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What Good is Economics as a Science, If Not Based on Field Studies?

Posted on the 23 June 2016 by Center For International Private Enterprise @CIPEglobal


By Dr. Reem Abdel Haliem

This post originally appeared in Arabic on the CIPE Arabia blog.

I currently work with CIPE partner the Federation of Economic Development Associations (FEDA) on a study to bring Egypt’s informal sector into the formal one. Since there are number of studies on this topic, FEDA chose to focus its study on producing a guide – more of a roadmap – that outlines practical steps to facilitating the informal sector’s formalization.

A series of focus groups based on a robust methodology was a must to achieve sound findings and to draw evidence-based conclusions. Through those focus groups, we formed a logical and comprehensive understanding of the problems that the formal sector faces, so to grasp the disincentives that make the idea of formalizing unattractive to the informal sector. Formal sector operators face these problems almost on a daily basis and with a variety of local and national government authorities. This understanding could not be reached through a typical literature review.

Through my experience in the focus groups and with drafting this roadmap, it became clear to me that with the right field research tools, grasping the on-the-ground reality makes policy recommendations more accurate and relevant to addressing the stakeholders’ needs and, as such, makes these recommendations of higher value to the state and the general public.

From this experience, as well as previous ones, I came to understand the different perspectives of stakeholders that we would encounter. For example:

A government official: We spend a large amount of money on health insurance for students and single mothers.

The beneficiaries of the program: We know nothing about this and have never received any of this money.

The field researcher: Why? And how can we solve this problem?

Researchers are more attached to books, equations, and remaining behind closed doors, while forgetting that reality is indeed far more complex; static equations are unable to comprehensively explain real-life situations, no matter how accurate they are.

Let’s imagine trying to resolve the “why” question above through equations and numbers inside closed rooms. It’s almost impossible! Unfortunately, as a result of the dominant and deliberately entrenched idea that economics is a complicated clerical science, the connection between economic researchers and the reality they live in is fading. Researchers have become more attached to books, equations, and staying behind closed doors, where they spend days staring at those same equations and developing theories from them.

In this way, researchers are totally separated from people’s lives, social movements, interest patterns, human behavior, and, in the case of the research topic at hand, the aggregation of informality to such an extent that their numerical calculations cannot comprehensively analyze a situation.

Hence, such a researcher may approach answering the “why” in this way: if you needed to prove an idea, simply link it to previous experiences, develop the equation, study the variables’ behavior, and then write a few lines on your research limitations and data problems — that’s it! You’re done!

On the contrary, reality imposes updates and complex circumstances that these static equations cannot accommodate, no matter how accurate they are. Therefore, economic analysis should build off evidence-based research. Researchers should not assume certain things and just try to prove them without substantial evidence.

This is where field studies, with both their quantitative side (looking for clear numeric indicators) and their qualitative side (looking for economic players and stakeholders’ experiences through interviews and focus groups), are integral to comprehensive economic analysis. This kind of field study contributes to change in the real world, rather than researchers merely tallying their own ideas.

The sound methodology used to select research samples and stakeholders remains a valuable skill and a science that controls, to a great extent, the quality of the findings and results. In Egypt, field studies can help to deter the issue of low quality data being published and to determine the economic realities indicated through the use of high quality data.

Furthermore, field studies can contribute to addressing conflicts between people with vying points of view; they serve as a mechanism to understand different sides of economic management and to provide practical solutions that equations and measurements remain incapable of accomplishing.

Dr. Reem Abdel Haliem, Economist. Abdel Haliem holds a Ph.D. in Economics from the Faculty of Economics & Political Science at Cairo University, where she currently gives lectures on rights-based budgeting and principles of economics.

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