[hepr-vn] nstruments of development: Randomization in the tropics

[Vern Weitzel]

Subject: 	[EQ] Instruments of development: Randomization in the tropics
Date: 	Fri, 17 Jul 2009 10:52:42 -0400
From: 	Ruggiero, Mrs. Ana Lucia (WDC) <ruglucia at PAHO.ORG>
Reply-To: 	Equity, Health & Human Development <EQUIDAD at LISTSERV.PAHO.ORG>
To: 	EQUIDAD at LISTSERV.PAHO.ORG



*Instruments of development:
Randomization in the tropics, and the search for the elusive keys to
economic development*


*Angus Deaton -Research Program in Development Studies - Center for
Health and Wellbeing*

*Princeton** University** - January, 2009*



Available online PDF [56p.] at:
 
http://www.princeton.edu/~deaton/downloads/Instruments%20of%20development%20v1d_mar09_all.pdf 





“……….There is currently much debate about the effectiveness of foreign
aid and about what kind of projects can engender economic development.
There is skepticism about the ability of econometric analysis to resolve
these issues, or of development agencies to learn from their own
experience. In response, there is movement in development economics
towards the use of randomized controlled trials (RCTs) to accumulate
credible knowledge of what works, without over-reliance on questionable
theory or statistical methods.



When randomized controlled trials RCTs are not possible, this movement
advocates quasi-randomization through instrumental variable (IV)
techniques or natural experiments. I argue that many of these
applications are unlikely to recover quantities that are useful for
policy or understanding: two key issues are the misunderstanding of
exogeneity, and the handling of heterogeneity.



I illustrate from the literature on aid and growth. Actual randomization
faces similar problems as quasi-randomization, notwithstanding rhetoric
to the contrary. I argue that experiments have no special ability to
produce more credible knowledge than other methods, and that actual
experiments are frequently subject to practical problems that undermine
any claims to statistical or epistemic superiority.



I illustrate using prominent experiments in development. As with IV
methods, RCT-based evaluation of /projects /is unlikely to lead to
scientific progress in the understanding of economic development. I
welcome recent trends in development experimentation away from the
evaluation of projects and towards the evaluation of theoretical
mechanisms…..”




     *Development Experiments: Ethical? Feasible? Useful?
 
*http://blogs.nyu.edu/fas/dri/aidwatch/2009/07/development_experiments_ethica.html

     William Easterly on July 16, 2009