Economy

The curious case of randomness

Cheer for the Nobel, but randomised controlled trials can't be the quick-fix for all problems

 
By Swasti Pachauri
Last Updated: Friday 18 October 2019

The Nobel prize in Economics 2019 has been awarded to Abhijit Banerjee, Esther Duflo, and Michael Kremer for experimental approaches to alleviating global poverty, which is a reason to cheer. Since the publication of their book Poor Economics (2011), a discussion around randomised controlled trials (RCTs) has gained currency in development economics.

RCTs are tools used in conducting randomised impact evaluations where one group is subjected to a ‘treatment’ or a policy intervention benchmarked against a control group, where there is no introduction of this intervention. The results may provide answers for topical policy problems corroborating to what is known as ‘evidence-based policy’.  

RCTs may work and provide evidence-based solutions to micro-problems. For instance, one such programme is the experiment conducted in rural Udaipur which aimed at improving immunisation by providing parents with incentives like 1 kilogramme lentils and a set of thalis (metal meal plates) upon completion of a child's full immunisation course.

More recently, the Chunauti scheme introduced by the Delhi government to assess which set of students needed special classes in English, Hindi, and Mathematics is another example, as suggested by recent reports. The fact that Delhi government schools today are heralded as global examples of focused policy in improving educational quality and inclusive education - is no secret. 

Such successful experiments may provide relevant solutions to a particular region, or a community, and may prove beneficial in improving certain outcomes and indicators of that particular eco-system.

However, it is important to acknowledge that experimentalist approaches to a policy may not produce ubiquitous elixirs to developmental problems. Developmental research as a tool for framing public policy is nuanced and multi-layered. For instance, in the context of policy, any given determinant of poverty doesn’t exist in isolation and thus it becomes essential to consider certain points to strengthen the process of compassionate and empathetic policymaking. This is not a critique of RCTs per se but raises a few points relevant to the subjectivities of research needed for long-term holistic policies. 

Communities are not laboratories

For one, randomised experiments transform the said eco-system to a testing laboratory, accentuating the purported inter and intra-schisms between communities – the control versus the treated groups and different sub-groups, and their interactions within. People’s consent, understanding, and participation are imperative for inclusive policies, and concerns related to the ethical considerations of RCTs have sometimes been raised (such as informed consent). Moreover, what happens to the communities once the researchers leave, or the experiment is over? How do they cope with the qualitative aspects of the implemented intervention? And why should evidence always be needed to design policy facilitated by external actors?

In order to decolonise research, therefore, people and communities need to be considered more than mere samples and statistical numbers. An individual is a subjective story, and one must de-imperialise and de-digitise her, for her to factor in her organic realities than, parachuting a top-down research methodology abruptly into her life.

In this context, select quick-fixes based on short-term problems may become antithetical to the egalitarian, universal objectives of public policy; as they may not provide sustainable solutions relevant to diverse geographies - factoring in micro-concerns. For instance, one argument cited against the all-encompassing idea of the Universal Basic Income (UBI) was to provide ‘universal basic services’ than a standardised UBI, which may have entailed cutting expenses on other social schemes causing disruptions.

Infantilising communities and nudging

Second, poverty reduction methods shouldn’t be infantilised and reduced to mere 'palliatives', or the economy of ‘doles’ furthering dependencies of a market agenda.

Communities shouldn’t be relegated to intermittent objects of testing in public policy framing. Reducing them to guinea pigs, objectifying their situations; subjecting them to experimentation at a researcher’s will and assumptions - only aggravates the developmental divide, resulting in ‘corporatisation of poverty’; while increasingly dehumanising their agency.

For instance, the oft-cited speculation of proposed provisioning of packaged foods marketed by FMCGs within the mid-day meals, is an experimental premise to translate marginalised communities into eventual consumers, nonetheless on the pretext of introducing aspirational foods with different tastes.

Moreover, the rationale of the experimentalist approach to poverty alleviation takes the cue from the nudge theory (and behavioural economics). That itself rests on a highly didactic and arrogant premise of libertarian paternalism boosted by vested interests, no matter how limitedly successful.

To assume that people behave irrationally, and may not make rational judgments — is to perpetuate the power equation and the tyranny of distance, deepening the cleavages between policymakers and beneficiaries. 

Such a doctrine rests on an elitist hubris, the foundations of which are grounded in apathy, conceit, and the centralised ‘one size fits all’ methodology. 

One of the criticisms of Nyuntam Aay Yojana (Nyay) announced at the eleventh hour by the Congress party this year, related to why dole-outs didn’t work; while long term enablers like skilling and capacity development very often did. The NYAY proposition flopped and didn’t resonate with the voters, as was seen in Verdict 2019.

Subjective Realities

Third, a standardised, generic policy pill based on experiments in a particular setting may ignore the regional variations including the subjective socio-economic, cultural, and political factors which are unique to each individual, and thus this may not hold valid in another eco-system.

Policymakers are no moral messiahs to the lesser fortunate — rather mere facilitators. To assume that the communities don’t have the intelligence to decide for themselves is to deny them basic dignity, self-esteem, and human agency. Policy needs are subjective and require collective solutions. For instance, Amartya Sen’s capabilities approach and its eventual application to human capital models; the introduction of the Human Development Index (HDI), which incorporated indices related to health and education, moving away just from 'income'.

Similarly, works of Jean Dreze assimilated in Sense and Solidarity: Jhola Waala Economics for everyone (2017) argue in favor of amalgamating economics and the subjectivity of individual experiences.

The premise of valuing subjective experiences is thus a humane idea of socio-economic empowerment than a preachy, pedantic solution to poverty, and a top-down agenda isolationist, neoclassical, and neo-liberal market economics, seen for instance, in contract farming. Such an idea of ‘welfare colonialism’ via short term 'palliative economics' (Reinert, Erik S., 2006) needs to be decoded well, before any band-aids are provided to people.

Way forward

In order to address policy needs holistically, therefore, structural and institutional reforms are needed in place of short term policies. Policies dependent on the dominating ‘zeitgeist’ and more ‘manageable’ issues - exclude larger subjective socio-economic, political and cultural concerns, delaying reforms in capacity building, institutional strengthening, improved transparency and accessibility.

People's participation and sustained capacity building initiatives to institutionalise reforms are essential for continuous change. A relevant example here is of the introduction of Integrated Participatory Planning Exercise in MGNREGA, which aimed at enabling households ensuring their participation in planning exercises. This was not set in the confines of trickle-down economics; rather facilitated a bottom-up, decentralised approach to community empowerment, no matter what its limitations.

Take the case of land rights as the long-term solution to addressing socio-economic inequality. Any attempt at addressing this should begin with institutional overhauling, combined with positive nudges, if at all.

For instance, the exclusion of women from property plaguing gender equality and women farmers — is at the intersection of politics, economics, sociology, and cultural factors.

One way to nudge could be for instance, the recent announcement by the Chief Minister of Madhya Pradesh of charging a meagre registration amount of Rs 1100 on the inclusion of women, daughters, daughters-in-law in property ownership. Other methods could be providing subsidies to increase women-led farming, with sustained efforts of educating women about their property rights.

The larger question for maximum welfare should thus focus on long-term reform that addresses inclusion, inequality; enhances individual freedoms, and indigenous wisdom — away from the short-term prescriptions based on consumerist-behaviour alone.

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