Development Economics: A Guide to High-Impact Careers

Development economics is a subfield of economics that focuses on economic conditions and well-being of people in low and middle-income countries. Development economists will often work in governments, NGOs, think tanks, and academia, trying to incorporate and improve evidence-based policies and programs. We believe this can be a promising path for those interested in ways to help people living in poverty today with fairly high confidence of having an impact. 

Path overview

What do we mean by development economics?

Development Economics is a branch of economics that focuses on understanding the core causes of poverty, economic development, growth, and other factors affecting the population’s welfare in low and middle-income countries. In addition to “purely economic” policies, it often focuses on policies or programs related to health, education, or workplace conditions. These insights are then used to inform specific programs, as well as broader policy design, touching on economics, political structures and technological innovation. 

Within this path we include a wide range of careers which utilize an expertise in development economics – including academic research, think tanks, NGO work, and governmental roles.

How promising is development economics as a career path?

Development economics is an important and underutilized tool in public policy, as well as aid and development. Applied work which evaluates and directs the policies of governments and NGOs can often make clear differences in real-world policy which affects millions, and sometimes hundreds of millions, of people. For example, a development economist might figure out ways to vaccinate people more cost-effectively or ensure a government vaccination program is reaching everyone it’s intended to. This work is especially valuable if you manage to advocate for the use of measurement, evaluation and evidence-based policies in organizations that would not have necessarily embraced these ideas otherwise.

More indirect paths within development economics, such as working in think tanks, and even more so in academia, are harder to evaluate. In such paths, a talented individual could lead a long and successful career but still easily end up not having an impact at all. But it’s possible that through their effects on many other practitioners, these paths can indirectly have a larger impact than an applied role. We do not have sufficient information at this time to properly evaluate how promising the more indirect academic roles are relative to the (clearer) applied path.

Some of the most inspiring examples of how development economics can lead to immense positive impact are those of the recent Nobel laureates Esther Duflo, Abhijit Banerjee and Michael Kremer. These groundbreaking development economists crossed the divide between academia and application, introducing the methodology of randomized controlled trials into the development field, catalyzing hundreds of experiments which have become the basis for modern policymaking, leading the top impact evaluation organizations, and finally advocating for the incorporation of evidence into policy making globally. Though it is always difficult to extrapolate from past revolutionary research, there is still an enormous amount of applied work left to be done. The painful tradeoffs that exist today between costs, scale, and reliability still leave much room for improvement and innovation.

Advantages

• Opportunities for direct large-scale impact, especially when doing applied work that influences policy in large organizations with significant resources.
• Opportunities for additional impact through teaching or advocacy.
• Opens up doors in a wide range of different roles and paths within development and economics and across sectors, which allows for experimentation and course correction.
• The relevant roles are also in high demand, leading to relatively high job security.
• For roles within academia, academic freedom allows you to focus on important and neglected problems you believe in, which can be favorable from both a personal and impact perspective.

Disadvantages

• We are not certain about the replaceability of such efforts – how much of these efforts would have happened even if you didn’t choose this path, and how much an improvement in the quality of the work improves outcomes.
• This career is strongly committed to global health and development as a cause. If you either don’t believe this is the most effective cause to work on, or are unsure about what cause you’ll want to work on in the future, this career path is not nearly as valuable for other cause areas.
• Depending on your values and beliefs, and particularly for those that give high moral weight to the suffering of animals, this career path can seem significantly less promising than others due to the meat-eater problem.
• For those who want to maximize their positive impact over the long term, there are other cause areas and career paths that seem to have a more robustly positive effect on the long term future.
• Low income relative to alternatives available to those who are a good fit for this role.

Is it a good fit for you?

What is needed to be successful

In order to succeed as a development economist, you need some combination of the following skills:

• An open mind and willingness to change your mind based on the evidence – it is incredibly easy to try and fit data to your narrative rather than your narrative to the data, and at that point you stop improving policies and start obfuscating them. You need a curiosity and eagerness to learn, even in cases where new data will contradict your existing preconceptions and beliefs.
• Ability to synthesize information – you’ll be looking at a lot of data, and reading multiple papers on results in different circumstances, and you’ll need to make conclusions based on the aggregate of those results.
• Solid (though not exceptional) quantitative and data analysis skills – including the ability to understand statistics, econometrics, quantitative research methods, manipulating large data sets, ability to learn a simple scripting programming language (such as Python, R, or Stata).

