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Turn the Office Into a Lab

Randomized controlled trials help firms find out what’s going wrong (and right) in their organizations

Maria Guadalupe
Wed, 03/04/2020 - 12:03
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When the 2019 Nobel Prize in Economics was announced, it was an exceptional moment because in addition to celebrating contributions to economic science, a methodology was also recognized. The laureates Abhijit Banerjee, Esther Duflo, and Michael Kremer are known for their work in randomized controlled trials (RCTs), which develop evidence-based recommendations for public policy and organizations in the fight against global poverty.

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Work with RCTs has led to the identification and implementation of impactful poverty-reduction policies in areas such as skills training and agriculture. But as a methodology, RCTs are not only for the developing world. They have been used for decades in pharmaceutical companies’ clinical trials, and in this age of data, they hold enormous promise to identify business solutions and support evidence-based management.

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