The Telegraph has an article on seven scientific experiments that would have large pay-offs to science, but which would be completely unethical. Examples include separating twins at birth, testing new chemicals on humans, and cross-breeding a human with a chimpanzee. For each, they discuss the scientific premise, and the payoffs to science if it were to be accomplished. The closest thing to an economic experiment among them is the twin separation – where there have been many studies that look at twins in different environments. However, this got me to thinking, what are the experiments that would offer most potential in economics, but would never be able to be done for ethical reasons?
Maybe your imagination is better than mine, but the examples that come immediately to my mind are mostly macro ones. For example:
· Randomly deciding which institutions different countries have – there is a huge literature about the importance of institutions, but they are intertwined with so many other things about cultures and countries it is hard to know specifically what matters…
· Randomly experimenting with different tax and expenditure policies – let’s solve the debate once and for all!
· Industrial policy experiments – should countries be trying to follow the model of Korea/China and develop through light manufacturing and heavy state intervention, or should they be trying to develop their natural resources more, and developing more like Australia/Chile?
I’m not sure what would be the most interesting micro experiments – many of the key things we’d actually like experimental evidence for we are starting to see experiments providing it, or at least I see hope that we could in the future. What do our readers think, if you had your own planet to experiment on, what experiment would benefit economics most?