Sector: international development

Ricardo Hausmann at Project Syndicate: “Many organizations, from government agencies to philanthropic institutions and aid organizations, now require that programs and policies be “evidence-based.” It makes sense to demand that policies be based on evidence and that such evidence be as good as possible, within reasonable time and budgetary limits. But the way this approach is being implemented may be doing a lot of harm, impairing our ability to learn and improve on what we do.

The current so-called “gold standard” of what constitutes good evidence is the randomized control trial, or RCT, an idea that started in medicine two centuries ago, moved to agriculture, and became the rage in economics during the past two decades. Its popularity is based on the fact that it addresses key problems in statistical inference.

For example, rich people wear fancy clothes. Would distributing fancy clothes to poor people make them rich? This is a case where correlation (between clothes and wealth) does not imply causation.

Harvard graduates get great jobs. Is Harvard good at teaching – or just at selecting smart people who would have done well in life anyway? This is the problem of selection bias.

RCTs address these problems by randomly assigning those participating in the trial to receive either a “treatment” or a “placebo” (thereby creating a “control” group). By observing how the two groups differ after the intervention, the effectiveness of the treatment can be assessed. RCTs have been conducted on drugs, micro-loans, training programs, educational tools, and myriad other interventions….

In economics, RCTs have been all the rage, especially in the field of international development, despite critiques by the Nobel laureate Angus Deaton, Lant Pritchett, and Dani Rodrik, who have attacked the inflated claims of RCT’s proponents. One serious shortcoming is external validity. Lessons travel poorly: If an RCT finds out that giving micronutrients to children in Guatemala improves their learning, should you give micronutrients to Norwegian children?

My main problem with RCTs is that they make us think about interventions, policies, and organizations in the wrong way. As opposed to the two or three designs that get tested slowly by RCTs (like putting tablets or flipcharts in schools), most social interventions have millions of design possibilities and outcomes depend on complex combinations between them. This leads to what the complexity scientist Stuart Kauffman calls a “rugged fitness landscape.”

Getting the right combination of parameters is critical. This requires that organizations implement evolutionary strategies that are based on trying things out and learning quickly about performance through rapid feedback loops, as suggested by Matt Andrews, Lant Pritchett and Michael Woolcock at Harvard’s Center for International Development.

RCTs may be appropriate for clinical drug trials. But for a remarkably broad array of policy areas, the RCT movement has had an impact equivalent to putting auditors in charge of the R&D department. That is the wrong way to design things that work. Only by creating organizations that learn how to learn, as so-called lean manufacturing has done for industry, can we accelerate progress….(More)”