This is the Cato Daily Podcast for Tuesday, November 5th, 2019.

I'm Caleb Brown.

The recipients of this year's Nobel Prize in economics earned that accolade for research that shows

some paths forward for alleviating poverty across the globe. Cato's Swami I.R. says that award was well-deserved,

but it should come with a caveat about how

poverty is best alleviated. Describe to us the folks who shared this

Nobel Prize in economics and what they are celebrated for having achieved.

Okay, these three people, Abigid Banerji, Esther, Do Flo, and Michael Kremmer.

They notice that if you want to have a new drug approved

by the Drug Authority, you have to undergo a randomized clinical trials to make quite sure that this thing works and various biases don't creep into that.

So they said why not extend the same approach to various economic programs to see whether they work or not.

So we will have randomized control trials.

We will have a control group where you don't follow a policy,

a treatment group, or you do follow that policy, and by comparing these

two we can say does that particular approach or that that particular technique work or not.

So this was their insight to have a rigorously controlled program free of biases.

They've carried out by now, I think about a thousand such experiments the world over and developing countries,

and you've got a various number of small valuable insights on what works or doesn't work in different programs.

And it is for this that they've been given the Nobel Prize,

for extending ideas that work in trying to test clinical drugs.

Let's extend this to government programs and test whether they work.

That's what the Nobel Prize is for. What's wrong with that? What makes you concerned

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