Title: Theory, general equilibrium and political economy in development economics
Description: "I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations.  I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for counterfactual and policy analysis.  I discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions.  I illustrate the main arguments using examples from recent work in development economics and political economy"--National Bureau of Economic Research web site.