And so on, ad infinitum, for every variable that can be thought
of—and many that can’t. Anyone attempting to answer a question as
simple as “does the name Fast- Mart increase sales” faces such an
overwhelming density of possible causal factors that it is
impossible for him to structure the study without making
assumptions about which variables to include and which to
exclude.
In other words, there is simply no way to answer the question
without the risk of leaving out an important variable. He could
present a plausible answer to the question of whether the
name “Fast- Mart” increases sales, but that answer would inevitably
reflect his own presuppositions.
Manzi concludes that RFTs present a possible resolution to some
of our endless public debates, like the one over the stimulus. In
part, he believes this because they have already made an impact in
business. In particular, Manzi points to the success of Capital
One, a credit card company that grew rapidly throughout the ’90s
using RFTs to establish marketing strategies. The company would
test new advertisements by randomly selecting treatment and control
households, and then use the results to establish larger campaigns.
Capital One ran about 60,000 such tests in 2000, according to
Manzi, and has quickly grown into the Fortune 500 company it is
today. Google, notably, also has incorporated RFTs into its
business strategy, running 12,000 in 2009.
There are a few examples of RFTs being done for governments. The
1996 welfare reform, for one example, was partly motivated by a
series of statelevel experiments. Manzi believes that far more
could be done, in health care, crime prevention, education, and a
host of other areas. The federal government, in particular, should
be performing thousands of experiments a year.
A NUMBER of social scientists have begun to bring RFTs to the
forefront of their specializations. The MIT economists Abhijit
Banerjee and Esther Duflo use field experiments to study global
poverty, by testing small-scale interventions such as distributing
mosquito nets. Duflo won the John Bates Clark Medal, given to the
best economist under age 40, in 2010. Manzi also cites the
education economist Roland Fryer and the Chicago economist John
List as RFT pioneers. If RFTs gain prominence in academia, they can
also enter use in policymaking.
Of course, RFTs suffer from their own shortcomings. Mosquito
nets that save lives in Africa may be useless in India, and school
vouchers that increase test scores in Milwaukee could easily flop
in Baltimore. Furthermore, RFTs are more likely to yield modest,
specific answers to narrowly defined questions, rather than point
to sweeping conclusions.
Manzi proposes that, ideally, many different functions of the
federal government should be spun off to the states and then tested
rigorously using RFTs as the states experiment with different
approaches. In essence, he suggests that the government engage in
the same sort of trial-and-error process that defines the private
sector.
One obvious objection to Manzi’s enthusiasm for RFTs is that his
technocratic view of their possibilities for government is divorced
from reality. Democratic politics, after all, is about competing
interests and coalitions, not best practices. Furthermore, it’s
unlikely that governors or mayors, let alone legislators, are
interested in running experiments that could prove to be
failures.
Nevertheless, even if their use in government is generations
away, RFTs could, in the meantime, dispel many myths that have
entered the mainstream through suspect research.
Uncontrolled is worthwhile for its reminder that most
studies that shape public debates report little more than the
authors’ biases, and have no predictive power whatsoever. In other
words, Uncontrolled is a call for humility about what we
know—and a little of that goes a long way.
C. Vernon Crisler | 10.4.12 @ 9:23PM
Don't know what to make of all this. Should government use statistics? Well, government already does? Should goverment try things out on a small scale before trying larger things? It already does.
However, the idea of using a lot of experiments as some sort of magic solution to large scale social problems is just the old Progressive idea, the cult of the engineer.
A lot of things can be decided just by studying economic theory. You can know theoretically that government spending is not going to increase prosperity. At best, all it can do is rearrange it; at worst it will cause a sharp decline in productivity as well as hamper the most efficient use of resources. That can be known a priori, without any need for RFTs.
However, RFTs make for good windowdressing.