When Abhijit Banerjee and Esther Duflo were announced as two of this year’s Nobel Prize winners, it prompted a fresh flurry of public critiques of their work in development economics. From voices as diverse as Oxfam’s Duncan Green and Marginal Revolution’s Alex Tabarrok, many economists and aid experts have cautioned against pinning all our poverty reduction hopes on their findings.
At the heart of the debate is whether randomized-control trials (RCTs), the so-called gold standard of social science research, are ethical and efficacious when it comes to economic and social intervention. On the ethics, most of the issues are somewhat familiar—who wants to willfully withhold treatment from a control group of vulnerable, low-income human subjects, and what does informed consent look like in these acute circumstances? The efficacious question is more complicated. In short, RCT findings in the context of complex developing economies are often not as generalizable as one would hope, meaning you can’t apply the findings at scale in other contexts. This makes them less useful if you are cautious about this fact and very dangerous if you are not.
So what’s the alternative? The question helped to animate a recent full-day academic seminar co-hosted by Atlas Network and Institute for Humane Studies in Ft. Lauderdale, Florida to kick off the Southern Economic Association’s annual meeting. The event, “Poverty, Institutions, and Economic Development,” presented the latest research and insights from a diverse and impressive suite of experts including Dr. Michael Woolcock from Harvard University, Dr. Arvind Panagariya from Columbia University, IHS President Dr. Emily Chamlee-Wright, UFM President Dr. Gabriel Calzada, Dr. Tom Palmer of Atlas Network, and Dr. Peter Boettke of George Mason University, among others.