Ethics@Work: New front in the war against poverty - and what we can learn from it

Ethics@Work New front i

Fighting poverty is a high political priority in Israel. For decades, every government has included fighting poverty in its agenda. As I pointed out in a previous column, Israel has among the world's highest levels of income inequality based on economic statistics - and simultaneously one of the highest levels of aversion to inequality, based on attitude surveys. So it is a natural preoccupation. Last week, a MacArthur "Genius Grant" was awarded to an MIT economist who has pioneered an innovative approach to fighting poverty. Esther Duflo is the cofounder of the "Poverty Action Lab," which engages in random trials of poverty-fighting policies among matched populations to greatly increase the ability to distinguish effective from ineffective means. This is far more effective than waiting for governments to try different policies and then examining them after the fact. Naturally, this methodology has its own limitations. It is impossible to use it to discover what impact improved education now will have on poverty in 20 years. But it is a great improvement on existing techniques. In a recent interview, Duflo, together with the lab's cofounder, Abhijit Banerjee, revealed the secret of overcoming poverty: that there is no secret. Each situation is different, and each program has its unique challenges. In development circles, Duflo said, "the biggest wrong belief is that there is a magic bullet and I can find it." For example, in many programs the true obstacle is the "last mile." In one study, even though immunizations were made available for free, many parents didn't immunize their children. Offering a kilo of lentils for each child immunized, which added a negligible amount to the cost of the program, led to a 10-fold increase in participation! Although the Israeli context is different from the third-world areas that are the focus of Duflo's research, I am convinced that the fight against poverty here has to internalize this lesson. Israel doesn't have "a poverty problem": it has a number of distinct poverty problems. Among haredi Jews the obstacle is very low workforce participation among men; among Israeli Arabs it is very low workforce participation among women; in the periphery the problem is transportation and infrastructure, etc. The biggest danger is that the degree of commitment to fighting poverty be measured in number of dollars spent instead of the amount of careful thought devoted to overcoming the very specific and characteristic obstacles out there. MIT has demonstrated a pragmatic, innovative and nonideological approach by hosting this unique laboratory. We should certainly applaud the opening of a new front in the fight against world poverty - and apply its lessons to our own unique poverty problems. Asher Meir is research director at the Business Ethics Center of Jerusalem, an independent institute in the Jerusalem College of Technology (Machon Lev).