Still, the fundamental reason why randomistas make so little headway on “markets versus government” is that they quietly reject the question! Instead of weighing markets versus government, they almost invariably weigh government versus government. As a result, government can never really lose.
To see what I mean, suppose an RCT tests whether smaller class sizes increase adult earnings. If researchers discover a sizable positive effect, the heralded “policy implication” will be: Spend more taxpayer money to reduce class sizes. If researchers find a small or negative effect, however, the policy implication is never: Cut school budgets and refund the savings to taxpayers. Instead, the lesson the researchers will draw is: We desperately need experiments on other ways schools might increase adult earnings. Maybe we should do an experiment with more school lunches. Maybe we should randomly raise teachers’ pay. Or perhaps do an RCT on afterschool programs. No matter how many experiments fail, the Executive Summary will never read, “Let’s defund public education.”
Is it true that market solutions aren’t given enough consideration by randomistas?
I think Bryan Caplan is directionally correct, but his argumentation in this post is incredibly sloppy.
A marxist communist could make the exact same complaint as Bryan Caplan, but with the signs flipped. Why do all these economists focus on RCTs for educational interventions, and never once consider the best educational intervention is to rise up in violent revolution and overthrow our capitalist oppressors?
I don’t recall any of the RCT papers I’ve read being particularly heavy on normative claims. Usually they’ll just say:
“this intervention had a measurable effect on X, so policy makers interested in improving X should consider it part of the tool kit”
or
“this intervention didn’t have an effect on X, so policy makers interested in improving X should not do this”
Which seems completely reasonable to me. They aren’t quietly rejecting the question, they largely are just not engaging with normative questions of what policy makers ought to do. RCTs are a way of taking out ideology and focus on strictly empirical questions.
I think it’s much more true that non-market solutions—or indeed anything that doesn’t look like unequivocal advocacy for markets—aren’t given enough consideration by Bryan Caplan!
One of his own examples of RCTs is the most market-based hypothesis imaginable: testing why poor Kenyans won’t buy a commercial product that saves them money and concluding they’re much more likely to if they have access to credit! The implicit conclusion of an intervention failing a test of cost-effectiveness is in fact, for the government (or private funders) to spend less money on it. And many RCTs—particularly under the auspices of EA—are funded by private individuals looking to allocate their own market-generated money according to their own goals. Some of them, like GiveDirectly’s, are based on hypotheses that market participation absolutely does offer people in poverty more choice about how to escape than centrally planned interventions.
There are valid criticisms of RCTs as reductionist and missing bigger pictures, but the better ones don’t argue microeconomists do empirical microeconomics research out of hidden anticapitalist agendas!