Consider a household in which the main breadwinner loses their job. The household *could* respond by reducing spending, but in most situations that doesn’t help much. You still have mouths to feed and an unemployed breadwinner. So maybe the breadwinner goes back to university to do a Master’s degree, or retrain, or whatever. Maybe the breadwinner takes out a loan to pay the tuition fees (analogous to borrowing and spending to get out the recession).

The frustrating thing about all this is that our economic problems are actually fairly tractable. We know the solutions but are rulers are too ignorant and selfish to implement them.

I’m always a bit wary of making such a big deal out of GDP, for all the well-worn reasons — because it’s aggregationist, it adds negative externalities, it ignores wellbeing, but it has the merit of at least allowing you to tackle its proponents on their own terms.

You’re right that philosophically there are problems with the notion of controlled experiments in social sciences. Economies or economic situations are open systems in which it is very difficult to achieve closure by holding one variable constant.

As the authors themselves are quick to point out, it’s doubtful whether the findings actually say much about development in general. For instance the last chapter is titled ‘In place of a sweeping conclusion’.

Even when you think that you’ve ‘discovered’ something, interpreting your ‘discovery’ always involves subjectivity, and there’s nothing wrong with that. It’s in the nature of social science. I never ceased to be amazed at the different ways in which people can interpret data. But the problem comes when you pretend that your research is grounded in irrefutable truth because of your own expert scientific techniques.

Funnily enough, and as William Easterly tweeted, few of the assertions in the Guardian interview are actually based on experiments. Just like most other celebrity economists, the authors are implicitly trying to legitimise their comments with an aura of scientism. It’s as if they’re saying “We’ve done hard science, so our ideas must be true”. Social science is definitely possible, but most findings are provisional, subject to time and place, and need to be accompanied by a healthy dose of humility.

- I find the very act of ‘controlled trials’ in the social field very problematic on a number of levels. Firstly it is very difficult to control anything in any society, unless one is Kim Jong(s) (even then?). Secondly, what is ‘controlled for’ might be all the interesting bits. And thirdly, a social science approach based one that goes around ‘controlling things’ is undesirable, particularly in terms of knowledge that is drawn from such exercises and policies designed thereafter. Here one is reminded of Hayek’s ‘Road to Serfdom’.

- On the specifics such as ‘micro-finance’ (MFs) , the limitations of which Poor Economics has presented, maybe all too apparent if one were to spend time in the communities with such schemes and critically observe. My own observation has been:
(1) MFs (many which are based on the principle of reaching financial sustainability) merely tap into existing skills (capabilities) rather than add/create new ones. Consequently, there exists a inverted U-shaped diminishing returns on MFs over time; i.e. high returns in the beginning but it diminishes as existing capabilities are exhausted and new ones are not added. The latter is constrained because Banks (which MFs principally are based on) are interested in lending and accruing interests, not building capacities.
(2) MFs merely allow households to move along existing production possibility frontiers, rather than shift it outwards. The latter has as much to do with individual/household capacities as it has with the (production) capacities of country itself. This is why despite of MFs, workers in my country (Nepal) choose to work in the Middle East and East Asia to take advantage of the production processes there (because there are few back home) and accrue higher returns on their labour.

I agree with you in that the issue of reflexivity is central to how we go about ‘researching’ as well as ‘theorising’ the problems and possibilities of development.

Just one thing Phil P is an Irish Journo hes not British I think (or at least certainly lives and works in Dublin)