You may be a particularly good fit for this path if you are from a middle- or low-income country, you are passionate about improving institutions in your own country, and you are interested in combining evidence-based policies and cutting-edge techniques with an understanding of local context, needs, and values. The experts we’ve spoken to in the field consistently emphasize the value people in such circumstances can bring, and the field as a whole has been increasingly recognizing this gap in recent years. As a result, we believe people in these circumstances may find particularly good opportunities in the field in the upcoming years.

Who would be satisfied in this role

There are several indications that a person would be enthusiastic about this role:

• An interest in low-income and middle-income countries, as well as either aid, development or economics. The core question your career would be trying to answer is “What is the best way to systematically improve the lives of those living in this region?”
• Living in (or being willing to move to) a relevant region – it is difficult to succeed as a development economist without having a deep understanding of the region you are studying. If your home country is a relevant area to focus on, you can bring a lot of insight to this work, and people from low- or middle-income countries are painfully underrepresented in the field at the moment. If you’re not originally from a low-income country, it helps to be deeply passionate about a relevant country or region, and being willing to move there at least for a few years or at the very least traveling frequently (though you can still begin this path before deciding on a specific country).
• Compared to economics, development economics (and particularly applied development economics) is an even more collaborative endeavor – often requiring close collaboration and back and forth with other academics, as well as governments, NGOs, or the communities you aim to help. Those interested in economics but excited about meaningfully engaging with many people, cultures and circumstances might find this path enticing.
• Relative to development work, development economists tend to be those more comfortable with abstractions. Rather than custom-building an approach for a single case, they tend to look for ways to apply abstract models that might identify underlying factors and could be applied to other situations as well. 

There are several things that are likely to make you unhappy in this career path:

• Difficulty engaging with people significantly worse-off than you – in your career you will be constantly engaging with those that are less fortunate (even if this is in your own country, but even more so if you come from a high-income country). For some people, this can be difficult, uncomfortable or demoralizing.
• Emphasis on work-life balance. Though this career path can support a work-life balance (which is a plus), it is challenging to do it well from a distance, and so work will often require you to travel to wherever the next project is.

How to test personal fit

Personal fit is really hard to estimate in advance, but gaining practical experience can help. In this section, we recommend several cost-effective steps for testing your personal fit for development economics:

• Check out the various additional content at the bottom of this article, and see if it interests or excites you.
• If you haven’t yet, spend some time in low- or middle-income countries. Some find it an eye-opening and inspiring experience, and some find it very difficult. 
• Take an econometrics course either at your university or online, and see if you find it exciting. Don’t ask yourself whether you think econometrics will excite you (or whether you think it’ll be too hard), but actually try it out and see. Many people underestimate their interest and abilities in this space, especially if they were taught to be scared of math.
• Enroll in the MITx MicroMasters Program in Data, Economics, and Development Policy. It is taught by some of the world’s top development economists, enrollment fees are adjusted to your ability to pay (or free if you don’t want the credit), and performing well in it can allow you to apply for an in-person master’s program at MIT to continue your education in one of the world’s top programs in this field. You can also enroll in only part of the courses to more incrementally check whether this type of degree interests you.
• Apply for scholarships in top Public Policy or Development Policy academic programs and see if you get accepted.

Priorities within development economics

Within the field of development economics there is a fairly wide range of different roles. In this section we share a few we believe are particularly impactful, depending on your skillset.

Policy work within impactful organizations

If you are capable of advocating for your beliefs and changing things within organizations, we believe accepting roles within governments, bi-lateral and multi-lateral organizations, or particularly well-resourced NGOs or foundations can be a high priority path. Many of these organizations will often base decisions on gut feelings or politics, and being able to direct them to the relevant research, or to support transparency and evaluation in their own projects can be highly impactful due to the immense resources it can shift.

It is not always trivial to identify in advance whether you have the skills necessary (e.g. being politically savvy), or if the role you’re applying to has the authority/leverage to make such a shift – but if you believe the opportunity is there, we believe it can be a high-potential bet.

Potentially high-impact organizations for this path include local and national governments (including foreign aid departments), the World Bank, and BRAC – one of the largest NGOs in the world, which has implemented some of the most effective programs. 

Top evidence-based policy research centers

There are several evidence-based policy research centers that not only generate impactful research, but make sure to constantly connect their work to impact on the ground, and consistently work with hundreds of governments and NGOs to enact large-scale meaningful change. Here, we’ll list some of the most promising organizations and research centers that we’re aware of (though please bear in mind this is far from an exhaustive list!). 

