Non-conformism in academia

In economics, there is the mainstream and various heterodox fractions that do not identify with the mainstream or each other. Too many, the heterodox seem like annoying and useless chatter. But they fulfill an important role, which is to keep those in the mainstream on their toes. This is part of the scientific process: challenge long and widely held views to check whether they are still valid. And even if the challenge is wrong, it makes those in the mainstream think about the axioms the build their theories on.

Vela Velupillai makes the case that dissenters are typically silenced by the mainstream, but may prevail in the long-run, citing many examples of mathematical economics, in particular the work of Pietro Sraffa. And this is really what tenure is good for: a dissenter will have much trouble publishing but may ultimately still contribute a lot to scientific advances.

We are in times were dissenters seems to have a more receptive audience. Indeed, the current crisis is seen by some as a failure of Economics, thus it is easy to criticize it. But it also highlights that dissenting can be very distracting if it is poorly focused, uniformed and populist. In this regard the recent dissenting by Colander, Krugman and Stiglitz has, I think been counterproductive, as I have occasionally discussed here. It is good to criticize the fundamental assumptions of the mainstream. It is better, but not necessary to offer alternatives. But it is counterproductive to dissent on the basis of a old read of the literature, and a literature that has in the meanwhile evolved to address these supposedly new criticisms.

Heterodox Economics has thus gained a fresh wind, simply because it is different from the mainstream. But what does it have to offer? Peter Skott, a heterodox economist himself, argues that it is still far from being an viable alternative. While heterodox approaches usually reject microeconomic foundations in macroeconomics, they should not throw out the baby with the bath water, i.e., ignore microeconomics altogether. And while the heterodox analysis for income distribution has focused on the labor income share, the large changes in income inequality happened within labor income. Finally, the heterodox literature is just as guilty of ignoring many of the suddenly relevant intricacies of the world of finance.

There is still a lot of work to do, and instead of pursuing an excess of mutual accusations and claiming Economics is useless, it seems much more appropriate to put more resources into making it better, heterodox or mainstream. After all, medical research was not defunded when the HIV/AIDS epidemic made ravages.

Why top MBA programs do not disclose grades

I have always been puzzled by the policy of many top MBA programs not to disclose the grades of their students. Even more puzzling is that they by and large manage to enforce this policy even from their top students, who should obviously want to signal that they are at the top of their class.

Daniel Gottlieb and Kent Smetters wondered about this as well. Such policies are voted by the students (who in the US own the grades) on the argument that it allows them to take more difficult classes without adverse consequences. Yet the evidence is that they learn less when such a policy is in place, which explains the general opposition to it from faculty. So, one can conclude that students are lazy (nothing new here), but is such a policy limited to top MBA programs? Why not in lesser programs, or other professional schools?

Gottlieb and Smetters point out that students have two signals for potential employers: their grades and the selectivity of the program. They are also risk averse, and at the start of their studies do not know how well they will do. In top schools, the selectivity signal is very strong and the students rely on it, while the "average" grade is superior in expected terms. In lesser schools, the selectivity signal is much weaker, and hence students try to distinguish themselves on the labor market in other ways, for example with grades.

To some extend, the same is happening on the Economics PhD market. When you look at the recommendation letters form the top schools, all candidates are the best in a generation in their field (I am exaggerating on a little). Thus the letter looses a lot of its value, and all that remains is the entrance selectivity of the PhD program. Lower ranked programs are much keener to differentiate their students and push the particularly good ones.

Economists' political bias and model choice

One can count on Gilles Saint-Paul for innovative research topics. During his career, he has addressed and impressive array of topics that range far beyond Economics strictu sensu. For this reason, I have reported several times about his latest research.

His latest opus is an introspection in our profession and how our political biases influence our modelling choices. He claims that an economist with conservative inclinations will favor a model with smaller fiscal multipliers. While the ethical thing to do would be to be driven by empirical evidence, this may just be a subconscious choice. But at least economists strive to be logically consistent, and if one choose a large multiplier, then then must also claim that demand shocks are substantial, as models with large multipliers rely on this. Looking at evidence from the Survey of Professional Forecasters, Saint-Paul finds that forecasters who believe that expansions are more inflationary also adhere to the belief that public expenses are less expansionary.

