The Disruptive Power of RCTs

Jonathan Morduch
Oxford University Press , Chapter 3 in Florent Bédécarrats, Isabelle Guerin, and François Roubaud, eds., Randomized Control Trials in the Field of Development A Critical Perspective. Oxford University Press, 2020: 108-125.

Two very different kinds of RCTs are used by economists, although they often get lumped together. The first kind is evaluative, used to assess whether a policy or intervention worked or not. Critics worry that privileging these RCTs over other evaluation methods can narrow knowledge. The second kind of RCT is exploratory, asking how behavior, institutions, and markets react to changing prices, contracts, and other economic features. By disrupting status quo economic conditions through experimental design, these exploratory RCTs open new questions for empirical micro-economics in ways that other methods cannot. One can be ambivalent about putting evaluative RCTs on a pedestal while also encouraging exploratory RCTs. Examples from RCTs of insurance, microcredit and digital money illustrate the arguments.

Wagner Faculty