"A society grows great when old men plant trees whose shade they know they shall never sit in..."

I came across an old Greek proverb the other day that I really, really liked.  It goes like this, "A society grows great when old men plant trees whose shade they know they shall never sit in."  Pretty amazing, right?  Why would an old man or an old woman want to plant a tree, if for no other reason than to leave the world a better place.  One of the great things about people these days is the fact that we all want to help others (at least most of us).  Certainly, we would all like to leave our children and grandchildren a better world to live in, long after we die.  But our altruism can and frequently does go deeper than our own self-interest (which, I would argue includes our children and other family members).


We do have limits, of course.  For example, there was one recent study that showed that individuals are willing to forgo a monetary reward in order to spare someone else from undergoing a painful electric shock.  Participants were even willing to undergo a painful electric shock themselves in order to spare someone else from having to do so.  Perhaps not surprisingly, participants were less willing to undergo a painful electric shock in order to secure a monetary reward for someone else.


We also want to feel confident that when we do give our time and money for someone or something else, that is actually going to do good.  I've previously posted about something called "Effective Altruism" (see "The Innkeeper's Tale"), which is a movement that seeks to answer one simple question: how can we use our resources to help others the most?  In other words, we want to do the "most good for the most people."


"Effective altruism" is important to organizations and governments as well.  There are several studies, articles, and books that have called into question the billions of dollars in government aid money that have gone to developing nations with the goal of reducing poverty and increasing economic growth.  While their motives were altruistic (in most cases), the impact of this money has been limited.  More concerning, in most of these countries, poverty has actually increased despite the billions of dollars that have been invested (see, for example, "Dead Aid" by Dambisa Moyo, "The Elusive Quest for Growth" by William Easterly, "The White Man's Burden" by William Easterly, and "The Bottom Billion" by Paul Collier).


It is with all of these thoughts in mind that I want to talk about another book on my "Recommended Books to Read List" for 2019.  Two economists from the Massachusetts Institute of Technology, Abhijit V. Banerjee and Esther Duflo were awarded the 2019 Nobel Prize in Economics just this past week.  Banerjee and Duflo (and their co-winner, Michael Kremer from Harvard University) pioneered a unique approach to addressing global poverty using an evidence-based approach.  They broke the issue of global poverty into smaller, more easily manageable questions and used field experiments to test different solutions to the problems that these questions identified.  For example, when trying to tackle childhood education, one of the most effective interventions that these investigators found was to treat school-aged children for worms!  For only US$ 0.60 per child per year, school-based deworming reduced serious worm infections by 61 percent, which subsequently reduced school absenteeism by 25 percent!  But here's the interesting part.  They also found that time and money invested during the school-age years resulted in significant improvements in the labor supply more than 10 years after their original study!  Men who participated in the original study were able to spend more time at work (i.e. less work absenteeism) and were more likely to hold higher paying manufacturing jobs, while women who participated in the study were more likely to have attended secondary school.  Banerjee and Duflo talk about this study and more in their excellent book, "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty", which was the Financial Times/Goldman Sachs Business Book of the Year when it was released in 2011.  Their book details many of the problems and issues with the old (though still used unfortunately) approach to developmental economics, as well as their recommendations and solutions to the problem of global poverty.