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The Field Experiment Revolution in Development Economics

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Diversity of Experimental Methods in Economics

Abstract

“Once upon a time there was a field called development economics”—by this Paul Krugman started his review article on development economics a quarter century ago. “That field no longer exists,” he also added. The 1940s and 1950s were the eras of “high development theory” when development economics became one of the top fields in economics armed with a distinctive set of new ideas stressing pecuniary externalities arising from increasing returns technologies and imperfect market competition.

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Notes

  1. 1.

    In 2013, 6 out of 18 job candidates at MIT, and 5 out of 15 at Yale majored in development economics.

  2. 2.

    Glewwe et al. (2004) compared the impact of using “flip charts” in Kenyan schools, finding that the estimated impact was significantly positive for non-RCT data, whereas the impact for RCT data was insignificant, implying that the selection bias is very serious.

  3. 3.

    This type of experiment also includes lab-in-the-field experiment (Gneezy and Imas 2017).

  4. 4.

    Chetty (2013) stated that economics became a science: These examples are not anomalous. And as the availability of data increases, economics will continue to become a more empirical, scientific field. In the meantime, it is simplistic and irresponsible to use disagreements among economists on a handful of difficult questions as an excuse to ignore the field’s many topics of consensus and its ability to inform policy decisions on the basis of evidence instead of ideology.

  5. 5.

    BRAC is the largest NGO in the world in terms of the number of employees. Its activity covers wide range of issues such as microfinance, education, public health, and disaster relief.

  6. 6.

    This is often labeled as the conflict of “Econ’s versus Human’s,” where Econ means a rational agent assumed in the neoclassical economics and Human means nonrational agent modeled in behavioral economics (Thaler 2016).

  7. 7.

    Mullainathan and Shafir (2013) also discuss that the mind is occupied with forefront issues when the resources (e.g., time or money) are scarce, crowding out other important issues. This “tunneling” effect can prevent the poor from moving out of poverty.

  8. 8.

    Although the historical origins of this joke are subject to debate, this citation is based on the comic strip Mutt & Jeff (Fisher 1942).

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Authors and Affiliations

  1. Asian Development Bank and Faculty of Economics, University of Tokyo, Tokyo, Japan

    Yasuyuki Sawada

  2. Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO), Chiba, Japan

    Takeshi Aida

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  1. Yasuyuki Sawada
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Correspondence to Yasuyuki Sawada .

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  1. Future University Hakodate, Hokkaido, Japan

    Toshiji Kawagoe

  2. Chuo University, Hachioji, Tokyo, Japan

    Hirokazu Takizawa

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Sawada, Y., Aida, T. (2019). The Field Experiment Revolution in Development Economics. In: Kawagoe, T., Takizawa, H. (eds) Diversity of Experimental Methods in Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-6065-7_3

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