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Microcredit RCTs in Development: Miracle or Mirage?

Author

Listed:
  • Florent Bédécarrats

    (AFD Paris, France)

  • Isabelle Guérin

    (IRD CESSMA)

  • François Roubaud

    (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université)

Abstract

Microcredit has long stood as a flagship topic for RCTs in development, starting with the publication of a special issue in a leading economics journal on six RCTs conducted in different world regions. This special issue was hailed as the first rigorous and conceivably definitive study on the impacts of microcredit. However, a detailed exploration of the implementation of these six RCTs reveals many limitations with respect to internal and external validity, ethics and interpretation. This paper uses analytical tools from statistics, political economy and development anthropology to discuss the extent to which the entire RCT chain strays from the ideal RCT principles (from sampling, data collection, data entry and recoding, estimates and interpretation to publication and dissemination of results). It also raises questions about the disparity between the academic and political success of this special issue and the many inconsistencies of method.

Suggested Citation

  • Florent Bédécarrats & Isabelle Guérin & François Roubaud, 2019. "Microcredit RCTs in Development: Miracle or Mirage?," Working Papers DT/2019/13, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201913
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    Keywords

    Randomized Control Trial (RCT); Microcredit; Developing countries; Internal validity; External validity; Statistics; Development anthropology; Political economy; Ethics.;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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