Explained: What We Know About The Nobel-Winning Randomised Controlled Trial

By Kaustav K. Sarkar and Rukmini Thapa

Esther Duflo, Michael Kremer and Abhijit Banerjee received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (or the Economic Nobel Prize) in 2019. The mainstream print, broadcast and social media in India (and across the globe) have been full of praise for the Nobel laureates.

As Indians, it is indeed a moment of pride that has been written in the glorious pages of our history. Esther Duflo needs special mention for being the second woman to win a Nobel Prize in Economics. It is also good news that after a long time the Nobel committee has decided to confer the award to economists who have been working very closely to poverty and development issues.

However, a section of development economics, especially experts from the heterodox school of thought (like Naila Kabeer, Ingrid H. Kvangraven, Sanjay Reddy, Jean Dreze, Angus Deaton, to name a few) have been expressing their concerns and reservations about Randomised Controlled Trial (RCT). The jubilation and hullabaloo over the award seem to be overlooking key issues in RCT that must be flagged at this opportune moment. This piece is an effort to highlight some key aspects by drawing from the writings and arguments from the Heterodox School of economics.

RCT borrows the concept from the field of medicine where the effect of a drug needs to be evaluated before it is to be released for the masses. Therefore, in medical research, two identical groups are identified among which only the ‘treatment group’ is given the medicine while the ‘control group’ is not.

Later, researchers find out the impact of the medicine by comparing the treatment and control groups. Esther Duflo and her team implemented this concept in the field of economics, to be very specific in development economics. They have widely used RCTs to measure the impact of various policies in the fields of micro-credit, health, education, nutrition, poverty etc.

Since the announcement of the award, a lot has already been written on RCTs, its methodology and the implications over the past few days. So, to spare the readers from the boredom of repetition, we will skip the theory and only discuss some concerns that make RCTs less appealing to a certain section of academia.

  • First and foremost, there are serious ethical issues related to RCTs. In the case of medicine, there is much written on the harmful impacts of clinical trials. In comparison to that, the ethical impacts of RCTs are rarely discussed in the field of economics. When a society and its members face an intervention introduced by researchers (as is particularly the case in RCTs), it leaves behind an impact that cannot be erased from the memory and experience of the subject. Such interventions transfer subjects temporarily to a situation that is far from their lived reality.Even though the intervention is temporary in nature (only during the study period), the impact may leave a permanent imprint on the society and the people intervened (treatment group), even beyond a point of no return. The subject is given a taste of something that they may later never be able to afford by their own means but also not forget it. This is completely different from other non-intervention type survey-based research which doesn’t intervene or artificially alter the existing context through their surveys but collects information to understand the problem.
  • RCT originates from neoclassical microeconomics and individual maximisation. The idea behind RCTs are not ‘guided by theory or values’ to understand over-lapping factors behind chronic crises and systemic problems but aim to provide a quick fix using a purely technical approach to larger issues like poverty, low income, illiteracy, poor health, women empowerment, unemployment, etc. through a dose of measures that do not emerge out of sustained and relentless socio-economic progress. It is externally administered and is thus neither sustainable nor relatable to the lived reality of those from low-income groups.Drawing heavily from the behavioural branch of economics, RCTs believe that the individual behaviour, biases, and judgements are to be fixed to solve socio-economic, development-related problems of the ‘Global South’. This essentially reduces the larger problems of development economics, like poverty, to individualistic nudge and technical fixes. This method undermines the merits of survey methods by limiting its use to focus narrowly on what can be ‘fixed’ sans a holistic assessment of deep-seated systemic issues that need to be corrected through a bottom-up process of change.The focus of RCTs remains on the effects rather than the process and the agencies behind the processes. Its prescriptions derived through lab-replicated experimentation cannot be considered superior to and/or suitable in comparison to policies that are the result of demands driven by political and social mobilisation at the grass-root level.
  • As a result of keeping an individualistic focus, RCTs have little acknowledgement of the larger socio-economic context that individuals and households are part of. Thus, studies other than RCTs, which can and do come out with different results and policy prescriptions, are rarely acknowledged by the RCTs. ‘There is always one truth’ may not be a realistic approach in understanding larger socio-economic problems of human societies. Because society and human behaviours are inter-weaved in a very complicated manner, straightforward external interventions are not really in a position to bring out the diverse social, economic, cultural factors in a society.
  • Lastly, the validation of RCTs by the Nobel Committee has over-rated its methodological superiority which may confine the field of development research to one single approach. Does this not ring a bell? We have witnessed how micro-credit, has been termed as the “silver bullet” in removing poverty, soon after Muhammad Yunus of ‘Grameen Bank’ (the poster boy of micro-credit) in Bangladesh was conferred the Nobel Peace Prize in 2007.The mushrooming of predatory micro-credit institutions world-wide was more conspicuous than its success. Yunus, who still has high hopes in abolishing world poverty through the expansion of micro-credit and visualisedsending poverty in a museum”, is actually fighting an almost lost battle. Latest research has raised serious doubts about whether micro-credit has any positive and sustainable impact on the lives of people from low-income groups. The contentious idea of micro-credit, as an instrument of poverty-eradication, deserves a separate write-up.

Scholars like Naila Kabeer (who have engaged in field-based research on development economics for quite a long time) expressed that the moment experiments like the RCTs move from a laboratory into a real-world, things perhaps turn upside down. The diverse behaviour of humans, their continuously changing interactions and the evolving culture and society make RCT-like experiments really difficult to carry out in the real world and even replicate it.

To conclude, we hope that the field of development economics welcomes a heterodox academy and remains generously open to a plurality of viewpoints where scholars are encouraged to engage in constructive disagreement. While experiments like RCTs may bring issues like poverty and survey-based research into discourse and limelight again, it also might polarise views and debates. The quest, finally, should be to aim for a sustainable pathway driven by masses themselves as the agents of change.

Note: The authors are a PhD student at the Tata Institute of Social Sciences (Mumbai), and an independent researcher.

Featured Image Credit: Eric Fougere/VIP Images/Corbis/Getty, Jon Chase/Harvard University, Saumya Khandelwal/Hindustan Times/Getty
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