Schelling and Neustadt winners named

A Nobel Prize-winning professor, renowned for his research on the psychological elements of economic decision making, and the founder of an innovative microfinance lending institution are recipients of the 2006 Thomas C. Schelling and Richard E. Neustadt Awards. The winners were announced at a May 4 event hosted by the Kennedy School of Government (KSG).

Daniel Kahneman, Eugene Higgins Professor of Psychology at Princeton University, and winner of the Nobel Prize for economics in 2002, was presented with the Schelling Award, bestowed annually to an individual whose “remarkable intellectual work has had a transformative impact on public policy.”

Muhammad Yunus – founder of the international “Grameen movement” (refers to Grameen Bank), which has loaned more than $2 billion to the poorest people in Bangladesh – was presented with the Neustadt Award. This award is given annually to an individual who has created “powerful solutions to public problems, drawing on research and intellectual ideas as appropriate.” Both recipients were awarded a $25,000 prize.

The David Rubenstein Fund for Kennedy School Excellence provided funding for the awards. The fund was established in 2004 by a generous $10 million gift from David M. Rubenstein, co-founder and managing director of the Carlyle Group, one of the world’s largest private equity firms.

“These awards are the highest Kennedy School honor. They recognize the extraordinary wisdom, vision, and significance of the ideas and work of these people. We’re proud to honor them in the name of two of the people who were so instrumental in the creation of the modern Kennedy School,” said Kennedy School Dean David Ellwood.

Kahneman is acclaimed for his integration of psychological research into economic science. A co-recipient of the Nobel Prize for economics in 2002, Kahneman began his prize-winning research in the 1960s seeking to increase understanding of how people make economic choices. His research with Amos Tversky on decision making under uncertainty resulted in the formation of a new branch of economics known as prospect theory. Kahneman is also a professor of public affairs at Princeton’s Woodrow Wilson School of Public and International Affairs.

The Grameen Bank has provided credit to more than 2 million of Bangladesh’s poorest citizens. This innovative banking system – providing unsecured credit to some of the world’s poorest people – began as an action-research project at Chittagong University, and later grew into a full-fledged bank. Yunus was a Fulbright Scholar at Vanderbilt University, where he received his Ph.D. in economics in 1969. He now teaches at the economics department at Chittagong University in Bangladesh.

Thomas C. Schelling and Richard E. Neustadt were instrumental in the founding of the modern-day KSG. Schelling, the Lucius N. Littauer Professor of Political Economy emeritus, is internationally renowned for his work on game theory, specifically in regards to the dangers of nuclear war. A 2005 Nobel Prize recipient, Schelling has held various positions in the White House and the executive office of the president, and is now Distinguished University Professor at the University of Maryland School of Public Policy.

Neustadt, the Douglas Dillon Professor of Government emeritus, was an eminent presidential scholar and adviser to three U.S. presidents. He served as founding director of the Institute of Politics from 1965 to 1971, and as associate dean of KSG until 1975. Neustadt died in 2003.