Abhijit Banerjee, the co-winner of the 2019 Nobel Prize in Economics Sciences, along with his wife, also an MIT economist, and another Harvard economist “for their experimental approach to alleviating global poverty,” may well have economics in his blood from an early age.
The 58-year-old Nobel laureate was born into a family of economists in Kolkata where his mother Nirmala Banerjee was a professor of economics at the Centre for Studies in Social Sciences and father Dipak Banerjee was a professor and the head of the department of economics at Calcutta’s famous Presidency College.
Banerjee, currently the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology (MIT), won the coveted prize along with his French-American wife Esther Duflo, also an MIT economist, and Harvard economist Michael Kremer.
The prize “reflects on the fact that somehow while we often pay lip service to the welfare of all, this is something that not always (is the) immediate focus of a prize like this,” Banerjee said in an interview to NobelPrize.org. He said he is delighted that “some attention was thrown this way.”
Banerjee told NobelPrize.org, “Not that I think all the other things that they get prizes for aren’t important. But it does make people who work in this area feel a little more enthused. Lots of people in this world, who do real things, not people like us, people who do real things, this is somewhat of a prize for all of them,” he said.
According to an MIT press release, the work of Duflo and Banerjee, which has long been intertwined with Kremer’s, has been highly innovative in the area of development economics, emphasizing the use of field experiments in research in order to realize the benefits of laboratory-style randomized, controlled trials.
Duflo and Banerjee have applied this new precision while studying a wide range of topics implicated in global poverty, including health care, education, agriculture, and gender issues, while developing new antipoverty programs based on their research.
“Their passion for the power of economics to do good in the world inspires us all,” Nancy Rose, department head and the Charles P Kindleberger Professor of Applied Economics at MIT, said, referring to Banerjee and the co-winners.
In Kolkata, Banerjee’s mother told Business Today and the Hindu newspaper that despite living so long in the U.S. her son was “very much an Indian.” Banerjee’s mother, Nirmala Banerjee who is also an economist, said her son was hesitant to change his citizenship, adding that Banerjee was a book worm during his younger days.
To a question by the Hindu if he learnt about economics from bookshelves, she said: I think, he learnt from life. From the children he was playing with in the slum next to our house. Those days, all kids from various backgrounds used to play together and maybe, that is how he learnt by observing things,” Nirmala Banerjee said.
Nobel laureate Amartya Se, who won the same award in 1998 for his contribution to welfare economics, said he was “very very happy and delighted” over Banerjee jointly winning the Nobel in Economics.
“I think that the prize has been given to the most competent persons,” Sen told the PTI news agency, reacting to Banerjee’s winning the prize.
Banerjee completed his BS degree in economics from Presidency College in Kolkata, the same college where Sen studied, in 1981 and his MA in economics from Jawaharlal Nehru University in Delhi in 1983 before acquiring PhD in economics at Harvard in 1988. He did his doctoral thesis on ‘Essays in Information Economics’.
Banerjee said, according to news reports, he has learnt an “enormous amount” from talking to people on the ground. “The set of people I really owe enormous amount to is the people who are …both the people with whom we work with, whose lives we study in many ways, but also the people who work with them.”
Crediting NGOs like Pratham and Seva Mandir for the work they do at the grassroots level, Banerjee said, according to latestly.com, he has learned a huge amount from these organizations. “For example, my personal experience that these organizations that work on a very large scale with very poor people has certainly been very important for us.”
He added that “One should not have too much faith in one’s own rationality and you should not have too much faith in the rationality of anybody else, either. We all learn together about the way the world is. And I think it’s an antidote to wishful thinking of all kinds.”
The three award-winners have known each other since the mid-1990s and have long viewed their research efforts as being intellectually aligned.
“Abhijit, Esther, and Michael’s work shows economic research at its finest. They have not only transformed the way economists approach the study of poverty and development economics, but deployed their findings to improve the lives of hundreds of million people across the globe,” Nancy Rose said.
