Last week, the Nobel Prize Committee awarded its prize for economics to Amartya Sen for his contributions to welfare economics. Sen’s commendation marked a departure for the Nobel Committee, which traditionally has given its economics prize to people who work in fields like derivatives and incentive theory. This change is a welcome one and certainly one of which Alfred Nobel would approve.
The Nobel Memorial Prize in Economic Sciences was instituted by the Central Bank of Sweden in 1968 as a memorial to Alfred Nobel. Although not one of the original five awards created by Nobel’s will, the committee attempts to apply similar standards to the science of economics as they do for physics, chemistry, literature, medicine and peace.
Early winners of the economics award tended to focus their research on benefiting humanity, rather than doing abstract, esoteric analysis. Since then, however, the award has been given to people who, while certainly doing important and excellent research, have not necessarily studied areas of economics that particularly fit the standards that Nobel himself created.
Sen was born in India in 1933. He received his Ph.D. from Cambridge and formerly was a professor at Harvard. He currently is the Master of Trinity College at Cambridge. He has spent his career researching the very poor and how best to protect their interests. His most widely recognized work, “Poverty and Famines: An Essay on Entitlement and Deprivation,” has helped relief agencies better tailor their efforts during famines. Sen discovered that during many famines, the countries involved often have enough food to feed all their citizens, but the citizens simply cannot afford the food. His work has also focused on the dynamics of elections and ensuring that they accurately represent the force of peoples’ convictions.
Sen’s research is important not only because it is of extremely high quality, but also because it focuses on areas that receive little to no attention by most researchers. In the preface to a recent work on liberalizing India, Sen wrote, “So much energy and wrath have been spent on attacking or defending liberalization and deregulation that the monumental neglect of social inequalities and deprivations in public policy has received astonishingly little attention in these debates.” In general, he is correct. There are people concerned with problems in developing countries, but economic research tends to focus on the developed world — specifically the upper and business classes of the developed world.
Nobel specified in his will that prizes should go to the person who “during the preceding year, shall have conferred the greatest benefit to mankind.” While there is certainly nothing wrong with studying the effect of incentives on asymmetric information, the benefits that this type of research confers upon humanity is often unclear. Sen’s research, on the other hand, has already had unmistakable effects on the lives of many people.
The Nobel Prize Committee is to be commended for giving this year’s award to such a worthy recipient. Certainly, there will not always be someone who has done economic research of Nobel Prize quality and who fits the constraints of Nobel’s will. When there is, though, that person or persons should be given first consideration, in honor of Alfred Nobel’s wishes.