Causality, Impartiality and Evidence-Based Policy - Mechanism and Causality in Biology and Economics - page 199

1 Introduction

Randomisation, the assignment of experimental subjects to treatment groups by
means of a random number generator, was first systematically applied in psychic
research in the late nineteenth century and became popular in statistics after Ronald
Fisher advocated its use in 1926 (Hacking 1988 ). In medicine and development
economics, the two sciences we will focus on in this chapter, randomised trials are
now widely regarded as the 'gold standard' of evidence. The overall aims of this
chapter are to compare the use of randomised evaluations in these two sciences and
to assess their ability to provide impartial evidence about causal claims. In short, we
will argue that there are no good reasons to regard randomisation as a sine qua non
for good evidential practice in either science. However, in medicine, but not in
development economics, randomisation can provide impartiality from the point of
view of regulatory agencies. The intuition is that if the available evidence leaves
room for uncertainty about the effects of an intervention (such as a new drug), a
regulator should make sure that such uncertainty cannot be exploited by some
party's private interest. We will argue that randomisation plays an important role
in this context. By contrast, in the field evaluations that have recently become
popular in development economics, subjects have incentives to act strategically
against the research protocol which undermines their use as neutral arbiter between
conflicting parties.

2 Background: Randomised Clinical Trials
as a Public Policy Tool

Randomised clinical trials (RCTs) are medical experiments in which alternative
treatments for a condition are administered to at least two groups of patients in
order to see which one is the safest and most effective for future cases. Unlike other
experimental designs in medicine and elsewhere, RCTs have achieved some public
notoriety throughout the last five decades thanks to the role they play in pharma-
ceutical regulation. The commercial distribution of novel drugs will only be
authorised by regulatory agencies such as the American Food and Drug Adminis-
tration (FDA) if their safety and efficacy is proved in two RCTs.
RCTs come to solve a problem in public policy: by their own means, consumers
cannot ascertain the quality of a drug, either by simple inspection of their appear-
ance (shape, size, smell, etc.) or by their price. Depending on the circumstances of
the patient, the natural rate of variability of their effects (positive or negative)
prevents a reliable assessment on the basis of individual experience alone. When
buyers or sellers cannot directly determine the quality of a good or service,
economic adverse selection can lead to the elimination of all trade in a market