Brought to the fore by the new economics Nobel laureates testing out poverty alleviation policies, randomised controlled trials do have their limitations, one being leaving an outcome’s workings unexplained, said a discussion panellist recently.
Randomised controlled trials are studies aimed at testing the effectiveness of policy interventions. The trials are carried out by providing interventions to people at random to isolate a certain variable’s influence on the outcome.
Critics since 2010 have also been questioning whether the trial results always bear value and can be scaled up and if it was acceptable to experiment on people and leave out some in the process, said the panellist, Associate Professor Salma Begum.
More common in medical science, the trials were introduced in economics in the 1990s for the difficulty in isolating intervention from factors affecting social events and doubts over the efficacy of large scale government programmes, she said.
Begum was addressing a panel discussion on “2019 Nobel in Economics” organised by the Department of Economics and Social Sciences at Brac University (BracU) on Thursday, 7 November 2019.
Abhijit Banerjee was awarded the Nobel Prize in economics in 2019 along with his two co-researchers Esther Duflo and Michael Kremer “for their experimental approach to alleviating global poverty”.
The trio transformed research of development studies into the more reliable approach of field studies, found causes of poverty, causal effects of intervention policies in alleviating poverty and facilitated their cost effectiveness, said Lecturer Nazrina Haque.
Explaining different terminologies of research methodology, Senior Lecturer Tanvir Sobhan said the prize also recognises Banerjee founding “Abdul Latif Jameel Poverty Action Lab”.
Students gave presentations on studies carried out over the issues in Bangladesh.
One said Bannerjee found a 78-95 percent graduation rate among 1.6 million people alongside increased household consumption and savings carrying out the trials for seven years on an ultra-poor graduation model pioneered by BRAC in 2002.
The model first creates a wealth ranking to give the poorest a one-time grant of assets such as cattle or tradable goods, cash stipend to cover costs for two years and training and motivation to enable self-sufficiency.
There is also a four-year monitoring period to see if the households fall back to their previous state. The biggest challenge was pushing people up the economic ladder to realise their aspirations.
Another presentation highlighted microfinance, a small loan given to people with a higher chance of defaulting, informing that agriculture, animal rearing and service sectors in rural areas showed more prospects that urban ones.
There was also one on agriculture technology such as genetically modified organisms and specialised equipment, stating that one drawback was that though these increased crop production, it also increased inequality between users and non-users.
The final presentation was on a 2012 World Bank-aided “Shombhabona” programme of the government providing financial aid for counselling on children’s better health and monitoring at community clinics.
Though this reduced stunting and ensured better health, there were problems in identifying target groups and cash transfer delays.
In 2018, a $300,000 cash transfer modernisation plan for 6.5 million poor households was taken up which enabled household records to be digitalised for better identification and ensured efficiency and transparency.