Examples of top global organizations who hire in multiple countries include: The Abdul Latif Jameel Poverty Action Lab; Innovations for Poverty Action; IDinsight, the DIME group within the World Bank, Precision Agriculture for Development, and the International Food Policy Research Institute. 

India-based organizations include: Development Data Lab, and the Centre for Policy Research. For more India-based organizations, this list from Women in Econ and Policy is fairly comprehensive. 

Within the US, some top organizations include: The Center for Effective Global Action at Berkeley, Evidence for Policy Design at Harvard, the Development Innovation Lab at the University of Chicago, and GiveWell. 

We don’t have sufficient information to properly estimate the impact of more indirect roles, such as more basic academic research in this space, or think tanks aimed at changing governments’ or the public’s views on different policies – though this doesn’t mean it is necessarily less impactful. We believe (but are uncertain) that the more pure-research approach is more promising if you have good reasons to believe you are exceptionally talented in the field, and are willing to work extremely hard (while the policy work is valuable even without such constraints).

Though the roles differ substantially, it is not too difficult to move between research and policy – so we recommend experimenting and forming a more informed view than we are able to provide. You can see a good blog post on research vs. policy jobs in economics here.

Strategies and next steps

Getting into the field

For those interested in getting into the field, we recommend the following options:

• Study economics. This is probably the best first degree to study for those interested in development economics, but doesn’t commit you to this path yet. Other STEM degrees can also often continue to advanced degrees without going back to do an economics degree (but with some preparatory work required).
• Recommendation letters hold a critical importance in getting into good schools. If you can, try working for a professor who is known internationally before grad school.
• Study a Masters degree in Public Policy (with a Development Economics specialization), or some other quantitative development- or economics-related specialization. Some qualitative programs, such as Development Studies, sound similar but are actually not very useful to this career path. Note: you can get into junior positions even without a Masters degree, but most more advanced positions will require it.
• Enroll to the MITx MicroMasters Program in Data, Economics, and Development Policy, especially if you can’t afford or don’t have access to a full on-campus high-quality Masters program.
• If your interest is policy, try taking any opportunity that you can, such as internships (especially in the top institutions) or small consulting contracts. Professors often get many requests for consulting and can’t support them all, and are happy to outsource the lower priority ones to enthusiastic students who express an interest.

Excelling in the field

If you want to excel in the field, you should keep in mind the following advice:

• Though you want to begin your career by deeply understanding one region, as your career advances you’ll want to broaden your expertise. Often where you can provide the most value is by importing information or experience from other regions or specialties.
• Emphasize working with people you admire, who can teach you a lot, and with whom your values align. 
• Work together with policymakers to co-design the research you’re doing, and aim to constantly learn from them. This will both improve relationships, and make sure your experiments are responsive to actual needs on the ground.
• Within every project, define what your goals are and focus only on what will move the needle on achieving your goals or the intended policy changes.
• Doing a PhD is critical if your focus is on academic research. If your focus is on more applied positions, then a PhD is still valuable but many would argue the same time would be better spent elsewhere. One exception to this is in countries where a PhD is required to work in relevant roles for the government, at which case a PhD could also be critical for policy work.
• Maintain a social network of peers you can talk to. This can be a challenging career, with many setbacks and hurdles. It’s important to have professional peers that can support you and keep you motivated.

Additional resources

• The World Bank’s impact evaluation blog Development Impact.
• J-PAL’s’, CEGA’s, and IPA’s newsletters are a great way to get to know the field better continuously in digestible chunks.
• 80,000 Hours’ podcast interview with the UK aid agency’s Chief Economist.
• From Poverty To Power is a good development blog by Oxfam’s Duncan Green.
• The Econimate YouTube channel explains the latest economics research with stick figures.
• Poor Economics and Good Economics For Hard Times are two great books by Nobel laureates Esther Duflo and Abhijit Banerjee, which are both informative and inspiring.
• If you prefer audio, the World Bank’s The Development Podcast is a great resource.
• Raj Chetty’s Big Data to Solve Economic and Social Problems is a free course about how economics can solve important problems. It’s free, and a good way to find out whether you’re passionate about economics. The course focuses on the US, but the principles it discusses apply everywhere.
• Our World In Data is a great resource for development-related data, and can be used to look up data on specific issues you’re interested in, or just browsed casually.
• MITx MicroMasters Program in Data, Economics, and Development Policy is probably the next best thing after a full on-campus Masters degree.
• DisasterReady.org offers many (free) resources for developing skills relevant to humanitarian aid and development.