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Economy Updated: 15 Oct 2019

Abhijit Banerjee and Esther Duflo, recipients of the 2008 Frontiers of Knowledge Award in Cooperation, win Nobel Prize in Economics

Once again, the Royal Swedish Academy of Sciences’ criteria reaffirms a previous decision by the BBVA Foundation. Banerjee and Duflo, founders of MIT’s Poverty Action Laboratory, were honored in the first edition of BBVA Foundation’s Frontiers of Knowledge awards in 2008. Considering that ten Frontiers of Knowledge awardees have been subsequently recognized by the Swedish Academy, it could be argued that, to a certain extent, BBVA Foundation’s awards are becoming a prelude to the Nobel awards.

This Nobel Prize in Economics 2019 recognizes Abhijit Banerjee, Esther Duflo and Michael Kremer for their “experimental approach to alleviating global poverty”. Banerjee and Duflo are founders of the Abdul Latif Jameel Poverty Action Laboratory (J-PAL) at the Massachusetts Institute of Technology (MIT), while Kremer is also an affiliated professor at J-PAL. This laboratory, made up by MIT economists, promotes the use of scientific methods to evaluate the effectiveness in the use of funds for development aid.

In its official press release, the Royal Swedish Academy of Sciences praises the work of the three economists, noting that it has "considerably improved our ability to combat global poverty", since "in just two decades, their new experiment-based approach has transformed development economics, which is today a flourishing field of research.”

Since its creation in 2003, the J-PAL has managed to build a broad worldwide expert network. The laboratory promotes the use of ‘randomized trial’ methods to evaluate development interventions, similar to those employed to test experimental drugs and vaccines. J-PAL has applied them, for instance, to measure the effectiveness of bednet campaigns in the fight against malaria or of strategies to reduce teacher absenteeism. The U.S. laboratory’s advocacy of this approach has led to it being taken up by numerous international institutions.

In 2008, J-PAL received the Frontiers of Knowledge Award in Development Cooperation for successfully promoting “the scientific evaluation of development interventions by using randomized trials applied to areas including education, health and financial markets.” As noted in jury’s citation, its methods have proven to be “a valuable tool for answering specific policy questions”, and its work “has led to the expanded use of this approach by development practitioners and researchers.”

Banerjee also contributed to the first book published by OpenMind, BBVA’s knowledge community, with an essay entitled 'Development and Strategies for Fighting Poverty', that focused on the reasons that make it so hard to combat poverty at a global level.

Kremer was one of the guest speakers at the conference on Scientific Analysis of Development Aid, hosted by the BBVA Foundation in January 2007, and co-authored "Experimental Analysis of Development Aid:

Ten Frontiers of Knowledge awardees have gone on to win a Nobel Prize

With Abhijit Banerjee and Esther Duflo, ten are now ten Frontiers of Knowledge recipients who later won a Nobel Prize. This year, the Nobel Prize in Physics went to Mayor and Queloz, winners of a 2012 Frontiers of Knowledge award. Previously, Shinya Yamanaka and James P. Allison, who earned the Frontiers of Knowledge award in the Biomedicine category, were distinguished with the Nobel Prize in Medicine in 2012 and 2018, respectively; Robert J. Lefkowitz, also recognized by BBVA Foundation in Biomedicine, won the Nobel Prize in Chemistry in 2012. In Economics, Finance and Business Management, three Frontiers of Knowledge awardees have also gone on to win the Nobel Prize in Economics: Lars Peter Hansen (2013), Jean Tirole (2014) y Angus Deaton (2015). Finally, William Nordhaus, Frontiers of Knowledge awardee in Climate Change in last year’s edition, received the Nobel Prize in Economics 2018.