Experiments at heart of this year’s prize
India-born Abhijit Banerjee, his fellow MIT professor and wife Esther Duflo and Harvard’s Michael Kremer were awarded the 2019 Nobel Memorial Prize in Economic Sciences on Monday “for their experimental approach to alleviating global poverty”. HT explains the significance of their work and its influence on the world. discipline, it is likely to significantly boost the acceptability of this approach not just in academia, but also at the policy level. This is asking for the primacy of experiments, earlier associated with the pure sciences, in a social science discipline. not enough to fix irregular functioning of immunisation centres in order to fight low immunisation rates. Jamal Abdul Lateef Poverty Action Lab, which has been set up by Banerjee and Duflo at MIT, is involved in almost a thousand such experiments across the world.
What’s the philosophy behind this approach?
Banerjee and his co-awardees believe that because anti-poverty programmes are almost always designed by the elite, they have little idea about the actual preferences and constraints faced by the poor. This might lead to a situation in which even well-intentioned policies might not be able to achieve their objectives. Their argument: designing policies on the basis of RCTS can help eradicate such errors born of bias. between the two groups which were subjected to different versions of the policy and the belief that what worked in a particular situation would always work in other places.
Does this mean we should reject RCTS completely?
Not necessarily. Jean Dreze, an eminent development economist, has argued for seeing RCTS as a complementary tool to policy making rather than being the sole driver of policy making. His comments in a 2018 article are reproduced below.
“In short, I feel that economists need to be cautious and modest when it comes to giving policy advice, let alone getting actively involved in ‘policy design’. Their expertise and research can certainly contribute to more informed policy discussions and public debates. But if they give advice, it is best done as concerned citizens rather than plumber-like economists, in collaboration with others from different disciplines and walks of life. In the field of social policy, at least, I see no reason to privilege the advice of economists.”
None of this detracts from the value of RCTS (correctly understood), or from the case for evidence-based policy. If the idea is to bring more evidence to bear on public policy, there is much to be said for it. This endeavour, however, is likely to be all the more useful if we bear in mind that evidence involves more than RCTS, understanding more than evidence, and policy more than understanding.