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06.11.2019 - Nobel Prize in economics for experimental approach to alleviating global poverty

On 14 October 2019 Abhijit Banerjee, Esther Duflo and Michael Kremer were awarded the Nobel Prize in Economics for their "experimental approach to alleviating global poverty". Their research has gained recognition primarily for the experiment-based methods

In their research, Banerjee, Duflo and Kremer break down the big and complex questions, why people are poor and how poverty can be reduced, into smaller, more precise sub-questions. They examine the impact of certain specific measures to alleviate poverty and test the impact of these measures in specially designed experiments – an approach familiar from clinical trials in Medicine.

Field trials show impact of measures (or lack thereof)

Due to their practical relevance, this approach and related quasi-experimental procedures have become increasingly important for international development cooperation in the last two decades. For example, by conducting interventions in India and Kenya the award winners were able to ascertain that distribution of textbooks has no direct impact on a child's performance at school. In contrast, they found that individual remedial tutoring where a pupil's particular needs can be addressed had a big impact. In many other areas, such as combating malnutrition, political participation or the provision of microcredits, the experiments have revealed partly surprising impacts of interventions but also demonstrated the missing impact of certain measures.

Relevance for the improvement of policies, programmes and projects

The experimental approach of impact evaluation has resulted in far-reaching changes in social science development research, albeit not exempt from criticism and limitations. DEval Director Prof. Dr. Jörg Faust: "Certainly not all questions relevant to development cooperation can be answered by using experimental or quasi-experimental methods. That being said, the practical relevance and rigour of experimentally oriented field research and impact evaluation, especially at the international level, have undoubtedly become pertinent to the improvement of policies, programmes and projects relevant to poverty reduction."

Experimental approaches in German development cooperation

To date, experimental and quasi-experimental evaluation procedures within German development cooperation have been tested sporadically and unsystematically. As part of a BMZ-funded research project, DEval is exploring potentials and challenges of rigorous impact evaluations for German development cooperation, aiming to increase their implementation and systematic use.

Further information on the project: Rigorose Wirkungsevaluierung/Rigorous Impact Evaluation (RIE)

What is rigorous impact evaluation?

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