knew that this wouldn’t last forever. They could improve their nutrition or for the next ten days they could also eat a little bit better. I think fun is something that we forget about. The answer surprised everybody because we thought about it as what we would have done if we were in a similar situation.
The auto-rickshaw drivers of Chennai
I think when you look at many poor people the first thing you notice is that they are not doing what you think they should be doing. As I said before that is partly because you have it wrong and partly also because its hard to be poor. Sometimes you just want relief. Let me give you an example of the auto-rickshaw drivers in Chennai, where one of my students did a survey.
The survey found that 40% of the income of the drivers goes into drinking. If you were to ask why they are doing that? The answer is that my body hurts and I want something to stop it hurting. You are in an auto-rickshaw twelve hours a day. Your body is bouncing. Your bones are hitting against each other. At that point you want something.
I understand that alcohol is not the best possible relief. But whenever we want to be judgemental of the poor, and whenever we don’t want to trust their judgement, the question for us is to ask first what is it that makes them make that choice? Unless we ask that question we are often tempted impose our own conditions on their lives.
It never occurred to me that driving an auto-rickshaw for 12 hours a day is so painful. It didn’t strike me. I thought of many things but not that. And then I realised that we being in an auto-rickshaw for five minutes is painful, and think of 12 hours a day, bouncing on Chennai’s streets, your bones hurt. I don’t doubt that their wives are not happy about it. I am sure if we could find a way to get them to drink less it would be good for all of us. But the first one thing that one has to do is to start by trusting that they have a reason.
Why immunisation rates are low?
One of the facts about the world is that immunisation is a life saver. A lot of blindness in India is caused by the fact that a lot of woman are not immunised when they are pregnant with a child. They get rubella, which causes a cataract which makes people blind. So lots of people are curably blind because of their mothers not being immunised.
So immunisation is seen by people as an obvious thing to do. Given that why are the poor not immunised? We tend to think that it must be because that they are poor. But that is almost truly the wrong answer if you take it at a face value. You realise its the wrong answer because immunisation is free. It is something that the system is supposed to provide. But the next answer is that it must be because the government is failing to provide it. There is some truth to that answer.
We did a large scale field experiment in villages in the Udaipur district in Rajasthan. In sixty of these villages the NGO Seva Mandir went and communicated that every third Monday we will come to your village and immunise. So immunisation was guaranteed. It was done reliably. And that raised the immunisation rate from about 5% to about 17%.
What raised the immunisation rates?
What got it up there was that in 30 out of the 60 villages we said that every time you come for immunisation you get a kilo of dal. That’s it. That got it up to 40% in those thirty villages.
The first reaction that when the life of children is at a stake why are you trading it off for a kilo of dal? Why does a kilo of dal make such a difference?
The second thing is you think about what does immunisation mean? For my children I have no idea of how many times they have been immunised. You get a shot for this, a shot for that and so on. And you are supposed to keep track of all this. Make sure that your child gets this one at the right time and that one at the right time. And remember.
My children grew up in the US. In the US and in the most other western countries that is externally imposed. So there is a piece of paper at the hospital which helps keep track. You don’t have to actually remember any of this. What does the dal do? It reminds you that it is important to get your child immunised. Otherwise there is no external pressure. For me I knew that my child could not go to school unless he was immunised. I was under external pressure.
Of all things about Western Capitalism the thing I really loved was cold clean water all the time
One mistake that we make is we assume that we are in control of our lives and we are making all sorts of choices and poor people are in not in control of their lives. In fact, I think it’s a reverse issue. For me, my immunisation was guaranteed by the fact that I did not have a choice. I had to get my child immunised to get him into school.
The same is true about my pension. It is deducted from my salary. And somebody will give it to me when I retire. I know there is some money and haven’t checked actually how much. I have no choice.
The water I drink, comes out of a tap and I pour it into a glass and I drink it. I don’t think about whether its a good water or bad. It is always good water. The first thing I loved when I went to the US was that there was cold water everywhere that was fit to drink. Of all things about Western Capitalism the thing I really loved was cold clean water all the time.
You could get water and you did not have to worry about whether this water is clean or not. Think about a poor person and when we ask why don’t you boil your water? Think about every time you drink it, you have to boil the water, you have to put in chlorine and wait for one hour before the chlorine vapours go out and then drink it. It’s a challenge to live your life well as a poor person by our standards.
You have to make sure that the water is clean. You have to make sure that you are putting away money for your future because there is no automatic deductions of your savings. You have to make sure that your children get immunised.
It is difficult to be poor
We need to understand is that how difficult it is to be poor. That is the first fact to keep in mind. Every poor person every day is much more in control of their lives than I am of mine. I am totally not in control of our life. I don’t know how much my salary is. I don’t how much my pension is. I don’t know where my water comes from. I have automatic health insurance. I don’t have to choose health insurance it comes automatically. I don’t have a choice. Most of my choices have been taken out of my life. In fact, wait, I don’t want those choices. Those are hideous choices. I would rather want to choose whether I want to eat meat today or fish? That is a much more pleasurable choice to make. I could choose my pleasures because my needs are taken care of.
The article originally appeared on www.firstpost.com on December 14, 2012
(Vivek Kaul is a writer. He can be reached at [email protected])