Rethinking evidence & focusing on growth in economics

What is the problem with relying exclusively on rigorous evidence? Is economic growth essential for human well-being?

Is 'rigorous' evidence overrated? In this episode of VoxDevTalks, Lant Pritchett discusses the overreliance on rigorous evidence in development economics. Pritchett critiques the dominance of Randomised Control Trials (RCTs) and systematic reviews, questioning whether this approach delivers actionable insights for diverse country contexts.

The problem with relying exclusively on rigorous evidence

Pritchett acknowledges that rigorous evidence, such as that produced by RCTs, has a place in policymaking. However, he strongly cautions against relying exclusively or excessively on it.

“The claims being made that this rigorous evidence should be given some super special priority in policy formulation and project design is just completely empirically untenable”

He highlights the pitfalls of systematic reviews, which aggregate experimental findings across countries. While these reviews aim to provide generalised insights, they often fail to account for the significant variation in outcomes across different contexts, leading to misguided policies.

Why context matters more than averages

Pritchett uses a vivid analogy to explain the limitations of systematic reviews: tailoring trousers for men based on average height. While averages may correct for biases, they ignore significant individual variation, leading to errors. Similarly, he contends that policymakers relying on global averages of rigorous evidence are likely to overlook local nuances.

For instance, in the case of private versus public school performance, Pritchett’s research found that using country-specific observational data (such as OLS estimates) often outperformed relying on global averages of rigorous studies. So homegrown OLS estimates, for all their flaws, are often a better predictor of outcomes in specific contexts than the average of rigorous evidence from elsewhere.

The tension between national development and poverty mitigation

Pritchett critiques the shift in development economics from focusing on national development to prioritising programmatic poverty alleviation. Historically, development efforts aimed to build productive economies, accountable governments, and capable institutions—goals Fukuyama describes as “getting to Denmark”. Yet modern approaches have set lower, narrower targets, such as reducing extreme poverty or increasing school attendance.

“We slid away from national development towards programmatic approaches to mitigating the consequences of underdevelopment on the worst off”

While such programmes address immediate needs, Pritchett warns they risk neglecting the broader goal of sustainable, inclusive growth. Furthermore, that development institutions and academic development economics have lost focus on growth is at odds with national governments and researchers, for whom economic growth is still a central goal.

Why growth remains essential for human well-being

Contrary to the narrative that economic growth is no longer critical, Pritchett argues that growth remains a fundamental driver of human well-being, especially in low- and middle-income countries.

“Is most of the world at a state where growth has ceased to be important for achieving human well-being? The answer is no, nowhere near”

He emphasises that even upper-middle-income countries continue to experience significant improvements in material well-being from growth, particularly when it benefits disadvantaged groups. Without national development, Pritchett warns, efforts to improve human welfare will remain fragmented and limited in scope.

The neglected challenge of state capability

Another major issue Pritchett identifies is the weakness of public sector institutions in many developing countries. Effective implementation of policies and programs depends on capable state organisations, yet this area receives insufficient attention in development research.

He shares an anecdote from India, where the same public sector doctors provided drastically different levels of care in their public and private practices. This disparity underscores the importance of improving state capability to ensure programme effectiveness.

A call to rebalance development economics

Pritchett believes development economics has taken a wrong turn by focusing too narrowly on rigorous evidence and poverty alleviation programmes. He calls for a reorientation towards national development, inclusive growth, and building state capacity, which means making development economics a bigger tent that provides space for researchers working on these topics.

Pritchett argues that currently, the field has sidelined researchers working on broader, systemic issues. He advocates for a more balanced approach that combines programmatic interventions with efforts to address structural challenges in developing countries.

The role of geopolitics and climate in shaping development discourse

Looking ahead, Pritchett sees geopolitics and climate change as key forces reshaping global development priorities. He notes that emerging powers like India and China are rejecting low-bar development goals in favour of more ambitious visions of national progress. However, he cautions that Western concerns about climate change may conflict with the growth aspirations of developing countries, and warns against narratives that downplay the importance of growth for the Global South.

Advice for aspiring development economists

When asked what young economists should focus on, Pritchett highlights two pressing challenges: achieving sustained, inclusive growth and improving state capability. He stresses the need for research that goes beyond generating growth to ensuring it is politically inclusive, consistent with the rule of law, and sustainable.

“Lots of rapid growth experiences didn’t lead to broader development”

Pritchett cites Bangladesh as an example where economic gains have not been accompanied by institutional improvements.

Conclusion: Rethinking development research priorities

This episode of VoxDevTalks offers a powerful critique of the current trajectory of development economics. Pritchett’s call to prioritise national development, inclusive growth, and state capability is a reminder that achieving long-term progress requires moving beyond short-term programmatic fixes.

As global challenges evolve, so too must the field of development economics, balancing rigorous evidence with a deeper understanding of local contexts and systemic change.