Poor Economics

The strongest correction on this list to a rich-world view of money, built on randomised field experiments across India, Kenya, Indonesia and Morocco, by two Nobel laureates who show what poor households actually do and why. It reframes the reader’s assumptions about scarcity, risk and decision-making rather than optimising their portfolio.

The chapter guide

Poor people are no less rational than anyone else, but scarce information, missing markets, delayed payoffs, small frictions, and badly designed institutions make ordinary decisions far more costly and can keep poverty in place.

1. Chapter 1: Think Again, Again

   Grand arguments about aid and poverty traps should give way to specific questions tested against how poor people actually live.

2. Part 1. Private Lives: Household choices under scarcity

   The first part turns from broad theories of poverty to the constrained choices households make about food, health, education, and family size.

3. Chapter 2: A Billion Hungry People?

   Hunger is real, but food choices, nutrition, productivity, and poverty do not form the simple calorie-based trap that policy slogans assume.

4. Chapter 3: Low-Hanging Fruit for Better (Global) Health?

   Cheap preventive health tools remain underused because beliefs, present costs, service quality, and delayed benefits matter more than availability alone.

5. Chapter 4: Top of the Class

   School attendance does not guarantee learning when curricula target elite success, teachers expect little from struggling pupils, and instruction ignores actual skill levels.

6. Chapter 5: Pak Sudarno’s Big Family

   Fertility and investment in children reflect contraception access, bargaining power, old-age security, and family expectations rather than one universal preference for large families.

7. Part 2. Institutions: Markets and political systems

   The second part shifts from household decisions to the financial, employment, and political institutions that shape which choices are available.

8. Chapter 6: Barefoot Hedge-Fund Managers

   Poor households face unusually severe risk, build costly informal hedges, and often reject formal insurance products that do not match the losses they fear or the trust they have.

9. Chapter 7: The Men from Kabul and the Eunuchs of India: The (Not So) Simple Economics of Lending to the Poor

   Microcredit expands access to small loans without producing a universal escape from poverty, while the structure that controls default also limits flexibility and business growth.

10. Chapter 8: Saving Brick by Brick

    Poor households save through costly informal devices because distant goals, constant demands, and missing commitment products make cash savings unusually difficult.

11. Chapter 9: Reluctant Entrepreneurs

    Many poor people run tiny businesses because stable jobs are unavailable, not because they are latent high-growth entrepreneurs, and small loans rarely change that underlying reality.

12. Chapter 10: Policies, Politics

    Bad institutions matter, but specific rules, information, monitoring, representation, and implementation details can improve outcomes even without wholesale political transformation.

13. In Place of a Sweeping Conclusion

    Five recurring lessons replace a single cure: improve information, reduce decision burdens, repair missing markets, fix programs at the margin, and prevent low expectations from becoming self-fulfilling.

Scorecard

Universality

5 of 5

Evidence

5 of 5

Reread value

3 of 5