The Power and Pitfalls of Experiments in Development Economics: Some Non-Random Reflections
Applied Economic Perspectives and Policies, 2010
Posted: 23 May 2011
Date Written: October 1, 2010
Abstract
Impact evaluation based on randomized controlled trials (RCTs) offers a powerful tool that has fundamentally reshaped development economics by offering novel solutions to long-standing problems of weak causal identification. Nonetheless, RCTs suffer important and under-appreciated pitfalls, some of which are intrinsic to the method when applied to economic problems, others that are the result of methodological boosterism. Among the pitfalls are ethical dilemmas, uncontrollable treatments that result in a ‘faux exogeneity,’ distortion of the research agenda, and a tendency to estimate interventions' abstract efficacy rather than their effectiveness in practice. We illustrate these points through the literature on smallholder capital access and productivity growth. Ultimately, we argue for a methodological pluralism that recognizes all identification strategies' limitations.
Keywords: Ethics, evaluation, identification, randomized controlled trials
JEL Classification: A10, B00, O10, O30
Suggested Citation: Suggested Citation