COLLISON: Yeah. What are the, say, top two most underinvested areas of economics today?
COWEN: Culture and economics, for me, is by far the most underinvested. I still think randomized control trials, they’re expensive, but you do actually learn things from them, which are probably true. That’s remarkable.
COWEN: They contain actual knowledge. Now, it’s true the questions you can ask are narrower, but it seems odd to turn down the reward of actual knowledge, right? [laughs]
COLLISON: You recently linked to the new book whose title is escaping me — you’ll probably remember it — on the series of interviews on random control trials in economics. And there’s all these questions about to what degree they have external validity and so on. Do you think the critics are overstating the case?
COWEN: One of the main criticisms is, if you do randomized control trials, you’re studying something like, “Well, does paying mothers to bring their children in for vaccines work in getting the mothers to bring the children in?” You’re not asking big-picture questions of political economy. But big-picture questions of political economy — they can be very hard to control. There’s no one who can steer, say, what will happen with India or Kenya, but you can change some policy regarding, “Do you reward mothers for bringing their children in for vaccinations?”
You know the subtitle of our blog, “Small Steps Toward a Much Better World”: there’s something to that. We can make a lot of these small steps. It’s also related to the correct attitude about management. A lot of good management is doing very small things and not always some grand philosophy. So I think this is actually still underrated.