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Fighting poverty in developing countries: households,
markets and institutions

Contact Bocconi University for this project

Eliana La Ferrara
Full Professor of Development Economics
Department of Economics
Bocconi University
Via Sarfatti 25, 20136 Milan, Italy

Bocconi University

Recent developments in the fight against poverty seem to have acknowledged that it is crucial to understand the microeconomic causes of poverty starting from individuals and households. Yet, we do not yet understand well how household-level interventions should be combined with policies aimed at targeting market imperfections or institutional weaknesses. We propose to combine the analysis of these factors to reach a deeper understanding of how effective policies should be designed. The proposed methodology will include as an essential element a rigorous empirical analysis of the phenomena under study, using original data to be collected by the researchers.

Questions addressed will include the following:
1. What is the role of gender in household decisions, and can women empowerment lead to better economic outcomes in developing countries?
2. What instruments are available to shape individual preferences towards desirable outcomes in the areas of health and education?
3. Can we identify individuals most at risk of extreme poverty and vulnerability and propose suitable policies to help them? Possible applications include conflict countries and forced migration.
4. What is the relationship between household decisions, market imperfections and institutional design?

Relevance to future of European societies
When we look at the evolution of the field of development economics in the US in recent years, we cannot fail to recognize that there has been enormous interest on behalf of the students and of academic institutions, which in turn has stimulated a vivid debate between academia and organizations like the World Bank or other NGOs. Europe is lagging behind in this respect, and by a long margin. Yet, European governments are becoming more and more aware of the crucial role that developing countries play in today¿s world, and need to redesign their role in the face of the dramatic socio-political changes that have occurred in these countries in recent years. For geographical and historical reasons, Europe has the potential to play a leading role in lifting some of the poorest nations out of poverty. Rigorous research can help design and implement effective interventions.
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