Using randomized controlled trials to test methods for addressing global poverty

Here is a relatively new way to test options for addressing poverty: use randomized controlled trials.

What Kremer was suggesting is a scientific technique that has long been considered the gold standard in medical research: the randomized controlled trial. At the time, though, such trials were used almost exclusively in medicine—and were conducted by large, well-funded institutions with the necessary infrastructure and staff to manage such an operation. A randomized controlled trial was certainly not the domain of a recent PhD, partnering with a tiny NGO, out in the chaos of the developing world…

The study wound up taking four years, but eventually Kremer had a result: The free textbooks didn’t work. Standardized tests given to all students in the study showed no evidence of improvement on average. The disappointing conclusion launched ICS and Kremer on a quest to discover why the giveaway wasn’t helping students learn, and what programs might be a better investment.

As Kremer was realizing, the campaign for free textbooks was just one of countless development initiatives that spend money in a near-total absence of real-world data. Over the past 50 years, developed countries have spent something like $6.5 trillion on assistance to the developing world, most of those outlays guided by little more than macroeconomic theories, anecdotal evidence, and good intentions. But if it were possible to measure the effects of initiatives, governments and nonprofits could determine which programs actually made the biggest difference. Kremer began collaborating with other economists and NGOs in Kenya and India to test more strategies for bolstering health and education…

In the decade since their founding, J-PAL and IPA have helped 150 researchers conduct more than 425 randomized controlled trials in 55 countries, testing hypotheses on subjects ranging from education to agriculture, microfinance to malaria prevention, with new uses cropping up every year (see “Randomize Everything,” below). Economists trained on randomized controlled trials now work in the faculties of top programs, and some universities have set up their own centers to support their growing rosters of experiments in the social sciences.

If this is indeed a relatively new approach, what took so long? Perhaps the trick was thinking that experiments, typically associated with very controlled laboratory or medical settings, could be preformed in less controlled settings. As the article notes, they are not easy to set up. One of the biggest issues might be randomizing enough people into the different groups to wash out all of the possible factors that might influence the results.

This also seems related to the uptick in interest in natural experiments where social scientists take advantage of “natural” occurrences, perhaps a policy change or a natural disaster, to compare results across groups. Again, laboratories offer controlled settings but there are only so many things that can be addressed and the number of people in the studies tend to be pretty small.

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