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Context Matters for Size: Why External Validity Claims and Development Practice Don't Mix-Working Paper 336

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  • Lant Pritchett, Justin Sandefur

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Abstract

In this paper we examine how policymakers and practitioners should interpret the impact evaluation literature when presented with conflicting experimental and non-experimental estimates of the same intervention across varying contexts. We show three things. First, as is well known, non-experimental estimates of a treatment effect comprise a causal treatment effect and a bias term due to endogenous selection into treatment. When non-experimental estimates vary across contexts any claim for external validity of an experimental result must make the assumption that (a) treatment effects are constant across contexts, while (b) selection processes vary across contexts. This assumption is rarely stated or defended in systematic reviews of evidence. Second, as an illustration of these issues, we examine two thoroughly researched literatures in the economics of education—class size effects and gains from private schooling—which provide experimental and non-experimental estimates of causal effects from the same context and across multiple contexts. We show that the range of “true” causal effects in these literatures implies OLS estimates from the right context are, at present, a better guide to policy than experimental estimates from a different context. Third, we show that in important cases in economics, parameter heterogeneity is driven by economy- or institution-wide contextual factors, rather than personal characteristics, making it difficult to overcome external validity concerns through estimation of heterogeneous treatment effects within a single localized sample. We conclude with recommendations for research and policy, including the need to evaluate programs in context, and avoid simple analogies to clinical medicine in which “systematic reviews” attempt to identify best-practices by putting most (or all) weight on the most “rigorous” evidence with no allowance for context.

Suggested Citation

  • Lant Pritchett, Justin Sandefur, 2013. "Context Matters for Size: Why External Validity Claims and Development Practice Don't Mix-Working Paper 336," Working Papers 336, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:336
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. What do 600 papers on 20 types of interventions tell us about how much impact evaluations generalize? Guest post by Eva Vivalt
      by Development Impact Guest Blogger in Development Impact on 2014-11-10 06:36:00

    Citations

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    Cited by:

    1. Hunt Allcott, 2012. "Site Selection Bias in Program Evaluation," NBER Working Papers 18373, National Bureau of Economic Research, Inc.
    2. Rajeev Dehejia & Cristian Pop-Eleches & Cyrus Samii, 2015. "From Local to Global: External Validity in a Fertility Natural Experiment," NBER Working Papers 21459, National Bureau of Economic Research, Inc.
    3. Clive Bell & Lyn Squire, 2017. "Providing Policy Makers with Timely Advice: The Timeliness-Rigor Trade-off," World Bank Economic Review, World Bank Group, vol. 31(2), pages 553-569.
    4. Karthik Muralidharan & Venkatesh Sundararaman, 2013. "Contract Teachers: Experimental Evidence from India," NBER Working Papers 19440, National Bureau of Economic Research, Inc.
    5. Muralidharan, Karthik & Das, Jishnu & Holla, Alaka & Mohpal, Aakash, 2017. "The fiscal cost of weak governance: Evidence from teacher absence in India," Journal of Public Economics, Elsevier, vol. 145(C), pages 116-135.
    6. Das, Ashis & Friedman, Jed & Kandpal, Eeshani, 2014. "Does involvement of local NGOs enhance public service delivery ? cautionary evidence from a Malaria-prevention evaluation in India," Policy Research Working Paper Series 6931, The World Bank.
    7. Florent Bedecarrats & Isabelle Guérin & François Roubaud, 2017. "L'étalon-or des évaluations randomisées : du discours de la méthode à l'économie politique," Working Papers ird-01445209, HAL.

    More about this item

    Keywords

    external validity; treatment effects; policy evaluation; causal inference;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • I2 - Health, Education, and Welfare - - Education
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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