Saint-Paul goes further, though. His claim is that we live in a self-confirming equilibrium. We devise theories to understand our surrounding and take decisions, and those decisions then shape the economic environment. Theories can thus survive even if they deviate from the true structure as long as the decisions make it conform. This is a statement about a lack of uniqueness of the path to the rational expectations equilibrium. In a sense, this is not too disturbing, as long as decisions are still optimal and outcomes do not differ too much from the rational expectations first best. And if this true, we will never know what the rational expectations first best is. Of broader implications would be if the political agenda of an economist would lead an economy on an different path, on a different self-confirming equilibrium. Is this why Europe and the United States are different? Were Keynes and von Hayek that influential?

Bruno Frey's academic utopia

Bruno Frey has fallen into disgrace these days as he has been shown to play dangerous games of self-plagiarism, submissions to multiple journals and hypocrisy in describing the perverse incentives facing researchers. I have argued recently that he is living in a bubble that has now popped.

Apparently not. With this wife Margit Osterloh, he just authored a paper about the impact of rankings on academic publishing. Their argument is that the current emphasis on rankings pushes academicians to privilege publication to science. They want to decouple funding, tenure and promotion from any evaluation metric. Rather, scientist should be carefully selected at their initial appointment and then be given guaranteed funding and only be asked to evaluate themselves. This strikes as a very utopian view of academia, and in particular a view that surprisingly ignores the impact of incentives on motivation. While the Frey and Osterloh utopia may yield in a few cases the expected very innovative researchers willing to take substantial risks along new paths, most would free-ride to a large degree. The best example of this is the French system of "research associates" on the national research foundation, who are appointed right after their doctorate for a lifetime position of researcher with no other significant duties. While this system has yielded some success stories, the research impact of these associates is rather dismal compared to researchers elsewhere who are subject to regular evaluations using publication metrics.

Reading through the paper, I could not resist to see the irony in many of the arguments, where Frey could be really writing about himself. A few quotes:

In academia, examples can be found (e.g. the ‘slicing strategy’) whereby scholars divide their research results into a ‘least publishable unit’ by breaking the results into as many papers as possible in order to enlarge their publication list.

Of course, Bruno Frey and his students are big specialists in slicing.

there is evidence showing that academics with the highest score in publication rankings score only modestly in a ranking based on their contributions in editorial boards (Rost and Frey, 2011).

Note that Frey was kicked off an editorial board for resubmitting a published paper elsewhere.

For example, a broad and international selection of reviewing peers is necessary in order to avoid cronyism.

Frey's colleague Ernst Fehr recently anointed one of his students with the most prestigious prize for an European economists. Frey and Osterloh argue that awards cannot be manipulated, while citations metrics can. I do not think this is true, in fact awards are easier to manipulate because they are determined by small committees. Citations come from the whole research community.

Another example is editors who encourage authors to cite their respective journals in order to raise their impact rankings

Frey requires this for acceptance in the journal he co-edits, Kyklos. At least, the paper does not mention self-plagiarism this time.

Is this paper a mea culpa? It certainly does not read that way. As in his previous writings on the publishing game, he comes across as someone about it all, who tell everyone how things should be while claiming the moral high ground. The paper was completed on August 24, 2011, thus well after all the conflagration about the hypocrisy of Bruno Frey, yet it does not show anything about it. Bruno Frey has not learned a thing. And, do you want to bet that he is submitting this to journal, taking away space that young researchers need to get publications for tenure, as he has argued before? In fact this particular paper would fit much as a blog post than into a journal.

Addendum: And they are doubling up with another paper, entitled "Input Control and Random Choice - Improving the Selection Process for Journal Articles" with the following abstract:

The process by which scholarly papers are selected for publication in a journal is faced with serious problems. The referees rarely agree and often are biased. This paper discusses two alternative measures to evaluate scholars. The first alternative suggests input control. The second one proposes that the referees should decide only whether a paper reaches a minimal level of quality. Within the resulting set, each paper should be chosen randomly. This procedure has advantages but also disadvantages. The more weight that is given to input control and random mechanism, the more likely it is that unconventional and innovative articles are published.

