RTCs: building block for policymaking
Their studies have successfully identified market inefficiencies and other factors preventing households from escaping poverty traps and discovered effective ways to address these challenges. In addition, the transparency of the experimental method, and the fact that most experiments are conducted in partnership with governments, NGOs, and private companies, has facilitated scaling up the most effective interventions. As a result, local governments are equipped with sounder evidence on programs that work, and foreign aid money is spent more effectively. Today, it would be unthinkable for the World Bank and other international institutions to fund large-scale policies without first estimating their effects, if possible through a randomized experiment. In fifteen years, the three laureates and their colleagues have simply transformed both research and policymaking in economic development.
Fighting Poverty With Field Experiments: the Nobel Laureates’ Revolution
By: Vincent Pons – Harvard University
RCT: the new research method for development economics
David McKenzie argues that the production function for research using RCTs is fundamentally different from so much of the development (and economics) research that preceded it as it requires a large team of surveyors, field coordinators, policy implementors, research assistants, and more. He adds that one of the big innovations of Banerjee, Duflo and Kremer has been professionalizing this process through the creation of J-Pal, the Poverty Action Lab at MIT, putting thus in place an infrastructure that has enabled so many other development researchers to also conduct randomized experiments.
A Nobel Prize for Development RCTs!
By: David McKenzie – World Bank
Do RTCs handle the big questions?
Mainstream economics is moving away from grand theory, big questions, general models of interdependence and coordination, and classic problems and toward small-scale, incremental, experimental, and largely atheoretical measurement exercises. Schumpeter and Samuelson, Friedman and Becker (and of course the Austrians) are out, Raj Chetty is in. Among younger economists, the most heated debates are not about Keynesian versus New Classical or Austrian business cycle theories, partial versus general equilibrium approaches, or even socialism versus capitalism, but Stata versus R . In previous centuries, economists needed to know logic, rhetoric, and history. Then it became math and statistics. Now the most important skills are how to code – and how to conduct a RCT.
New Nobel Winners Are Latest Bad Sign for Economic Theory
By: Peter G. Klein – Baylor University
Knowledge from RTC can’t scale up to policies for national development
An impact evaluation with an RCT seems to be not really a tool for countries and their governments or for agencies interested in promoting development at all. Rather, it mostly seems a tool to guide that small part of the development process that is “charity” or “philanthropic” that is (a) going to give relative small amounts of money, (b) will not or cannot work though national (or state or local) governments, (c) has relatively “kinky” valuations (perhaps in part because they are rationing tiny resources) and (d) care about the ability of being able to attribute the gain in well-being causally to their specific intervention (rather than about indirect effects).
Randomizing Development: Method or Madness?
Author: Lant Pritchett
From: Oxford University
