Finding our balance? Revisiting the randomization revolution in development economics ten years further on

Abstract

Ten years ago, we offered reflections on the power and pitfalls of randomized controlled trials in development economics, arguing that the research community had lost its balance between theory, observational data and randomized experiments. We remain convinced of both the importance and the limits of RCTs for development economics research. But with another decade of RCTs under our collective belts, three issues now strike us as having become increasingly important. First, ethical risks still loom large. Second, increasing evidence that many interventions have highly heterogeneous impacts, places a premium on reintegrating ex ante theorizing with RCT methods to understand the heterogeneity. In some cases, heterogeneity may imply RCTs are less desirable than other research methods. Third, the increasing use of RCTs to study informational, behavioral, and other perceptions-mediated interventions creates an opportunity for non-classical measurement error problems that undercut the statistical power of seemingly well-designed studies in ways that remain underappreciated.