You read it right: instead of peer review, they advocate complete tyranny by editors who randomize over a select set or, alternatively, to decide early who is worthy publishing and then let the chosen few do as they wish. Which is how Bruno Frey and his lackeys have been operating. But at least Frey and Osterloh have had the decency to withdraw that last paper (which is why I print the abstract above).

Progesa: a success story thanks to academics

I have written a few times about the frustration when policy makers ignore the advice of economists. Yet, there are a few cases where economists were given free reign over the design of policy interventions, which not only allowed to obtain positive outcomes but also useful information for further study.

Nora Lustig reports about Progresa, the Mexican cash transfers program designed to elicit parents to send their kids to school and make sure necessary health check-ups were attended. From the start, the program was designed and administrated by people with an academic background. Progresa has worked remarkably well, to the point that it was not only not scrapped, as is usual, with presidential changes, its coverage also kept increasing. The only setback was a name change to Oportunidades. The critical ingredient to this success was the scholarly involvement, that not only designed it for success, but also provided the tools to measure this. And along with that a wealth of data that has allowed to understand even better what makes good intervention in practice.

The Bruno Frey Bubble

About four months ago, I reported about the apparent self-plagiarism by Bruno Frey, David Savage and Benno Torgler. I found the case particularly ironic, as Bruno Frey repeatedly wrote about the fact that the pressure to publish to get tenure can lead to scholar to unethical behavior, and about the lack of space in journals for young scholars to publish the articles needed for tenure.



The case has taken a much larger dimension now, as many more cases of self-plagiarism by Bruno Frey and his students have appeared (see many links in the comments on the post mentioned above). This raises two very important questions: 1) how could such a culture of self-plagiarism arise? 2) How could they get away with it for so long?



To answer the first question, I think we need to put Bruno Frey is the context of the German(-speaking) academic environment. At least in Economics and Business, the typical German professor publishes a lot of rather insignificant articles, in particular book chapters and "Festschrifts." These works are rarely original, and are not expected to be so. There is also a tradition of writing "educational" pieces that explain economic concepts, say the Edgeworth box or voluntary export restraints, for journals targeted towards professionals in industry and government (as well as students). Again, there is nothing original in there, except maybe the way something is explained.



Bruno Frey works within this paradigm. His work lacks creativity in the sense that he recycles a lot of his ideas for multiple publications, often copying extensively his own words. The differences is that he does that at a higher level than his German colleagues, in international journals that are actually read. And many of his original papers are in fact not that original it appears. If we take the Titanic paper as an example, the empirical exercise he performs is routinely done in undergraduate statistics classes with the same dataset. His contribution is pedagogical, he found a good and interesting way to explain something already present in the body of knowledge.



Like a bubble that keeps getting fed by self-fulfilling expectations, Bruno Frey built on his initial success and continued with this strategy and encouraged his students to do the same. And several of them have assembled remarkable portfolios that way. I mentioned that of Benno Torgler in my original post, but there are several others who got into positions that seem beyond the usual reach of a Swiss doctoral program.



There is another way in which this resembles a bubble. The Economics department at the University of Zurich has made considerable efforts over the past decade or so to become a program that can compete with the better departments in the world. It is certainly among the best in Europe. It did so by americanizing itself: dropping to a large extend the rigid chair structure so prevalent in German speaking universities, hiring internationally respect scholars and creating a proper PhD program with courses and exams. Bruno Frey has not followed this trend at all. In fact, he insisted on exempting his students from the course and exam requirements. The Frey group lives in a cocoon apart from the rest of the department, and lives entirely following the role model of Bruno Frey. Call this living in a bubble.



Or a cult. The interaction of Bruno Frey and his students is reminiscent of a prophet and his disciples who follow him everywhere and write down every word he utters. Well, I exaggerate somewhat, but this does definitely not look like a standard interaction between a mentor and his students. It looks like they follow him blindly, and with his everlasting confidence, he makes them follow his example in publishing.



But this bubble is now popping under the assault of widespread scrutiny from editors, the Economics community and an internal investigation at the University of Zurich. The second question of course is how it was possible for Bruno Frey to act so unethically for so long (he is 70). It appears that he has been caught in the past, but it never became public, or at least explicitly. For example, he has been booted out of an editorial board, but there was no mention of why, his name just disappeared from the list. Also, the journals he has been publishing in are often not prominent and thus not that well read. In fact, it looks like he targeted them so that the audience would not overlap, including editors and referees (the added bonus of this strategy that it satisfies the goal of increasing the pedagogical reach by reaching very different audiences).



