The first lecture brings up the contention between paternalism and freedom, discussing the
criticisms shed on paternalism and its enforcement in anti-poverty policies. Throughout the
lecture, Duflo attempts to define the boundary between acceptable and unacceptable
practices of paternalism. In this context, paternalism is the practice of providing people with
a set of basic needs, typically without consulting them on their needs and wants. Duflo starts
off by tracing back the roots of paternalism to its conception during the industrialisation
period in France and England. It is then established that we must empower the poor and not
take the initiative away from them to truly eradicate poverty. There is a fundamental
asymmetry between the rich and the poor in terms of their ‘environment’ and we go further to
evaluate its relationship with paternalism and freedom. Environment is determined by many
factors: infrastructure, default situation, administrative barriers, information availability,
complexity of choice and trust. Freedom is defined as the ability to realize one’s potential,
strongly tied to the notion of capability. Duflo comes to the conclusion that the rich are more
free than the poor for 2 main reasons: having to exercise active choice might end up in the
“wrong” choice and it demands time and energy which is limited in supply. We can model a
poverty trap: a virtuous cycle with an escape threshold. Policies that make it more selfregulating to achieve basic needs through better strategies and escape poverty bring about
meaningful freedom. However, Duflo ends off with a few questions to ponder about: Are
strong defaults without exit options still considered freeing? Who decides the set of basic
needs? Can developing countries be trusted with benevolent paternalism? The second
lecture fringes on the first and goes on to explore hope as a capability. It investigates
whether a lack of hope can push someone into a poverty trap or rather, if hope can help exit
a poverty trap. We can posit that anticipations determine our behaviour and outcomes.
Relaxing the assumption of perfect rationality, we discover that depression can negatively
impact our decision-making. We also explore what happens when we have rational
expectations but exhibit irrational behaviour. Duflo ends off the lecture by concluding that we
should prioritise effective insurance for the poor, bring important opportunities to their
attention and enable them to set attainable, achievable goals.
India spent 2% of its GDP (US$28.6b) last year, on anti-poverty programs, a higher
proportion than any other Asian country, but it has failed to eradicate poverty because of
widespread corruption and faulty government administration. One of the primary setbacks
was “leakages”: referring to government officials and middlemen stealing the rations. For
instance, 59% of the grain allocated for public distribution to the poor did not reach those
households. As important as what governments can do, is what they should not do.
Governments should avoid posing a setback to the issue itself; that means tackling
corruption and administrative failure at its root. As Duflo discussed, trust and administrative
barriers are key factors in determining the efficacy of a poverty-alleviating environment. A
trustworthy government committed to going on ground to successfully deliver information to
its people, lifts the hopes and dreams of the people, motivating them to succeed. Promoting
norms of good governance is essential in creating an environment conducive for
empowerment to thrive. As seen earlier, empowerment should be driven by those meant to
benefit and this warrants a shift in focus towards building autonomy among the poor as the
first stage of sustaining any process of empowerment. Policies alone are barely sufficient to
achieve tangible social change. The underlying challenge is redefining social and cultural
norms that create the interactions of power and disadvantage between the various social
groups. Governments can intervene to help transform these values and play an important
yet subtle role in creating an empowering environment to escape poverty.