‘Nobel prize’ winning plumbers

17 Nov, 2019 at 19:01 | Posted in Economics | 1 Comment

baThere is no reason to believe, as the political economy view would have it, that politics always trumps policies. We can now go one step further and invert the hierarchy between policies and politics … The focus on the broad INSTITUTIONS as a necessary and sufficient condition for anything good to happen is somewhat misplaced … There is considerable slack to improve institutions and policy at the margin … These changes will be be incremental, but they will sustain and build on themselves. That can be the start of a quiet revolution.

Duflo and Banerjee think — like most other ‘randomistas’ — that economics should be based on evidence from randomised experiments and field studies. Duflo et consortes want to give up on ‘big ideas’ like political economy and institutional reform and instead go for solving more manageable problems the way plumbers do. imagesBut that modern time ‘marginalist’ approach sure can’t be the right way to move economics forward and make it a relevant and realist science. A plumber can fix minor leaks in your system, but if the whole system is rotten, something more than good old fashion plumbing is needed. The big social and economic problems we face today is not going to be solved by plumbers performing RCTs.

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  1. Yes Lars,indeed it seem they given the “Nobel Prize” to purely “Abstracted Empiricist Plumbers” ,this year! RCT is the “new” fad among economists and other social scientist,but still without any theoretical depht,or oversight of the institutional framework. Nothing new,just availability to better computers! Sad!


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