Hiding this unethical may have been helped by the fact that Bruno Frey actually tried to present himself as an expert on publishing ethics in Economics. He has written about the perils of publication pressure and how this can lead to slicing papers into insignificant bits, to self-plagiarizing and other unethical behavior. He has complained loudly about the ranking craze which he has been so adept to exploit, both with his self-plagiarism and by requiring authors to cite other works in Kyklos to increase its impact factor. While he is certainly not the only editor to do so, it is ironic that he openly campaigned against such practices. Bruno Frey abused the moral high ground in which he pictured himself.



But as every lie that grows too big over time, this is unsustainable. And it will be less likely to happen in the future with initiatives like this one. Making this unethical behavior more visible will prevent it.



That said, self-plagiarism is not limited to the Bruno Frey group or German speaking economists. I will discuss soon another case that I find particularly enraging.

Do we need awards in Economics?

I do not like awards. They always create jealousies, and one cannot help that whenever a committee is involved, something may not have gone right. I am thus quite happy that economists give very few awards. It makes their CVs look bad compared to other scientists, but that is the price for a relative peace in the profession.



But we still have some prizes. The Nobel one, which is not really part of the Nobel family but is still attributed much prestige is always under much scrutiny. And in the end, the right people tend to win it. There have been a few controversial cases, Myrdal, Hayek, Buchanan and Ostrom come to mind as example where quite a few eyebrows were raised, but overall this award works well.



The American Economic Association gives an award that is considered to be even more difficult to get than the Nobel Prize: the Clark Medal, given to an American aged under 40. It is difficult to get because only one is awarded every year (no joint winners) and until recently it was given every second year. When comparing to the Nobel Prize, it is relevant to understand that American get a vast majority of them.



Now let us have a look at the past few year for the Clark award:

2011: Jonathan Levin, PhD MIT, Faculty at Stanford

2010: Esther Duflo, PhD MIT, Faculty at MIT

2009: Emmanuel Saez, PhD MIT, Faculty Harvard then Berkeley

2007: Susan Athey, PhD Stanford, Faculty at MIT then Stanford and Harvard

2005: Daron Acemoglu, PhD LSE, Faculty at MIT

2003: Steven Levitt, PhD MIT, Fellow at Harvard then faculty at Chicago

2001: Matthew Rabin, PhD MIT, Faculty at Berkeley

1999: Andrei Shleifer, PhD MIT, Faculty at Princeton, Chicago and Harvard



Do you see a pattern? Well I do, and others have, too. I am not saying these awardees are not bright and promising economists, but is there really no other qualifying economists that could have received it? Of course, John List comes to mind, who has no connection with MIT (or Harvard). But it actually worse than that. The award is given by a small committee, designated by the AEA. The AEA leadership is stacked with people with MIT and Harvard connections, so they also nominate their friends to the various committees, and you see the result.



It is even worse. In 2010, Ester Duflo was considered to be in the pool of strong candidates for the award. Guess who was on the awarding committee? Abhijit Banerjee, her PhD advisor, frequent co-author and colleague at MIT. In such a situation, an ethical person would decline the invitation to serve on the committee. That does not seem to have crossed the mind of Banerjee, who may be used to this cronyism.



There is another award, this time given by the European Economic Association: the Yrjö Jahnsson Award, to an European economist under age 45. It is given every two years, but can have several recipients. This awards has looked much cleaner because the committees and awardees have been distributed all over Europe. Europeans are indeed very sensitive to this. The last one was a shocker, though. Armin Falk won it to the surprise of many. And guess who chaired the awarding committee? His advisor, Ernst Fehr. Again, ethics would have indicated that if Falk had a chance of winning it, Fehr should have recused himself not just from chairing the committee, but from participating in it. In retrospect, this is not Fehr's first wrongdoing: two years earlier he was also on the committee when Fabrizio Zilibotti co-won the award. Zilibotti is a colleague of Fehr in Zurich.



I think we should do away with these two awards. It simply does not work.