Duflo and Banerjee also co-founded MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL) in 2003, along with a third co-founder, Sendhil Mullainathan, now of the University of Chicago. J-PAL, a global network of antipoverty researchers that conducts field experiments, has now become a major center of research, facilitating work across the world.
Banerjee’s interest not only in economics but also democratic society and liberal values has manifested in his writings for the popular press.
Talking about his alma mater, the JNU, Banerjee, in an article titled “We need thinking spaces like JNU and the government must stay out of it’ in Hindustan Times in February 2016 during the height of a student agitation over government allegation about students raising pro-Pakistan slogans on the campus, spoke his mind, saying “universities and civil society are important for a democracy like India’s, which founded on a genuine idealism that we have a hard time holding on to.”
In the article he said he remembers another major police action at JNU in the summer of ‘83 when the students, including him, had gheraoed the vice-chancellor in his house for the umpteenth time. The pretext was the expulsion of the president of the student union, the Kanhaiya Kumar of the day.
“Once again there seems to have been an internal angle; the apparently fake Hafiz Saeed tweets, and the allegations of imposters shouting pro-Pakistan slogans (who else would, the Left in India has no love for Pakistan…) suggest a setup, perhaps by some student group, with or without outside sponsorship.
But the reaction of the State, embodied in the charges of sedition and subsequent statements by prominent politicians and public personalities aligned with the current government, sends the same message: How dare you!” he wrote
Banerjee is a former president of the Bureau for the Research in the Economic Analysis of Development, a Research Associate of the NBER, a CEPR research fellow, International Research Fellow of the Kiel Institute, a fellow of the American Academy of Arts and Sciences and the Econometric Society, and has been a Guggenheim Fellow, an Alfred P Sloan Fellow and a winner of the Infosys prize.
In their book “Good Economics for Hard Times,” co-authored by Banerjee and Duflo, the authors argue that immigration and inequality, globalization and technological disruption, slowing growth and accelerating climate change are sources of great anxiety across the world, from New Delhi and Dakar to Paris and Washington, D.C.
In the past, one has turned to economists to solve these large-scale problems, but over the past few decades — and certainly since the 2008 financial crisis —the global citizenry have lost their faith in economists.
“The resources to address these challenges are there, but what we lack are ideas that will help us jump the wall of disagreement and distrust that divides us,” they write.
According to news reports, “Good Economics for Hard Times” makes a persuasive case for intelligent forms of intervention, based on sound research into real-life situations; and a society built on compassion and respect. “It shines a light to help us appreciate and understand our precariously balanced world.”
Banerjee’s mother Nirmala Banerjee told the Hindu, commenting on his sons’ work that, “From what I understood is that his work is largely about people. Economics is about society and the people and he focused a lot on that... what ails people and how to address the issues… to make difficult things sound simple. That in fact is the work.”
Meanwhile, the news of Banerjee’s winning the Nobel prize seemed to have displeased the ruling Bharatiya Janata Party in New Delhi, apparently because Banerjee was one of the economists the Congress party had consulted before formulating NYAY or Nyuntam Aay Yojana, the flagship social welfare program proposed by the Modi government before the 2019 Lok Sabha elections.
The scheme promised to give 20 percent families in poorest of the poor families in the country Rs 72,000 each annually in order to ensure get access to basic amenities.
Banerjee had suggested the government to generate extra resources to fund the social welfare scheme through higher taxes.
He went on to add that, whichever party forms the government post 2019 general elections, will have to raise taxes to fund the social security scheme as there was no fiscal space for NYAY, that was estimated to cost the exchequer a whopping Rs 72,000 crore annually.
Senior BJP leader Anant Kumar Hegde in a twitter post said: “Yes, the man who recommended #inflation & #tax rates to be raised for our country ..., has been recognized and awarded #NobelPrize2019.”