Thursday, September 06, 2007

Abhijit Banerjee on how well we understand the Economic Machine

The problem, in the end, is that we economists and development experts are still thinking in machine mode—we are looking for the right button to push. Education is one such button. Within education, there are more buttons: Economists talk of decentralization, incentives, vouchers, competition. Education experts talk about pedagogy. Government officials seem to swear by teacher training. If only we could do it right, whatever the favored “it” might be, we would be home free.

The reason we like these buttons so much, it seems to me, is that they save us the trouble of stepping into the machine. By assuming that the machine either runs on its own or does not run at all, we avoid having to go looking for where the wheels are getting caught and figuring out what small adjustments it would take to get the machine to run properly. To say that we need to move to a voucher system does not oblige us to figure out how to make it work—how to make sure that parents do not trade in the vouchers for cash (because they do not attach enough value to their children’s education) and that schools do not take parents for a ride (because parents may not know what a good education looks like). And how to get the private schools to be more effective—after all, at least in India, even children who go to private schools are nowhere near grade level. And many other messy details that every real program has to contend with.

This is from Abhijit Banerjee's article full of all kinds of interesting insights. Banerjee, an economist, is at MIT.