Are consulting and research substitues or complements?

Think tanks have a horrible reputation everywhere by in the media. The reputation is because they are often very biased and sell out to their finders. The media is because think tank staff are willing to provide the expected sound bites to journalists, no matter what the topic. All this would be OK if think tanks were good at conducting independent research. It turns out the most prominent ones, do not do much of it on the hot topics they talk about, according to Dan Farber, who finds that they do not publish much of relevance (and this is not even considering peer reviewed research).

Interestingly, the picture is very different with respect to consulting. Looking at academics across all fields from five Spanish universities, Pablo D'Este, Francesco Rentocchini, Liney Manjarrés-Henrìquez and Rosa Grimaldi find that getting grant money is positively associated with getting consulting contracts. In other words, good researchers also get consulting gigs. And in some fields, consulting is where the financial rewards of research really lie, especially in social sciences where grants are usually relatively small.

What is up with Elsevier?

Whether you like it or not, Elsevier matters in the dissemination of research in Economics. By far the largest player in the field, it enjoys considerable market power (and a profit margin around 30% that comes with it). And even though journals are not at the frontier of research in Economics, it still matters what happens at Elsevier because it controls so many of the top field journals.

According to its web page on the global dissemination of research, Elsevier states:

We recognise that access to quality research is vital to the scientific community and beyond. For us this means providing support and the latest tools to maintain the quality and integrity of published scientific literature, achieving the widest dissemination of content, and embracing the opportunities of open access. We will continue to identify access gaps, and work towards ensuring that everyone has access to quality scientific content anytime, anywhere.

These are all nice words, but this is not all what Elsevier practices. First of all, all of the Economics content of Elsevier is gated, and academic libraries have to pay through the nose to let faculty access the content, including their own works. Even errata and retraction notices are gated. There is no open access journal in Economics, and even in other fields where it is available, the cost is prohibitive (usually US$3000, even more with color charges!), which cannot be justified in any reasonable way by hosting costs. Indeed, Elsevier spends considerable resources trying to keep potential readers away, by gating the material for the general public and making it difficult for individuals to buy subscriptions, especially for hard copies. All this management of subscriptions and filtering of web traffic would disappear with open access, making it much cheaper, not more expensive.

But this is not an issue only with Elsevier (Springer is much worse in this respect). Elsevier, with its market power is trying to kill any competition and any initiative that tries to open up the dissemination of research. For example, it was a huge backer of the Research Works Act in the US, which would have prohibited mandates that publicly funded research should be available in open-access repositories. Of course this generated a huge outcry from the scientific community (you know, the one that Elsevier claims to serve) and lead to a call for a boycott. This seems to have been successful, as Elsevier reversed its stance, thereby killing the bill.

Unfortunately, few economists seem to have participated in the boycott, which is probably why Elsevier continues to flaunt the research community with no remorse. For example, it has not updated the listings of its journals for over a year in RePEc, and still vigorously refuses to let RePEc perform citation analysis on its contents. Repeated attempts to get a reaction from Elsevier have unsuccessful from my part. My suspicion is that RePEc is threatening some of the products that Elsevier is pushing (Sciverse, Scopus), and the interest of the research community becomes second fiddle. From what hear, people are deserting the Economics desk at Elsevier, starting with its head, which makes you wonder who is in charge of "the widest dissemination of content."

To understand further what a fine business Elsevier is, here are some of my previous posts:
The evil empire strikes again
The evil empire strikes again (II)
Copyright and the lack of competition in academic publishing
Why I am boycotting Elsevier

How did online journals change the economics literature?

Scientific publication is not the same as it was, now that we can easily access the literature over the Internet. No more trips to the library, much fewer waits for interlibrary loans, and no more chasing who took or misplaced the volume in the racks. But did all this change anything in the way we publish our results?

This is what Timo Boppart and Kevin E. Staub study by looking at the diversity of topics covered in journals and how the availability of on-line publication would have changed that. The idea is that on-line publication allows to discover and read more material, and one may in particular stray away from the usual topics. No doubt about that. But I wonder why Boppart and Straub have this focus on journals. After all, working papers is where its at in Economics, and journal readership has not really increased, I believe. The treatment variable is the share of cited articles available on-line the year before publication. This seems so wrong. There is no way it takes only one year from the literature search to the print issue. Not in Economics, where I would say it is a minimum three years, with really rare cases below that. In fact, a good share of mine took more than a year from final acceptance to actual publication. Then, what about working papers? This is what people read, not articles.

The impact of recessions on economist productivity

In recessions, those who have the hardest time finding jobs are those who try for the first time. Facing these difficulties, many decide to pursue their studies in graduate school. From this, one should expect future productivity to be higher in the future, because of the higher level of human capital. But for a given level of human capital, labor productivity should be lower post-recession, because the marginal new graduate is of lower quality.

