Economic Development

The Top 10 Books on the Economics of Poverty

A suggested reading list to provide a foundation for understanding development, aid, and poverty.

The growing community of students and professionals who are turning their attention to social endeavors as careers is inspiring. As someone who made the career switch from strategy consulting to international development work, I remember all too well the anxiety of trying to understand the different theories, familiarize myself with the players, and become fluent in the languages of this community. In addition to listening more than speaking, cultivating curiosity, and abandoning the fear of looking stupid when asking, “What does [fill in the blank] mean?”—in my first years in this new space, I asked for recommendations of books that would provide a foundation for my understanding of development, aid, and poverty. I recently revisited these recommendations as a member of the Opportunity Collaboration, and the following is a suggested reading list to provide a foundation for your adventures.

The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (2006)
by William Easterly
Easterly, a celebrated economist, presents one side in what has become an ongoing debate with fellow star-economist Jeffrey Sachs about the role of international aid in global poverty. Easterly argues that existing aid strategies have not and will not reduce poverty, because they don’t seriously take into account feedback from those who need the aid and because they perpetuate western colonial tendencies.

The End of Poverty: Economic Possibilities for Our Time (2006)
by Jeffrey Sachs
Taking an almost entirely diametrical approach than Easterly, Sachs outlines a detailed plan to help the poorest of the poor reach the first rung on the ladder of economic development. By increasing aid significantly to provide the basic infrastructure and human capital for markets to work effectively, Sachs argues such investment is not only economically sound but a moral imperative.

The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It (2007)
by Paul Collier
Economist and Africa expert Collier analyzes why a group of 50 nations, home to the poorest one billion people, are failing. Considering issues such as civil war, dependence on extractive industries, and bad governance, he argues that the strongest industrialized countries must enact a plan to help with international policies and standards.

The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (2009)
by C.K. Prahalad
Prahalad, a business strategy professor, was among the first to argue that the fastest growing market in the world was made up of the world’s poorest people. He details the purchasing power of this segment, and advocates that big businesses should learn how to understand this population’s needs in order to develop products that address both economic mobility and corporate growth and profit.

Creating a World Without Poverty: Social Business and the Future of Capitalism (2009)
by Muhammad Yunus
Yunus, an economist and Nobel Prize Winner, was among the first to describe a social business as one that is modestly profitable but designed primarily to address a social objective. Using this approach, he argues that modern-day capitalism is too narrowly defined, particularly in its emphasis on profit maximization. By including social benefits in the equation, he believes that markets and the poor themselves can alleviate poverty.

Out of Poverty: What Works When Traditional Approaches Fail (2009)
by Paul Polak
Polak, a psychiatrist, has applied a behavioral and anthropological approach to alleviating poverty, developed by studying people in their natural surroundings. He argues that there are three mythic solutions to poverty eradication: donations, national economic growth, and big businesses. Instead, he advocates helping the poor earn money through their own efforts of developing low-cost tools that are effective and profitable.

Dead Aid: Why Aid is Not Working and How There Is a Better Way for Africa (2009)
by Dambisa Moyo
Moyo, a Zambia-born economist, asserts that aid is not only ineffective—it’s harmful. Her argument packs a strong punch because she was born and raised in Africa. Moyo believes aid money promotes the corruption of governments and the dependence of citizens, and advocates that an investment approach will do more to help reduce poverty than aid ever could.

Poor Economics A Radical Rethinking of the Way to Fight Global Poverty (2011)
by Abhijit Banerjee & Esther Duflo
Using the framework of randomized control trials, which allow for large-scale data collection to evaluate the effectiveness of an intervention, these two development economists assess the impact of a wide range of development programs in alleviating poverty. They have found that most programs have not been designed with a rigorous understanding of the behaviors and needs of the poor or how aid effects them, they advocate that for programs to be successful they must be designed with evidence gathered from direct interaction with those who they are meant to benefit.

Development As Freedom (2000)
by Amartya Sen
A Nobel Prize winning economist, Sen examines the essential role that elementary freedoms, social and political, have in improving the prosperity of the society at large. Although his focus on human welfare as a central aspect of economic thought is not universally accepted among economists, this approach inserts elements of ethics into a field from which it is often not emphasized. Although this is a difficult read, the concepts included are important to the dialogue about the causes and remedies to the economics of poverty.

Good to Great and the Social Sectors (2005)
by Jim Collins
Meant to accompany the seminal business book Good to Great that examined why companies succeed or fail and found nine key aspects, including: leadership, simplicity, discipline and innovation, this work focuses on applying these lessons to the nonprofit sector. While more focused on management of organizations than macro economic issues, this short and easy to read monograph suggests a roadmap of how those interested in addressing issues of poverty should pursue these efforts.

