VoxDev Development Economics S6 Ep2: Rethinking evidence in development economics
Jan 15, 2025
Lant Pritchett, a renowned development economist from the London School of Economics, joins Tim Phillips to challenge the reliance on rigorous evidence in policy-making. They discuss the limitations of RCTs and the importance of local context in understanding policy impacts, using Indonesia as an example. Pritchett calls for a return to holistic strategies over mere poverty alleviation, while also examining how emerging economies like India and China are reshaping development debates. The conversation highlights the critical balance between economic growth and sustainable development.
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Limitations of Rigorous Evidence
- Relying solely on rigorous evidence like RCTs for policy decisions is flawed.
- A homegrown OLS estimate, despite its limitations, can offer better predictive accuracy in specific contexts.
The Pants Analogy
- Imagine giving men pants based on their self-reported, often inflated, height.
- Using the true average height for all pants would lead to more errors than using the biased self-reported data due to the high variance in actual heights.
Indonesian Schooling
- In Indonesia, private schools primarily cater to wealthier, less academically inclined students.
- Using average RCT results would overestimate the impact of private schools, highlighting the importance of context-specific OLS data.