Economics as a discipline doesn’t always connect with the real world, but at least the Nobel laureates with an interest in development economics are working on something that matters. The new laureates have apparently been selected on the basis of their ‘experimental’ approach. I gave the subject a brief mention in my forthcoming book, The Poverty of Nations, but you’ll have to wait to next March before you can read it. Here, as a spoiler, are the sentences in the typescript I gave over to their evidence on Randomised Control Trials. The reference is to A Banerjee, E Duflo, 2011, Poor economics, published by Penguin.
Banerji and Duflo advocate a greater use of RCTs, but their own examples show cases where this fails. In one study they mention, it appeared that textbooks did not help education; that was misleading. In another, the evaluation was supposed to identify the influence of contraception on family size; it overlooked the importance for parental decisions of the prospects of children surviving to adulthood. Experiments and RCTs work by screening out extraneous information; the gaps that are left are only to be expected.