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ABSTRACT. Policies impose lotteries of outcomes on individuals, since we never know exactly what the effects of the policy will be. In order to evaluate alternative policies, we therefore need to make some assumptions about individual preferences, even before social welfare functions are applied. Instead of making a priori assumptions about those preferences that are likely to be wrong, there are two broad ways in which experimental methods are used to evaluate policy. One is to use experiments to estimate individual preferences, valuations and beliefs, and use those estimates as priors in the evaluation of policy. The other approach is to undertake deliberate randomization, or exploit accidental or natural randomization, to infer the effects of policy. The strengths and weaknesses of these approaches are reviewed, and their complementarities identified.

This paper aims at analysing the linkages between international trade openness and poverty in Argentina. Under a specific-factors setting, a two-step procedure is presented. In the first stage the change in prices of goods and factors in both tradable and non-tradable sectors, after a trade liberalisation episode, is considered. In a second step, these variations are applied to assess the changes in poverty and households ’ welfare. A microsimulation approach, using households ’ survey data, is applied in this last stage. Poverty is reduced as a result of the policy, and the households that benefit from this reduction are those linked to the nontradable sectors. ∗Comments to previous versions of this paper received from G. Calfat, M. Olarreaga, G. Reed, A. Díaz Cafferata and L. Berlage are gratefully aknowledged. A. Daniela Cristina provided also

ABSTRACT. Experiments are conducted with various purposes in mind including theory testing, mechanism design and measurement of individual characteristics. In each case a careful researcher is constrained in the experimental design by prior considerations imposed either by theory, common sense or past results. We argue that the integration of the design with these elements needs to be taken even further. We view all these elements that make up the body of research methodology in experimental economics as mutually dependant and therefore take a systematic approach to the design of our experimental research program. Rather than drawing inferences from individual experiments or theories as if they were independent constructs, and then using the findings from one to attack the other, we recognize the need to constrain the inferences from one by the inferences from the other. Any data generated by an experiment needs to be interpreted jointly with considerations from theory, common sense, complementary data, econometric methods and expected applications. We illustrate this systematic approach by reference to a research program centered on large artefactual field experiments we have conducted in Denmark. An important

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IFPRI on September 16 th, 2005 for their helpful comments and suggestions. Special thanks to Alex Mc Calla for very helpful and interesting discussions. The usual disclaimer applies.

Trade policies can promote aggregate efficiency, but the ensuing structural adjustments generally create both winners and losers. From an incomes perspective, trade liberalization can raise GDP per capita, but rates of emergence from poverty depend upon individual household characteristics of economic participation and asset holding. To fully realize the growth potential of trade, while limiting the risk of rising inequality, policies need to better account for microeconomic heterogeneity. One approach to this is the geographic targeting, which shifts resources to poor areas. This study combines an integrated microsimulation-CGE model with the small area estimation to evaluate the spatial incidence of Vietnam’s accession to the World Trade Organization. Provincial-level poverty reduction after full liberalization was heterogeneous, ranging from 2.2 per cent to 14.3 per cent. Full liberalization will benefit the poor on a national basis, but the northwestern area of Vietnam is likely to lag behind. Furthermore, poverty can be shown to increase under comparable scenarios. 1