This week brought two high-profile business school professors heading for economic policy jobs in the U.S. and Asia. The MIT Sloan School of Management announced on Tuesday that professor Simon Johnson won a spot at the Treasury Department’s Office of Financial Research. On Wednesday Columbia Business School‘s Shang-Jin Wei began his job as chief economist at the Asian Development Bank.
The professors have big ideas about such thorny issues as reforming banks and the value of outsourcing. The simultaneous career moves suggest they might want to promote those ideas in a public sphere and aren’t satisfied simply to influence the next generation of managers in the halls of the country’s elite B-schools.
At Treasury, Johnson will serve on the Financial Research Advisory Committee. His appointment follows the publication of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Vintage, 2011), a book Johnson co-authored that proposes strict limits on the size of banks. Johnson maintains that “No financial institution should be allowed to control or have an ownership interest in assets worth more than 4 percent of U.S. gross domestic product, or roughly $570 billion in assets today,” according to a2010 Bloomberg report on the book.
Shang-Jin Wei will lead the ADB’s research into the economic health of Asian countries. Wei previously worked as a researcher at the International Monetary Fund, where he wrote that outsourcing doesn’t lead to fewer jobs and can improve labor productivity (PDF).
Simon and Wei are taking roughly the opposite trajectory of Timothy Geithner, the former Treasury Secretary who will return to Yale School of Management this fall to teach a course on the financial crisis of 2007 and give lectures on how he tackled the situation from within the government.
When business school faculty members emerge from academia to tackle economic policy making or market commentary, some question whether taking on public roles raises conflicts for professors. Harvard Business School professor Benjamin Edelman drew attention to himself this March, for example, when he wrote a blog post accusing the ad company Blinkxof squirreling software into people’s desktops. The trouble was that Edelman had come upon this tidbit while researching Blinkx at the behest of unnamed U.S. investors; when the company’s stock tanked, at least one portfolio manager wondered if Edelman’s clients had profited.
Both Johnson and Wei are on a path that many academics follow to relatively wonky jobs in political institutions. Professors make up a third of the Treasury committee that Johnson joins, and Wei’s predecessor at the Asian Development bank was a scholar of economics at the University of Rochester.