On the relationship between academic economics and public policy
In a recent working paper, ELIZABETH POPP BERMAN discusses the interconnected fields of academic economics and public policy. The paper conceptualizes the translation of certain academic ideas into public policy, clarifying the relation by describing different economic theories as having certain “affordances”:
"I borrow the concept of affordances, which has been used widely to describe how particular technologies proved the potential for some kinds of action but not others. I suggest that knowledge, like technologies, may afford some possibilities but not others. In particular, some theories produce knowledge that, simply because of the kind of knowledge it is, is useful and usable for particular actors in the policy field, while others, regardless of their truth or the accuracy with which they describe the world, do not.”
The paper also examines the gap between academic theory and policy application and includes takeaways for those interested in the role of academic experts in the process of policy creation:
"It is important to recognize the relative autonomy of the academic field from the policy field. While outside groups may support one school of thought or another, the development of academic disciplines is not determined solely by who has the most money, but also by stakes—including intellectual stakes—specific to the academic field. Similarly, while the academic and policy fields may be linked in ways that facilitate the transmission of people and ideas, the academic dominance of a particular approach does not translate to policy dominance, even given influential champions.”
- This work builds off a 2014 paper Berman co-authored with David Hirschman, which also explores the degree to which economists, their tools and ideas, influence and create policy. Similar to the concept of “affordances”, Berman and Hirschman argue that “economic style can shape how policymakers approach problems, even if they ignore the specific recommendations of trained economists.” Link.
- A 2010 paper offers a new framework for properly assessing research impact, which includes quantifying conventional citation data as well as other qualitative outputs. Link.
Branko Milanovic with a speculative paper on globalization from the turn of the millennium
Back in 1999, economist Branko Milanovic wrote a ("several times rejected") paper proposing three periods of globalization—the third being the present one—and the countervailing ideologies that sprang up to contest the first two. From the paper:
“We are currently standing at the threshold of the Third Globalization. the Roman-led one of the 2nd-4th century, the British-led one of the 19th century, and the current one led by the United States. Each of them not only had a hegemon country but was associated with a specific ideology. However, in reaction to the dominant ideology and the effects of globalization (cultural domination, increasing awareness of economic inequities) an alternative ideology (in the first case, Christianity, in the second, Communism) sprang up. The alternative ideology uses the technological means supplied by the globalizers to subvert or attack the dominant ideological paradigm."
Read the full paper here.
- For more Milanovic on the politics of globalization, slides from a recent presentation of his on global inequality and its political consequences features much of relevance to this vintage paper. Some of its broader questions: "Does global equality of opportunity matter? Is 'citizenship rent' morally acceptable? What is the 'optimal' global income distribution? Can something 'good' (global middle class) be the result of something 'bad' (shrinking of national middle classes and rising income inequality)? Are we back to Mandeville?" Link.
- Matt Bruenig has published a proposal for a Social Wealth Fund. (More to come on this in next week's newsletter.) Link.
- The Ontario government cancelled its basic income pilot. Now a class action lawsuit is being filed. Link. h/t Lauren For an interesting deep-dive into the Ontario pilot design and public feedback, see these notes from 14 public discussions around the province in 2016-2017. Link. ht Will
- From National Geographic, a story about an oft-forgotten climate change accelerant, melting permafrost. "Permafrost collapse can begin feeding on itself, releasing more greenhouse gases, which fuel more warming." Link.
- From VoxEU: "What is the effect of firms’ beliefs on their decisions and performance? Firms’ input decisions and subsequent profit and productivity are found to react strongly to expectations of macroeconomic conditions, while significant heterogeneity in forecast accuracy across firms appears to be related to observable characteristics such as productivity, size, age, and governance structure. The results highlight a key role of firms’ forecasting ability for micro and macro performance." Link.
- More from Frank Pasquale, this time on facial recognition software, in Communications of the Association for Computing Machinery. Link.
- A post at AEIR discusses a recent "Central Banking For All" proposal, and raises Canada's 99% banking penetration rate as a case worth examining when thinking through addressing underbanked communities in the US. Link.
- "This research follows the £20 million paid in compensation by the British government in 1834 to former slave-owners for the loss of their human property. It shows that slave-owners in places such as Jamaica, Guyana, South Africa and Mauritius used the money they received not just to pay off their debts, but also to set up new banks, which created credit by issuing bank notes and then supplied the planters with cash and credit. By investing their slavery compensation money in banks that then offered cash and credit, the planters could prolong and even expand their place in economies and societies built on the plantation system and the exploitation of black labor." Link.
- Corey Robin wrote a Times op-ed on "The New Socialists" (Sanders, Ocasio-Cortez, Salazar, and the current movement's ideology). Brad DeLong posted a takedown: Link. In his rebuttal, DeLong suggests a “vastly, vastly superior” 2012 Crooked Timber post by Cosma Shalizi for a more complex discussion of markets and domination. That sprawling piece tackles Red Plenty, linear programming, industrial planning, and the political conflict approached in Robin’s op-ed: “Human beings confront all the structures which emerge from our massed interactions in this way. A bureaucracy, or even a thoroughly democratic polity of which one is a citizen, can feel, can be, just as much of a cold monster as the market.” Link to the Crooked Timber post. (Also: see Paul Krugman’s defense of Robin’s piece here.)
- A Shelterforce post co-authored by several people from community-based tenants groups like the Anti-Eviction Mapping Project critiques Matthew Desmond's Eviction Lab, arguing the project failed to meaningfully engage with community groups whose data it was collecting. This resulted in, they allege, an undercounting of eviction rates in California. The post raises a number of important questions for conducting large-scale social research of this kind. Link. ht Will
- Timothy Taylor with a post on summer vacation: "Why did summer vacation arise as a standard pattern during the second half of the 19th century, when it had not been common in either rural or urban areas before that?" Link.