In my experience, though, too many students who are interested in making a difference in the real world go on to the Ph.D--and for the wrong reason. As I always tell students asking me for advice on this, the only good reason to want to do a Ph.D. is that you want to be an assistant professor at some academic institution.I'm inclined to agree with Rodrik - the PhD is a research-oriented degree, and since most jobs for PhDs are in academia and the job market is relatively thin (PhD economists can get good jobs, but usually have limited choices) people who go into PhD programs hoping to do something non-academic may be setting themselves up for disappointment. However, some of the commenters on Rodrik's blog make a case that a PhD is an important credential for working at multilateral institutions like the UN and World Bank.
This made me think of the last of Marx's Theses on Feuerbach (which, like Nigel Tufnel's amplifiers, go to eleven):
The philosophers have only interpreted the world, in various ways; the point, however, is to change it.If you agree with that, a PhD may not be for you; if you're response is "interpreting the world, in various ways, sounds like a great job," then you should consider applying for graduate school.
To be sure, research and teaching do "make a difference," so an academic job does feel socially useful, but professors generally don't get the gratification of concrete or immediate results from their work.