Experimental approach to development economics: a review of issues and options

ABSTRACT

Randomized control trials (RCTs) are recognized as the preferred tool of analysis in modern development economics literature/research and policy evaluation. This may lead to methodologies, including case studies, tabular analysis, simple regressions, taking a back seat. This survey explores the implications of such a methodological hierarchy and the implications of preoccupation with a particular evidence/methodology for research and policy. Similar developments in macroeconomic modelling are also discussed. Major advantages and limitations of RCTs and the attempts to address them are highlighted. The article argues that preoccupation with a methodology can sometimes lead to important inquiries for research and policy getting side-lined on methodological considerations. This leads to inferences favouring a particular technique/methodology or issue. Focusing solely on methodologies that emphasize quantifying the ‘effect’ may not be appropriate to address all questions relevant to development. As policies involve multiple and conflicting social concerns, methodological pluralism may be preferable.

KEYWORDS:

• Development economics
• RCTs
• methodology
• macroeconomic modelling
• policy

JEL CODES:

• A10
• B0
• B41
• O10
• O20

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 RCTs were considered to control for known and unknown confounding factors, enable Fisherian significance testing, minimize selection-bias, allow blinding and accurately estimate treatment effect (Worrall, 2002; 2007).

2 The 3ie portal included over 10000 IEs records as of April, 2022 (Kaufman et al., 2022).

3 Cartwright (2012) points out the problem of underlying assumption that there is one specific ‘true’ impact which can be discovered through economic experiments.

Additional information

Notes on contributors

C. S. C. Sekhar

C. S. C. Sekhar is currently Professor of Economics at the Institute of Economic Growth (IEG) and former Honorary Director of Agricultural Economics Research Centre, University of Delhi, India. His major areas of research and teaching include applied econometrics; agricultural markets & price formation; international commodity markets and agricultural trade.

Namrata Thapa

Namrata Thapa is an assistant professor of Economics at the Birla Institute of Management Technology (BIMTECH). Previously, she was working with the Institute of Economic Growth. Her research interests span across Development Economics, Institutions and Innovation Studies, Agriculture and Rural Development, and Gender Economics.