Federal MP Andrew Leigh: Why we need randomised trials

“Randomised controlled trials can improve the way programs are evaluated and designed, improve the quality of economic understanding and, done properly, allow us to make the world a better place,” said Federal Shadow Assistant Treasurer Dr Andrew Leigh at a workshop hosted by UTS Business School.

Dr Leigh was a keynote speaker at the event, organised by the Centre for Policy and Market Design and the Economics Department at UTS Business School, which aimed to bring together policy makers and experts from industry, government and academia to inform each other about research achievements and exchange ideas.

The workshop focused on cutting-edge research in applied experimental and behavioural economics with a special focus on current issues in banking and finance on day one, including issues raised by the banking royal commission, and health and education on day two.

Dr Leigh, whose talk opened the second day, discussed the intention to establish an Evaluator-General, which would sit inside the Department of Treasury and work with other departments to conduct high-quality evaluations of government programs, should Labor be elected.

“Increasingly, policymakers in other nations are evaluating and testing programs through randomised trials, with the same research design that is used to evaluate new pharmaceuticals in clinical drug trials,” Dr Leigh said.

Randomised trials can be used to effectively evaluate programs across a wide range of areas including early childhood, health, crime and employment, and Dr Leigh discussed a number of examples from his recent book Randomistas.

This included social enterprise shoe retailer TOMS, which used a randomised trial conducted by the World Bank to examine and improve the impact of its shoe donation program to impoverished children.

 “We need to recognise that evaluation has enormous value and building up a stronger body of expertise in evaluation in Australia is an important part of this,” Dr Leigh said.

 “There are too many evaluations being done at different levels of government which are essentially of the form ‘please tell us that what we are doing works and please don’t scrutinise it too carefully’.”

Dr Leigh said it was also important to consider how to provide consumers of program evaluations with a better sense of whether they are reading a first-rate assessment of whether a program works, or if it has “just been given a tick”.

He said he saw a special role for collaboration between academia and the evaluator-general in areas such as randomised trials and evaluation reporting.

“There is a thirst for people to do these sort of studies, particularly in economics, because they are highly publishable if done well, and so having an evaluator-general facilitate that enthusiasm from economists and academia will be great.”

Other speakers at the 2018 CPMD Industry Workshop included Monash University Professor of Experimental Economics Lata Gangadharan, Professor of Behavioural Economics Lionel Page who will join UTS this January, The Conversation business editor Peter Martin, UTS Industry Professor Warren Hogan, University of Sydney Economics Professor Deborah Cobb-Clark, incoming Dean of Faculty of Health at UTS Professor Suzanne Chambers, Natasha Doherty from Deloitte Access Economics, Dr Don Weatherburn, Director of the NSW Bureau of Crime Statistics and Research, among many others.