Chris Barrett and Michael Carter have an interesting new paper in the latest issue of Applied Economic Perspectives and Policy, which is to the Agricultural and Applied Economics Association what the Journal of Economic Perspectives is to the American Economics Association.
Here is the 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 underappreciated 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.”
The paper offers interesting insights which I try to keep in mind as my coauthors and I are designing our randomized evaluation of an index insurance scheme for groups of cotton producers in Mali.
Although the paper focuses on development economics in the title, its conclusions can be applied to several fields of interest in the social sciences. Ultimately, I think we will converge toward an empirical approach in which hypothesis will be tested using several methods (e.g., randomized control trial; instrumental variables; regression discontinuity design, etc.) within the same research project.