Randomisation, Causality and the Role of Reasoned Intuition

Abstract

The method of randomisation has been a major driver in the recent rise to prominence of empirical development economics. It has helped uncover patterns and facts that had earlier escaped attention. But it has also given rise to debate and controversy. This paper evaluates the method of randomisation and concludes that while the method of randomisation is the gold standard for description, and does uncover what is here called “circumstantial causality”, it is not able to demonstrate generalised causality. Nor does it, in itself, lead to policy conclusions, as is often claimed by its advocates. To get to policy conclusions requires combining the findings of randomised experiments with human intuition, which, being founded in evolution, has innate strengths. Moreover, even non-randomised empirical methods combined with reasoned intuition can help in crafting a development policy.