Jan 26, 2009

Are RCTs Reaching a Tipping Point?

by Tim Ogden

Measuring impact, much less proving causality, has long been the bane of efforts to alleviate poverty. Even when anti-poverty programs seem to be going well, there is often little evidence that the program itself—and not some other confounding factor—is the cause of the change.

A growing number of largely young economists have been working to change that, by applying techniques well-known from pharmaceutical testing—randomized controlled trials (RCTs). In an RCT, the study participants are randomly assigned to one or more treatment groups, and to a control group. By measuring the treatment and control groups before and after a program, researchers can isolate the effects of the program from other factors. This allows them not only to clearly see whether a program is effective, but it also provides insights into why.

RCTs in development and philanthropy are relatively new. Perhaps their best known advocate today is MIT economist Esther Duflo. Duflo co-founded the Abdul Latif Jameel Poverty Action Lab (JPAL) at MIT with fellow economist Abhijit Banerjee. JPAL and its affiliate, Innovations for Poverty Action (IPA)*, are the two premier research organizations applying RCTs to the aim of finding real-world solutions to poverty. Last summer Duflo was named one of the “Top 100 Public Intellectuals” by Foreign Policy. A few weeks ago, the Economist named her one of the top 8 “young” economists receiving more recommendations than anyone else, despite the fact that a number of those surveyed considered her too famous already to qualify. Two weeks ago, Duflo became the youngest woman to lecture at the College de France, what the Spectator calls “the Everest of French intellectual life.“

The accolades are merited, but they are more important for what they mean for RCTs than what they mean for Duflo. The attention ideally contributes to a broader recognition of the value of RCTs for identifying which interventions work and which don’t, so that money can be effectively allocated to make a positive difference in the lives of the poor.

*Editor’s Note: IPA is a client of Sona Partners, sponsor of Philanthropy Action