Evidence-Based Policy Mistakes

Kaushik Basu at Project Syndicate: “… it is important to recognize that data alone are not enough to determine future expectations or policies. While there is certainly value in collecting data (via, for example, randomized control trials), there is also a need for deductive and inductive reasoning, guided by common sense – and not just on the part of experts. By dismissing the views and opinions of ordinary people, economists may miss out on crucial insights.

People’s everyday experiences provide huge amounts of potentially useful information. While a common-sense approach based on individual experience is not the most “scientific,” it should not be dismissed out of hand. A meteorologist might detect a coming storm by plugging data from myriad sources – atmospheric sensors, weather balloons, radar, and satellites – into complex computer models. But that doesn’t mean that the sight of gathering clouds in the sky is not also a legitimate sign that one might need an umbrella – even if the weather forecast promises sunshine.

Intuition and common sense have been critical to our evolution. After all, had humans not been able to draw reasonably accurate conclusions about the world through experience or observation, we wouldn’t have survived as a species.

The development of more systematic approaches to scientific inquiry has not diminished the need for such intuitive reasoning. In fact, there are important and not obvious truths that are best deduced using pure reason.

Consider the Pythagorean Theorem, which establishes the relation among the three sides of a right triangle. If all conclusions had to be reached by combing through large data sets, Pythagoras, who is believed to have devised the theorem’s first proof, would have had to measure a huge number of right triangles. In any case, critics would likely argue that he had looked at a biased sample, because all of the triangles examined were collected from the Mediterranean region.

Inductive reasoning, too, is vital to reach certain kinds of knowledge. We “know” that an apple will not remain suspended in mid-air, because we have seen so many objects fall. But such reasoning is not foolproof. As Bertrand Russell pointed out, “The man who has fed the chicken every day throughout its life at last wrings its neck instead, showing that more refined views as to the uniformity of nature would have been useful to the chicken.”

Of course, many policymakers – not just the likes of Erdoğan and Trump – make bad decisions not because of a misunderstanding of the evidence, but because they prefer to pursue politically expedient measures that benefit their benefactors or themselves. In such cases, exposing the inappropriateness of their supposed evidence may be the only option.

But, for the rest, the imperative must be to advocate for a more comprehensive approach, in which leaders use “reasoned intuition” to draw effective conclusions based on hard data. Only then will the age of effective evidence-based policymaking really begin….(More)”.