It’s surprising and refreshing to see Bloomberg News, via an editorial, take on the way the economics profession has failed to clean up its act not simply in the wake of a massive intellectual failure but after the movie Inside Job highlighted some examples of corruption in the ranks of Famous Economists.
As the Bloomberg piece notes, the American Economics Association has responded to criticism about conflicts of interest, but the remedy is insufficient. The AEA will now require economists making public pronouncements or presenting papers to disclose any funding they received. That’s better than nothing, but short of what is necessary.
First, an economist may have a past client that he would very much like to be a future client. So he might be disinclined to ruffle their feathers and might blunt some research findings so as to keep the door open.
Second, the conflicts don’t merely lie with those writing papers, but with those selecting papers for publication and presentation at conferences. Bloomberg cites the work of its sometimes contributor Luigi Zingales:
As a small test, Zingales looked at the 150 most-downloaded papers that had been done on executive pay — a subject he reasoned could legitimately be argued either way. He found that papers supporting high pay for top executives were 55 percent more likely to be published in prestigious economic journals, suggesting that the editors, also academic economists, have a bias.
And Zingales points to a systemic bias in the discipline:
Even the best-intentioned economists — and particularly those in the area of finance — face a litany of influences pushing them toward a rosier view of the industries they study. In a yet-to-be-published paper, Luigi Zingales, a finance professor at the University of Chicago’s Booth School of Business, likens the pressure to regulatory capture. A pro-business attitude, he notes, can increase an economist’s chances of landing lucrative consulting, expert-witness and research contracts, and can facilitate publication in academic journals whose editors are themselves captured.
Although this is a small step, it is still refreshing to see a major publication, and one with an audience of major consumers of economists’ output, speak out on this issue. And I particularly like idea:
Zingales, for example, envisions a university center that would name and shame academics who do suspect research for money.
Can I have that job?