What does
economics
have to do with
plumbing?
Macro
How can poor countries become rich countries?
Micro
How can poor people escape poverty and have prosperous lives?
What countries have achieved economic growth?
Does growth reduce poverty?
Source: https://ourworldindata.org/economic-growth
What can we learn from this graph about the relationship between economic growth and poverty?
What can we learn from this graph about the relationship between economic growth and poverty?
Economic growth tends to reduce extreme poverty
A lower share of the population of high-income countries live in extreme poverty
The best policy tools for reducing poverty are those that increase economic growth
Which of these explanations for the education-poverty relationship do you find the most plausible?
Investing in education helps the poorest climb out of poverty
Poverty prevents families from educating their children
In poor countries, the returns to education are low
As GDP increases, governments are both able to reduce poverty AND invest more in education
Before vs. after
Compare people / communities before and after a program
Participant vs. Non-participant
Compare people who received a program to those who did not
False counterfactuals
Before vs. after
Compare people / communities before and after a program
Participant vs. Non-participant
Compare people who received a program to those who did not
False counterfactuals
Does not control for time trends
Selection
Before vs. after
Compare people / communities before and after a program
Participant vs. Non-participant
Compare people who received a program to those who did not
Two wrongs make a right?
Does not control for time trends
Selection
(pre-post)
False counterfactuals
Cholera
Two wrongs make a right?
Cholera
Two wrongs make a right?
Cholera
Two wrongs make a right?
| "Treated" | "Comparison" | |
| Pre |
||
| Post |
Cholera
Two wrongs make a right?
| "Treated" Lambeth |
"Comparison" Southwark & Vauxhall |
|
| Pre |
0 | 0 |
| Post |
5 | 71 |
If you want to know more about John Snow and the cholera outbreak, this short video is great!
Macro
How can poor countries become rich countries?
Micro
How can poor people escape poverty and have prosperous lives?
What countries have achieved economic growth?
Does growth reduce poverty?
Macro
How can poor countries become rich countries?
Micro
How can poor people escape poverty and have prosperous lives?
What countries have achieved economic growth?
Does growth reduce poverty?
What makes countries grow?
Macro
How can poor countries become rich countries?
Micro
How can poor people escape poverty and have prosperous lives?
What countries have achieved economic growth?
Does growth reduce poverty?
What makes countries grow?
How do we implement good policies in the right way?
Plumbing means paying attention to what happens on the ground & tinkering to make policy work
Abhijit
Banerjee
Esther Duflo
Michael Kremer
The modern movement for RCTs in development economics… is about innovation, as well as evaluation.
It’s a dynamic process of learning about a context through painstaking on-the-ground work, trying out different approaches, collecting good data with good causal identification, finding out that results do not fit pre-conceived theoretical ideas, working on a better theoretical understanding that fits the facts on the ground, and developing new ideas and approaches based on theory and then testing the new approaches.