The Unassuming Economist

From Dani Rodrik’s preface to Santiago Levy’s Book:

“A few years ago as I was finishing up my book Economics Rules: The Rights and Wrongs of the Dismal Science (Norton 2015), I realized that the manuscript contained a serious omission. I had written at length about how and why economists misuse the powerful tools of their discipline, but had said little about the successes. So I decided I would open the book with three vignettes of economics at its best. Each vignette would have its hero: an economist who combined economic models with real-world judgement to make life better for lots of people.

Santiago Levy was one of the three heroes I chose. (The names of the other two heroes will let the reader gauge how demanding was the standard I applied: John Maynard Keynes and William Vickrey.) Santiago was the principal force behind the anti-poverty program Progresa in Mexico that quickly became a model for many other countries. This was an innovative, incentive-based program that was novel at the time, in 1997. It replaced inefficient price subsidies with direct cash grants to poor families as long as their children were kept in school and received periodic health checks. So successful was the program that subsequent Mexican political administrations would seek credit for it by renaming it; hence Progresa would turn into Oportunidades, which eventually became Prospera.”

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