Controlled experiments in development economics:
Answer
a. are a faulty concept and never make sense
b. are routinely used
c. are sometimes possible but usually substituted by natural experiments
d. are never possible
e. are unnecessary because causal effects can be established by econometric methods
The correct answer and explanation is:
The correct answer is c. are sometimes possible but usually substituted by natural experiments.
Controlled experiments in development economics, as in other fields of economics, are often difficult to conduct because of ethical, practical, and logistical constraints. In a controlled experiment, researchers would manipulate variables to observe the effects on a specific outcome, ideally isolating cause and effect. However, in development economics, manipulating factors such as income, education, health care, or other social conditions in a controlled environment is often not feasible due to ethical concerns or the complexity of the systems involved.
Instead, natural experiments are typically used. These occur when external factors or events create conditions that resemble a controlled experiment but without the intervention of the researcher. For example, the introduction of a new policy or a natural disaster might create conditions where some groups are exposed to a certain change while others are not. This allows researchers to observe the impacts of these changes without directly controlling them. These types of experiments are often easier to conduct and can still provide valuable insights into causal relationships.
Although randomized controlled trials (RCTs) have gained popularity as a method in development economics, they are often expensive, time-consuming, and sometimes impossible to carry out in certain contexts. For this reason, natural experiments are commonly substituted for controlled experiments when it is impractical to conduct a fully controlled trial. These natural experiments allow economists to draw inferences about causal effects by comparing outcomes in situations where randomization has occurred naturally.
In summary, controlled experiments are not always possible in development economics, but natural experiments offer a viable alternative to study causal effects.