Angus Deaton, the Nobel-winning economist, has done a lot of great work lately on “deaths of despair” in America. Recently, he went on Julia Galef’s “Rationally Speaking” podcast and discussed this research. It’s a good interview, and I recommend the whole thing.
But Deaton is also a harsh critic of randomized controlled trials (RCTs) in development economics, and he also discussed this with Galef. At the end of the podcast, they had this amusing exchange:
Julia Galef: Well, I don't know what the people you're complaining about are doing, but I imagine if you're testing a specific intervention -- like giving out anti-malarial bed nets -- the cases in different countries or different regions aren't going to be identical, but it's still pretty similar, what you're doing from one region to the other. You're giving out bed nets.
Angus Deaton: I don't agree, because all the side effects, which are the things we're talking about, are going to be different in each case. And also, just to take a case -- we know what reduces poverty, what makes people better off: it's school teachers, it's malaria pills, it's all these things.
Julia Galef: How do we know that, though?
Angus Deaton: Oh, come on.
Julia Galef: No, I'm sorry, that was not a rhetorical or a troll question.
Angus Deaton: Really? I don't know how you get out of bed in the morning. How do you know that when you stand up, you won't fall over? I mean, there's been no experiments on that. There's never been an experiment on aspirin. Have you ever taken an aspirin?
Julia Galef: So, sorry, you think that increasing the number of schoolteachers -- or paying them better, or some intervention on school teachers causes people to be better off -- that that claim is as obvious as gravity?
Angus Deaton: It's pretty obvious. But that's not the point I'm trying to make.
What the heck is Deaton talking about here??
First of all, it’s pretty bizarre to say that there’s never been an experiment on aspirin. If I go to PubMed and search for “aspirin randomized controlled trial”, I get 7,586 results. There are reportedly 700 to 1000 clinical trials conducted on aspirin every year. There were also experiments involved in the invention of aspirin; people knew that salicylic acid helped with headaches, but extracting and buffering the chemical were both non-trivial tasks.
OK, but do we really need those experiments to know that aspirin helps get rid of headaches? That’s Deaton’s intended point here — that there are some things you just know will work, because of common sense and accumulated wisdom, and you don’t need a fancy RCT to know they’ll work. Just do the things that reduce poverty — provide more school teachers and malaria pills, etc. — and don’t worry about testing to verify the obvious.
But what if it’s not obvious? We know that in general, education reduces poverty. But that doesn’t mean that specific educational interventions reduce poverty — or that they’re worth the cost, or that they’re better than alternatives.
For example, as Jason Kerwin pointed out on Twitter, Indonesia’s experiment with doubling teacher salaries didn’t improve student learning outcomes (and so probably didn’t help much with poverty either). A 2007 study in Tanzania found that “high primary enrolment rates in the past did not lead to the realisation of the associated developmental outcomes”.
And Nancy Cartwright, who is Deaton’s co-author on his most famous critique of RCTs, describes how an experiment to double the number of teachers per student in California failed to improve outcomes — despite having encouraging evidence from an RCT.
The point here isn’t that education doesn’t reduce poverty; there are plenty of other cases where it did. The point is that educational programs don’t always work. And empirical research is how you figure out which programs work and which don’t.
And no, RCTs don’t always give you the right answer (as the California example demonstrates). To really get a full picture of the evidence you need policy experiments, natural experiments, and so on. But you do need evidence! Simply falling back on our intuition and wisdom when making policy is not enough!
One vivid illustration of the inadequacy of intuition and wisdom is that different people’s wisdom leads them to very different conclusions. For example, Lant Pritchett, also a renowned development economist and also a harsh critic of RCTs, strongly criticized the awarding of the 2019 Econ Nobel to three development economists who used RCTs to study the effectiveness of antipoverty programs. In a memorable Facebook rant, he declared:
Poverty rates across countries are almost perfectly correlated with the "typical" (median) income/consumption in that country...If poverty programs are defined as those that improve poverty rates, conditional on the typical level of income in a country, they account for less than 1 percent of total variation in poverty...
A commitment to "study global poverty" would probably ask: "what accounts for the observed reductions (or lack thereof) in poverty across time and across countries?" and discover that variation in the size and efficacy of poverty programs had little or nothing to do with poverty reduction...
So a focus on applying a method to the study of the effectiveness of (mostly) NGO programs is a commitment to not study global poverty.
So to Pritchett, RCTs are next to useless, because we know what reduces poverty. It’s economic growth!
And to Deaton, RCTs are next to useless, because we know what reduces poverty. It’s schoolteachers and malaria pills!
Each of these guys believes that we know what reduces poverty, and yet their answers don’t agree. The very kinds of “NGO programs” Pritchett dismisses are the things Deaton says are the obvious solution.
It would be kind of fun to get these guys in a room and have them hash it out. But the point here is that even among people who are obviously very wise, and have obviously well-developed intuition, answers to big questions like poverty reduction can vary dramatically.
This is why we can’t replace empirical evidence with “Oh, come on”. Even the most erudite and brilliant practitioners get things wrong fairly frequently. Empirical research, at least if done properly, doesn’t rely on any one person’s intuition; it’s a group effort, with large numbers of people checking and rechecking each other’s work, and holding that work to quantifiable and rigorous standards. The collective intelligence of science is more powerful than the expertise of any sage.
This is of course true in medicine as well; the greatest doctors on Earth will swear up and down that they’ve seen this or that treatment work miracles on their patients, and then RCTs come along and find the cure was no better than a placebo. This pandemic has vividly and cruelly demonstrated the necessity of high-quality evidence when evaluating cures.
In any case, Deaton’s critiques of RCTs are good, but the answer is to supplement them with other kinds of careful empirical evidence — not to simply say “Oh, come on” and decide that we already know the answers.
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