"Randomised trials could help show whether aid works"

IPA Research Affiliate David McKenzie is mentioned in this Economist news story on the effectiveness of randomized trials, calling back to the Millennium Villages Project that has stirred up some controversy in the development impact sphere this year. Relevant Excerpt:

Michael Clemens of the Centre for Global Development, a think-tank, and Gabriel Demombynes of the World Bank says that a randomised trial is needed to disentangle what the millennium programme is doing from what is happening anyway. In such a trial, each village would be paired with a similar one not getting the same help—and the results compared.

This stirred up a hornets' nest. In a vitriolic letter to another critic, Mr Sachs calls the idea “that one can randomise villages like one randomises individuals…extraordinarily misguided”. Randomised trials cannot work in villages, he insists, because they are too complex and dynamic. Comparing a millennium village with a randomly chosen one “will add surprisingly little”; the proper comparison is with a region or a country as a whole.

David McKenzie of the World Bank then took up the cudgels. He pointed out that if the impact of the project were as great as its backers claim, it should be discernible even against a shifting background; that, in practice, randomised trials can be used to evaluate complex, dynamic processes, not just simple, static ones (though they have to be designed properly); and that comparing a favoured village against another after the intervention has started—which is being done—isn't a randomised trial in the proper sense (properly, one should select pairs of villages, then choose one of the pair randomly as the subject of the programme).

Full article here.