Is economics leaving Wonderland?

Bill Easterly’s The Tyranny of Experts and The Idealist, Nina Munk’s book about Jeff Sachs’s Millennium Villages project in Africa, The Idealist, were reviewed in an interesting article by Andrew Jack in the Financial Times yesterday. The books – neither of which I’ve yet read – seem to be part of the big shift that has occurred in development economics in recent years. That shift reflects a welcome shedding of the belief, at least on the part of many economists, that a single conceptual approach will deliver a ‘silver bullet’ solution or method that can be applied everywhere.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor   The Idealist: Jeffrey Sachs and the Quest to End Poverty

This is obviously far from a universal view, or Easterly and Munk would not have written their books. However, a number of the OECD economists I was lunching with on Friday were discussing exactly this subject. One said that he thought the RCTs approached, as so brilliantly described in Duflo and Bannerjee’s Poor Economics, would turn out to have transformed the field when we look back in a few years’ time. He was keen to see the developed economies scrutinise their own policies as rigorously as some aid interventions are scrutinised now.

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

As well as the methodology question, though, there is the tendency so widespread among economists to assume away the importance of historical and geographic specificities. One of the reasons I so loved Jeremy Adelman’s biography of Albert Hirschman, Worldly Philosopher, was its emphasis on this aspect of Hirschman’s development work, the crucial importance of the specific context.

The reductive turn in economics that dominated our subject from the 1970s to the 2000s is tenacious, but it seems to be on the retreat. Development economics is one of the straws in the wind. Perhaps I’m overoptimistic, but I do think economics is returning to the real world from its surreal Wonderland.

Alice in Wonderland (Wordsworth Classics)

Economists out to lunch?

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