Relevant Development

Esther Duflo and Abhijit Banerjee (coolest names ever?) are challenging the conventions of development economics by experimenting with randomized testing. This micro-approach to what are often macro- problems are giving us clues as to what works, what doesn’t work, and why? What are some of the findings?

Mr. Kremer and two other economists, in fact, did the textbook experiment — and found that textbooks didn’t improve test scores or graduation rates in rural western Kenya. (The students were probably too diverse, in terms of preparation and even language, to be helped by a single curriculum.) On the other hand, another randomized trial in the same part of Kenya found that treating children for intestinal worms did lift school performance. That study has led to an expansion of deworming programs and, as Alan Krueger of Princeton says, is “probably improving millions of lives.”

A few things about this new approach: I find it refreshing that the trials take into account context, a feature often absent in most development prescriptions. This is the wake-up call to development economics that it needs to snap it out of its “more aid will solve all world poverty” dream. As some of these tests are proving, pouring money into inefficient or ineffectual programs, no matter how much money it is, will contribute little to development. Though it may be disheartening to know that all those textbooks didn’t have the intended effects of raising graduation rates, this provides a lesson that sometimes seemingly unrelated improvements (such as treating intestinal worms) may provide the desired effect.

Here is another interesting article by about the recent beef recall and the economics of factory farms. The author quite pessimistically attributes the scandal as a natural development of the efficiency fanaticism that plagues modern production methods. The constant pressure to produce more in less time at lower costs has lead to unattainable quotas, inducing producers to bend the law in order to meet demand.