Economist and Nobel laureate Abhijit Banerjee

‘The poorer you are, the more expensive water is’

Since we pretend partly that water is free, we have to ration it. When it is rationed, it is rationed to the poor, says economist and Nobel laureate
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Preetha Banerjee (PB): How does the politics around water access impact the development of communities?

Abhijit Banerjee (AB): With water we have this kind of rhetorical move that complicates the issues around its access, which is that it is supposed to be free. But in fact, the poorer you are, the more expensive it is in time, quality and every dimension.

Because we pretend partly that it is free, then of course we have to ration it, and when you ration it, you ration it to the poor. And we have very complicated mechanisms for doing that. And then the fact that we ration it means other mechanisms like the common pool get drained. This is especially the case with drinking water.

PB: How do you link ecological degradation with development?

AB: One of the challenges of development, and I think it is a challenge that very few countries have managed well, is that there are things that seem invisible. I think a lot of the shared resources tend to look invisible, and then by the time we wake up, we have lost a lot of them. And that is a general pattern.

It is the same with overtourism in Europe, and it is the same with overuse of water in India—the logic is very similar. And then the problem is that once you are in a place where there is a crisis, then things get worse, resources get privatised. And when things get privatised, the people who cannot afford them get hurt.

PB: Why did you choose the medium of short films to communicate your message or research?

AB: I tend to think that economics is placed in the wrong place—it is seen as being a technical discipline, one that is for experts. Then the experts come and often, you know, do a snow job on us. Everybody should be understanding economics. So, I was interested in creating conversations which would be participatory. I do not think the ideas are that hard, but I think the rhetoric and the language used to narrate them are often forbidding. We end up creating divides between experts and non-experts, which are counterproductive.

This interview was originally published in the November 1-15, 2025 print edition of Down To Earth 

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