Could development economics be more useful?

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Source: Jesús Fernández-VillaverdeThe above image is from a recent tweet by University of Pennsylvania economist Jesús Fernández-Villaverde (henceforth referred to as “JFV”), in which he criticizes the field of development economics for ignoring the big questions. He writes:A fundamental lesson from my posts these last two weeks on modernization, industrial policy, and development is that development economics should be about understanding why South Korea got rich but Bolivia did not. The current field has largely given up on that question. Sharply identified RCTs on small micro programs are a fine way to publish in the AER and get tenure at a fancy university, but a profession that knows everything about microfinance impact evaluations and almost nothing about industrialization has misallocated its own intellectual capital on a pretty heroic scale.JFV’s critique of modern development econ isn’t new. Eminent economists have been complaining about randomized controlled trials for years. I wrote about this back in 2020:In 2019, Lant Pritchett — then at Oxford — made an argument very similar to JFV’s when he criticized that year’s Nobel winners:People keep saying that the recent Nobelists “studied global poverty.” This is exactly wrong. They made a commitment to [the RCT] method, not a subject, and their commitment to [that] method prevented them from studying global poverty…[P]overty programs…account for less than 1 percent of total variation in poverty…[C]hanges in [actual] poverty…are overwhelming associated with growth in median income/consumption…[V]ariation in the size a…