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On the Capture of Economists: The Ticker
At its annual meeting this week, the American Economic Association adopted a new set of ethical guidelines requiring economists to disclose funding sources and other potential conflicts of interest when they publish papers, and urging them to do the same when they make public comments. The aim: Combat the perception that academic economists have been captured by the industries they study.
Judging from a presentation by Luigi Zingales, a professor at the University of Chicago's Booth School of Business, the economics profession has its work cut out for it. Economists, he notes, face pressures similar to those that have led to capture of regulators by the industries they're supposed to regulate. Academics often depend on the business community for the data they need to do their research, for the consulting gigs and board appointments that pad their salaries and for the contributions that keep their departments running. Also, in order to publish the papers that make their careers, they commonly face the scrutiny of editors who themselves are positively disposed toward the interests of business.
As a small test, Zingales looked at the 150 most-downloaded papers that had been done on executive pay. He found that papers supporting high pay for top executives were 55 percent more likely to be published in prestigious economic journals. They were also much more likely to be cited in other papers.
Zingales offers a couple ways to combat capture. For one, making more data publicly available might limit the influence businesses can wield. Beyond that, if journal editors and department heads are more aware of the dangers, they might better be able to monitor their own behavior. That wouldn't be enough to eliminate the adverse incentives, but it would be a start.
(Mark Whitehouse is a member of the Bloomberg View editorial board.)
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