Chris Blattman had an excellent post recently on the importance of trial and error in creating effective development policies. It’s worth quoting at length:
One trouble I have is that I think even very smart and experienced people are profoundly bad at knowing what the problems are in the economy, where the political winds are blowing, and what will work. This needs to be said out loud as well.
To take an example from a smaller scale: I spend a lot of time studying local labor markets in Africa, especially when people opt for crime or mercenary work rather than farming and business. I try to figure out what holds back legal work and test programs that deliver those things: skills, capital, socialization, and so on. And I get it wrong almost every time.
What I mean is that the experiments never end like I expect them to. Even (maybe especially) when they work out. I was blindsided by how frequently the poorest young men in slums of Nairobi have a home robbery or theft, meaning it’s almost impossible to accumulate capital. I was amazed that, yes, with a little skills and capital that a young woman can become the 183rd tailor in her community and turn a good profit.
This isn’t a defeatist point of view. I’d make a different point: the way I’ve learned how things operate is to work with a government or organization to try out a policy and succeed or fail. … This sounds like a good way to figure out the way your world works (your model), and then to reform. A lot of people would say this is China’s secret to success: informal experimentation on a grand scale. The problem, as I see it, is that most governments and aid organizations I’ve worked with are really, really bad at this. They don’t use the lessons from past failures to try again a different, better way. They don’t throw out bad programs.
The key point:
To me the important question is not “what is the right policy?”, but “what is the process for generating good policies over time?”.