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  • BY Richard Lucas

    ON January 19, 2012 09:43 AM

    What about “The Beautiful Tree” by Prof James Tooley?  It’s compulsory reading for anyone who thinks that the way to solve educational problems in developing countries is to through spending more money, without careful programme design

  • Justin Broadbent's avatar

    BY Justin Broadbent

    ON January 19, 2012 11:28 PM

    Several factors that make the above possible have been ignored. Many causes of poverty may be truthfully addressed by the study of economics, not all. Foundational issues are ignored at our peril. Too often seekers of truth or good are blinded by their zeal and honestly believe that with excessive motivation and sufficient funds they can conquer these ills. We often hear “this system can work, it just hasn’t been done right before”. Those are the words of an idealist that will not allow himself to learn or admit he is wrong. Without a system that can evolve to meet the needs of society, growth is limited and ultimately doomed to failure. The fertile ground factors are examined in the very insightful but onerous book “Guns, germs and steel”.

    An overview of history should be plain to illuminate the successes and failures of social and political systems, and yet so many refuse to accept success in favor of utopia.

  • BY Jeanette Patindol

    ON January 22, 2012 02:27 AM

    I would recommend Riane Eisler’s “Caring Economics:  The Real Wealth of Nations” which emphasizes the need to expand the traditional economic map and value caring activities and create a framework for these in a new economy.  It integrates a gender perspective, too, in the wealth and poverty dynamics.

  • BY Peter Smith

    ON January 23, 2012 02:52 PM

    Progress & poverty by Henry George, 1879.

    The silver Bullet by Fred Harrison, 2008.

    Both Books show there is a simple solution to poverty, simply tax the value of land and natural resources.

    Both books show that by capturing land & resources rents as a source of government revenue allows enterprise to flourish and the value of labour to be retained by those that tiol. It is the disparity of a small elite owning the rents of land and natural resources that ensures poverty will always be with us. As a monopoly so the rents of land and natural resources always rises, capturing the surplus income on any society rich or poor. Taxing that monopoly value will return it all and remove that burden from the majority of the population.

  • “Fast Living” How the Church Will End Extreme Poverty by Dr. Scott Todd
    The book presents statistics that highlight how much has already been accomplished to reduce the amount of people living in extreme poverty and how the rest of the work can and will be accomplished.

    “When Helping Hurts” by Steve Corbett and Brian Fikkert
    The book provides foundational concepts and clear principles for helping the poor without hurting them. It then presents proven interventions and relevant applications for churches to use when ministering to the poor both at home and abroad, including advice about short-term missions programs.

  • BY Auren Kaplan

    ON February 1, 2012 06:41 PM

    I would absolutely add to this list “Capitalism at the Crossroads: Next Generation Strategies for a Post-Crisis World” by Stuart L. Hart, Chair of Sustainable Global Enterprise at Cornell School of Management. It is an eye opener and calls for a sharply defined sustainability path that includes growth opportunities amongst the bottom four billion of the economic pyramid. This book is readable, educational, and paradigm shifting.

  • Thanks for great info.

  • Rachel's avatar

    BY Rachel

    ON March 2, 2012 07:54 AM

    “Pathologies of Power” by Paul Farmer is also eye-opening.

  • Shouvik 's avatar

    BY Shouvik

    ON March 5, 2012 03:04 AM

    Please don’t miss out “Pedagogy of the Oppressed” Paulo Freire ( though not from the economics point of view”

  • Diane Biet's avatar

    BY Diane Biet

    ON March 6, 2012 02:38 PM

    I read 7 out of your list of 10 and so far, I couldnt agree more… Thanks for the list.

  • Charlie Glynn's avatar

    BY Charlie Glynn

    ON March 16, 2012 04:33 PM

    Thanks for including Paul Polak’s Out of Poverty -  I give copies of this book away to my friends.  A few I would recommend:

    “From Subsistence to Exchange”, Peter Bauer (Ms. Moyo dedictes her book to him)

    “Making Poor Nations Rich”, Benjamin Powell, Ed.  (Subtitled, Entreprenuership and the Process of Economic Development”).

    “Helping People Help Themsleves”, David Ellerman (very much a philosophical look at the roots of “helping”, with an identified key factor being the concept of “Autonomy-Respecting Help”)

    While not specifically having to do with the economics of poverty, I would also highly recommend Jane Jacobs, The Economy of Cities” and “Cities and the Wealth of Nations” for an understanding of the roots of development, and their relation to innovation at a very personal level.

  • Akshat Shukla's avatar

    BY Akshat Shukla

    ON May 3, 2012 12:07 AM

    I’d recommend

    1. “Portfolios of the Poor” by Daryl, Jonathan and Stuart
    2. “Next Generation Business Strategies For The Base Of The Pyramid : New Approaches For Building Mutual Value - Ted London, Stuart L Hart

  • Jay Baker's avatar

    BY Jay Baker

    ON July 24, 2012 02:57 AM

    As another way into understanding aid and poverty, I’ve written a novel (Mr. Something) based around those themes. If you’d be interested in doing a review, I’d love to send you a copy.

  • BY Alain Kongo

    ON October 12, 2014 12:07 PM

    Personally I recommend C.K. Prahalad’s The Fortune at the Bottom of the Pyramid, and the book Social Entrepreneurship, The Secret to Starting a Business Worth Living For.

    A good review of the book can be found Here.

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