BIG ANSWERS FOR BIG QUESTIONS: THE PRESUMPTION OF MACRO By Abhijit Banerjee
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PRESUMPTION OF MACRO
Institution
PRESUMPTION OF MACRO
I found Banerjee’s paper a pleasure to read, both provocative and compelling. As
Banerjee concedes, the most important questions in development are often “macro” ones
such as how to boost growth in the fashion of China and India in recent decades. But,
Banerjee emphasizes, we don’t kn...
Discussion by Pete Klenow (Stanford University) of:
BIG ANSWERS FOR BIG QUESTIONS: THE PRESUMPTION OF MACRO
By Abhijit Banerjee
Brookings Institution Global Economy and Development Conference on What Works in
Development? Thinking Big and Thinking Small, Washington, D.C., May 2008.
, I found Banerjee’s paper a pleasure to read, both provocative and compelling. As
Banerjee concedes, the most important questions in development are often “macro” ones
such as how to boost growth in the fashion of China and India in recent decades. But,
Banerjee emphasizes, we don’t know very much about how to do this despite lots of
research effort. So he suggests we largely abandon macro development research and
concentrate on micro development questions such as the effect of randomized
interventions in health and education. The following Table summarizes Banerjee’s
position.
Welfare Welfare Knowledge
=
Research Knowledge Research
Micro 0 Low High
Macro 0? High Low
I wholeheartedly agree with the “micro” row in this Table, so will say no more
about it. Instead I will defend the value of doing macro development research. As I
consider myself at the micro data end of the macro spectrum, I do this without feeling
particularly defensive.
I begin by drawing an analogy to potential micro vs. macro divides in medicine
and biology. Consider “micro” researchers in medicine who do carefully controlled
clinical trials and lab work. I imagine they might disdain “macro” medicine, which looks
at trends in life expectancy, heart disease, cancer, autism, etc. Their skepticism may
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