How Nobel laureates' research to help Russia overcome poverty

How Nobel laureates' research to help Russia overcome poverty Photo: Oleg Tikhonov

On 17 October, the world celebrated International Day for the Eradication of Poverty. For many countries, as well as for Russia, where almost 20 million people are poor, this issue is one of the most pressing. It is no coincidence that the Nobel Prize in Economics this year has been awarded for the fight against poverty. Russian Minister of Finance Anton Siluanov promised to study the research of the laureates. However, how applicable are the ideas of Banerjee, Duflo and Kremer in our country, whether there is novelty in them and why, despite the successes stated from the high tribunes in improving the welfare of the population, a tenth of the Russians still do not have enough money even for food — Tatarstan blogger-analyst, the author of the Telegram channel Bikbov.guru Albert Bikbov argues in the author's column for Realnoe Vremya.

“They have long been working this way in pharmaceutics”

The Nobel Prize in Economics itself has been awarded this year for hackneyed scientific achievements. Everything has long been invented in the fight against poverty. Back in 2002, the Nobel Prize was awarded to American economist Vernon Smith, the founder of all this experimental economics. He came up with the experiments that take place in real time to study the effectiveness of, for example, a method of state intervention or a state programme. For example, they want to start giving free textbooks to children. What impact will this have? Measurements are taken, there are control groups, and there are experimental ones. All these groups are selected in a special way. On the basis of these field experiments, it is possible to draw conclusions on whether the distribution of textbooks helps the poor population or not.

These people who have received the award — three of them: Indian-born American economist Abhijit Banerjee and his French wife Esther Duflot, and American economist Michael Cramer — they continued their research in the same field as Smith in 2002.

These people who have received the award — three of them: Indian-born American economist Abhijit Banerjee and his French wife Esther Duflot, and American economist Michael Cramer. Photo: nobelprize.org

Moreover, most of these methods have migrated from the pharmaceutical industry. There is an ordinary thing that has been working for 30-40 years in pharmaceuticals. It is what is known as the blinded experiment (the study of the reaction of people to any impact, provided that the subjects are not privy to the important details of the study; used to exclude subjective factors that may affect the outcome of the experiment; placebo effect).

When groups are randomly selected, randomized, and researchers do not know — who exactly what exactly given: placebo or a new drug. In the end, they summarize all the results and look. It has already long been used in pharmaceutics. Therefore, many scientists have been surprised, for what the Nobel prize has been awarded if the approach itself has long been worked out?

“Why giving benefits to the poor? Why don’t they close these programmes because they are ineffective?”

In Russia, this is one of the most acute problems: when they draw up any state programmes or completely new initiatives, they do not take into account scientific research. There is no good practice of field experimentation. To scientifically support whether this programme will work out or not.

Let's take the programme Our Yard. How will it affect the welfare of Tatarstan citizens? What will it improve? Or the programme of polylingual complexes — how will it work? Will it be effective in Kazan? Clearly, we all understand — it should be useful. But how effective?

Russia constantly does something to overcome poverty, improve the quality of life of the population. All right, I give good examples, about which special scepticism does not arise. But there are also various kinds of subsidies and other support measures for low-income and needy categories of citizens. How do they work? Why giving them benefits? Why don’t they close these programmes because they are ineffective, at least according to the results of these field experiments? Therefore, there is a huge field of activity for research and consulting.

There are also various kinds of subsidies and other support measures for low-income and needy categories of citizens. How do they work? Photo: Ilya Repin

“There is a practical benefit from field experiments”

The field experiment works well both in the area of poverty alleviation and in assessing the effectiveness of any subsidies — it is a universal tool, like a master key. So we can work with different types of state programmes, we shouldn’t focus on the eradication of poverty alone.

In Russia and Tatarstan, it is high time to introduce such smart research methods that the Nobel laureates have proposed — to study empirically which methods work and which do not. Huge amount of money is saved when using scientific approach everywhere, not just in the fight against poverty. For example, we have introduced a subsidy programme in priority areas of business, but it does not work at all, although it seems to us that there is some progress. Here it is possible to find out in the course of field experiments.

Russia relies on sociological research, but they do not always perform them, to put it mildly, in the correct from a scientific point of view. Therefore, of course, there is a practical benefit from these methods of field experiments.

By Albert Bikbov