The Dufflo challenge

Updated October 21, 2019

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Pakistan is among the first few countries where the experimental approach to the eradication of poverty — pioneered by this year’s Nobel-winning economists — has selectively been applied, thanks to a group of prominent Pakistani economists. The results of the application of new tools, which are claimed to be great, have yet to surface and gain endorsement before one may go for a wider application.

Experts who see poverty as an outcome of an exploitative power structure are not convinced of the utility of the new approach to achieve a fairer world. They believe it gives a false hope to the poor and, like the NGO movement, hurts more than it helps the popular movements striving to overthrow the exploitative order. To them, the said approach serves the status quo.

In contrast, a whole lot of young aspiring economists, captivated by the power of science and logic, and wary of armchair intellectualism and convinced of the waning relevance of abstract macro-economic concepts in the policy-making, are contemptuous towards the critics and feel drawn to the ‘Duflo model’. They see it as something ‘new’, closer to reality, challenging the redundant ‘old’. They value small successes in the fight against poverty that are based on field trials over the promise of a utopia.

‘Most critics belong to the band of lazy bumps, afraid to step out of the comfort of their black-and-white dream world’

The backers of ‘medical model’, associated with the Center for Economic Research in Pakistan (CERP), the Institute of Development and Economic Alternatives (IDEAS), the Collective of Social Science Research (CSSR) and the Consortium for Development Policy Research (CDPR), were validated in a sense when the pioneers of the model, Esther Duflo, Abhijit Banerjee and Michael Kremer, won the Nobel in Economics last week.

The meek response of the policy-making circles in Islamabad to the winning approach reconfirmed the perception that the stratified governance framework and the rigid inward-looking bureaucracy pose limits to the scope of evidence-based policy interventions in Pakistan.

The association of globally noted bright economists like Atif Mian, Asim Khawaja and others with economic research bodies applying the Duflo model, guaranteed their recognition in the relevant global development circles, and must have facilitated access to international poverty alleviation grants. Atif Mian shot up to prominence in the country when he was picked up to advise PM Imran Khan’s government last year for his professional excellence but was then dumped within days for reasons that had nothing to do with his professional expertise.

The details of relevant local research institutions and their projects available on their website shed light on their orientation. They also use modern scientific tools, such as randomised controlled trials (RCTs), for identifying apt policy options for better outcomes in a variety of fields.

Dr Ali Cheema, a LUMS professor who is a founding board member of CERP, was reached over the phone to seek his comment on the Nobel laureates and the rate of success of the application of their model in Pakistan, but he excused himself for being “too occupied”.

Dr Asim Ijaz Khawaja was not accessible instantly, but his tweet in a thread of responses to the decision of Nobel prize speaks his mind. “Couldn’t be happier. Brilliant scholars, deeply concerned about development, and fabulous mentors”.

Maroof Ali Syed, the CERP CEO, promised to discuss the issue in detail “later”. He was heading abroad to attend “a couple of conferences”. He did mail a brief response to the Dawn query though. “Yes, we use RCTs in our research portfolio in Pakistan”. On a question regarding the success of the new approach, he wrote. “Not sure what you mean by ‘not as starkly positive as expected’ but we have 23 programmes (15 in Punjab, 2 in Sindh, 4 in KP, 1 in Islamabad and 1 in Balochistan that we are about to sign) with varying results. It depends on a lot of factors but an RCT is one of the best ways to establish causal inference which is context-adjusted. It’s an evidence-based experimental approach that yields impact that you can measure objectively.”

The post of the chief economist in the Planning Commission (PC) is vacant. The Dawn query, therefore, was diverted by Dr Hanan Ishaque, Director to Minister, towards PC Joint Chief Economist Rai Nasir Ali Khan. The Joint Chief appeared to be innocently ignorant. His response to Dawn’s question on Whatsapp was an image of flower bunch that said “good” at the bottom. It may mean whatever one wants it to mean, but it was surely reflective of an innocently ignorant mind.

Later Dr Hanan Ishaque, who worked earlier at the Pakistan Institute of Development Economics (PIDE), clarified that it is not the PC’s mandate to create projects or carry out its evaluation, especially after the 18th Amendment that devolved the subjects of health, education, population, agriculture, population and social welfare to the provinces. “Some donor-funded projects might be based on RCTs and application of other sophisticated programme evaluation methods, but the PC has neither the capacity nor the intent to apply them.”

The tweets by Umair Javed, Professor of Sociology at LUMS, articulated the response of a traditional leftist. “Guessing it’s my disciplinary bias and training at work but I find it hard that you can pitch a method for the solution of any distributive issue without involving an overt appreciation of how social structure and power work.

“My own unease with their (Duflo, Banerjee and Kramer) work is that they are packaging solutions to a fundamental ‘structural’ problem of poverty in such a purposefully anti-political and technocratic ways that it is unlikely to cause much good (possibly does the opposite)”.

An economist in the making, not allowed by her current employer to go public with her views, snapped at the criticism of inspiring 2019 Nobel laureates. “Most critics belong to the band of lazy bumps, afraid to step out of the comfort of their black-and-white dream world. They are in a state of perpetual denial. Instead of accepting the failure of conventional socialist model and looking at alternatives, they, like pseudo clerics, doubt intentions and are quick to label new thinkers as anti-people and anti-politics.

“I believe that the work of behavioural economists is beginning to make the discipline of economics relevant again, motivating socially-conscious people towards this discipline,” she agitated.

Dr Sania Nishtar, a doctor by qualification and an advisor to PM on the social sector who heads PTI’s flagship poverty alleviation initiative Ahsaas, promised from London to share her views. The deadline expired, but her comments did not reach Dawn.

Published in Dawn, The Business and Finance Weekly, October 21st, 2019