Tuesday, January 10, 2012

The new ethics rules won't hurt and might even help

I was busy interviewing for jobs at the AEA Meeting this past weekend, so I missed lots of cool stuff (including the apparent hijacking of the blogging panel by an angry undergrad!). Among the things I missed, the new code of ethics for publishing in economics was almost certainly the most important. Basically, when you publish a paper in an AEA journal, you must now disclose A) all significant sources of financing for the research, and B) all significant financial relationships with parties who might have an interest in the research. These requirements are similar to what researchers face when publishing in medical journals.

The new guidelines are an attempt to counter allegations that the economics profession has been "captured" by various special interests. The idea is that if people see that an economist who publishes a paper supporting policy X is also being paid by a company or foundation with an interest in seeing policy X enacted, then people will be more likely to take the paper's recommendations with a grain of salt. This, it is thought, could lead to better policy, by preventing special interests from being able to essentially buy peer-reviewed academic articles to bolster their lobbying efforts.

Will these guidelines improve policy? Some are skeptical. There is a real question of how important peer-reviewed articles are to actual policymaking; after all, a lobbyist can cite a white paper from a think tank like the Heritage Foundation more easily than it can cite a dense, math-filled Econometrica paper. On the other hand, peer-reviewed journal articles may have a more subtle influence, spread out over a longer period of time - Keynes' "slaves of some defunct economist" idea.

But I think the important question is: Will the new guidelines hurt anything? I can't see any way that they could. To argue that the rules will make us worse off, you basically have to argue that more information will make the marketplace of ideas less efficient. I guess that's a possible argument to make, but it seems kind of unintuitive. In general, it seems to me that more sunlight can't be a bad thing. And if a policy has potential benefits and no obvious downside, why not do it?

There are a few who disagree, of course. Tyler Cowen thinks that the new rules will backfire on the journals:
[The new code of ethics] will hurt researchers who work in finance...How many people will basically just stop publishing in the top journals?
That nearly made me laugh out loud. Stop publishing in the top journals?? Surely you're joking, Mr. Cowen...

Anyway, kudos to the AEA. They did the right thing.


  1. Anonymous4:48 PM

    Heads up - some of your recent posts (this one and the one on conservatives) are showing up undated, and thus they appear behind previous posts.

  2. Thanks! It's intentional. I'm trying new things...ordering posts by the originality of the content...

  3. I'd love to see Tyler's disclosure statements.

    If he ever publishes anything important enough to affect his funder's interests.

  4. Tyler does get amusing, doesn't he? I wonder what's in his background.

    Any good interviews you can tell us about?

  5. mhm, blogs are quite good, but the debate get a bit fragmented...
    this http://mainlymacro.blogspot.com/2012/01/uncivil-debate-harsh-words-over-fiscal.html is somehow related and I would like to comment here something related to what I commented there...

    We started from a problem: the economic crisis. The stimulus was a tentative solution to this problem. The debate around the efficacy of this solution heated toward controversy and we discovered we have an other problem: there is no overwhelming consensus among economic scientists about the efficacy of fiscal stimulus under this or that economic condition.
    So how we solve this problem?
    A tentative solution has been till now the blame-game. In my personal view this can work in order to catch attention and focus it on the problem, but it cannot directly solve it, because those who feel attacked will not easily change their view, probably they will struggle in order to defend it, so in someway becomes a machtpolitik game...
    Anyway the blame-game is based on the idea that the cause of the lack of consensus is due to a lack of professionalism at best or a lack of intelligence at worst by one of the two sides.
    While I think the idea of the economic incentive disclosure is based only on the idea of a lack of professionalism alone.
    This has been my idea too, that the economic profession receives much stronger 'distorting' incentives then other scientific professions and it's much weaker then other scientific research fields because of the much greater difficulty in conducting controlled experiments (at least in macro).
    If this is true, the disclosure of this incentives could help.
    And personally I agree with Noah point: let's try. But let's say we want to check if there can be counter arguments.
    So what if it's not wrong economical incentives the real cause of lack of consensus?
    Focusing on who pays whom could trigger almost infinite neverending controversies and blame-games
    And what if an economic professional with very strong cash flowing from this or that would develop anyway a true model but which incidentally seems "favorable" (also) to those paying the research? Would be ruled out?
    Maybe this can be a reformulation or elaboration on Mr.Cowen argument (but my focus still remain the present argument not what Cowen thought or meant 'truly').

    Then there is an other problem: even if economists do agree in general and on stimulus in particular we don't know if this will be enough for changing policy-makers view (and incentives)...
    ok, but perhaps we can make a stronger argument then "maybe better economic literature can bring subtle improvement in policy-making" saying something like "with consensus among economists about the working economic policy for solving the ongoing economic problem we aren't sure policy-makers will chose it, but without that consensus among economists we're almost sure policy-makers will chose the non-working policy."

  6. "On the other hand, peer-reviewed journal articles may have a more subtle influence, spread out over a longer period of time"

    I wouldn't underestimate this. When prestigious professional economists speak loudly and en masse, it eventually can influence strongly opinion leaders, VSPs, and powerful politicians, including Presidents. I wish I had Krugman's Peddling Prosperity handy to quote. He writes that the free market movement in the late 70s and early 80s of economists like Martin Feldstein was a big reason for the big rightward lurch of our government and country over the last generation.

  7. And look at the long run influence of Keynes and other Keynesian economists. And would we have nearly as much free trade if not for the basically unanimous support of economists, where perhaps most politicians, VSPs, and opinion leaders heard how great it was in their college econ classes.