The Experimental Mindset within Development Economics: Proper Use and Handling Are Everything

Recent work with Randomized Controlled Trials (RCTs) in development economics has contributed to economists' use of the experimental mindset to inform policy choices. Development scholars, however, question the authority of RCT evidence, and worry that the RCT trend will turn their profession away from theory and econometrics. We examine this challenge, as well as RCTs' role within the broader experimental area, with a thorough review of relevant literature. We find that generic RCT fears are overstated. Experimental methods should be evaluated as a tool to test theory, search for patterns, and to pre-test new institutions. From this mindset, we see unexplored pathways that may benefit from the experimental mindset, further economic theory, and reduce poverty. Copyright 2010, Oxford University Press.