Michael Boehm and Martin Watzinger look at the performance of PhD economists and find that those who studied or graduated during a recession over-perform the others as measured by publication records. That would not surprise me for those who graduated during tough times, as only the best get jobs. Indeed, the study matches those who graduated with those who are still members of the American Economic Association. Thus, there is some selection bias. But for those who start in a recession, and thus would graduate in "normal" times, given the average length of a recession, this is more surprising. Boehm and Watzinger can justify this with the good old Roy model of reallocation of talent: in a recession, people switch to recession proof sectors, and those who can do this the most easily are those who are about to choose in which sector to work: students. As the number of graduate students slots does not change much, at least in Economics, the quality of those admitted is higher, if the admission officers do their work well. As the publication record many years later shows, they do.

Amy Finkelstein wins MIT Award

This was certainly a busy week for anyone following some of the ethics sagas in our profession. First, there was the non-renewal and temper tantrum of Bruno Frey, then there is the American Economic Association awarding the John Bates Clark Medal to Amy Finkelstein. Following my previous post on this award, this is hardly a surprise. For those keeping score, the last awards were given to:

2012: Amy Finkelstein, PhD MIT, Faculty at MIT
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

It is somewhat hard to swallow that MIT students and faculty are so much better than the rest, but one cannot discard the possibility that this could happen. What is more suspect is the composition of the committee: of the seven, three have an MIT PhD (Abel, Crawford and Hoxby), and one is faculty at MIT (Banerjee). What is the American Economic Association thinking? If you want to lend any credibility to this award, and you know who the prime candidates are, you put together a committee that does not look like it was constituted at the MIT ASSA cocktail party. It is true that in the past years, MIT PhDs were a majority on the committee, so there is progress, but the longer the streak goes, the more it looks dubious. It is especially annoying that Banerjee was put back in the committee two years after he gave the award to his colleague and lover (not a secret any more now that they have a baby).

The American Economic Association needs a serious overhaul of its committees. They are stacked with people from the same places, losing the representativity of the association. The proposed candidates for office are always coming from the same institutions, and a write-in campaigns cannot be successful. The AEA has already lost its credibility with its main award, and it needs to be very careful that its new journals do not go the same way, as they are again stacked with the usual suspects as editors. No surprise then that they have a really hard time taking off, despite all what people at the suspect institutions will tell you.

I hate quotas, but I think that in the current situation, the AEA needs to institute quotas in all its committees and editorial boards, if only to get out of a potential situation of self-fulfilling group thinking. No more than two PhDs or faculty from the same institution on the same committee or board. Have at least a "professional" economist and an economist from government or Fed on every committee. Same for non-PhD-granting colleges. Have true elections for president and vice-president with multiple candidates. And, why not, let the John Bates Clark medal be awarded by complete outsiders: academic economists not based in the US and not educated in the US (but not Ernst Fehr).

On the state of economic research blogging

If you are an economist and maintain a blog, the best way to get an audience is to get into fights with pundits and journalists, and you then easily become a pundit yourself, losing the impartiality you are supposed to have as a scientist. The most popular economist bloggers are either openly libertarian or quite far right, or in reaction resolutely on the left. Almost all engage in politicking and wars of words and have basically abandoned the principles of impartiality their scientific upbringing taught them. The impartial scientists are drowned.

EconAcademics.org tries to rectify that, aggregating blog posts that discuss research, or at least refer to research. The list of monitored blogs is impressively long, yet it saddens me to see that the "popular" blogs are nowhere to be seen near the top of those who have discussed the most research, despite their considerable volume of posts. While I could be proud to be (far) ahead on this last list, it saddens me again how little consistent discussion of research there is. Out in the blogosphere, are we really so few economists doing this? Why can't the top economics blogs relate more to the results of their field?

A positive externality of EconAcademics.org is that is compiles a list of all papers I discussed, including where the ultimately got published. I have put the link in the sidebar and will come back to discuss it sometime soon.

Bruno Frey: the epilogue?

A little less than a year ago, a controversy erupted about the publishing practices of Bruno Frey and his students. Indeed, they tend to repackage their research and submit it to multiple journals simultaneously (or sometimes successively), without cross-references and without alerting editors to this. This is in clear violation of the submission conditions of most academic journals and even goes against principles Bruno Frey has himself advocated in multiple (of course) publications: there is not enough space for everyone to publish on the one hand, and the pressure to publish leads people to (self-)plagiarize on the other hand. On his homepage, Bruno Frey crows about over 500 or 600 publications, depending on where you look, numbers that are completely surreal for any self-respecting academic economist.

The scheme blew in his face when some editors and some blogs started raising questions when very similar articles about the Titanic, with Benno Torgler and David Savage, appeared in four journals (some say there is even a fifth one in German, but I cannot verify). And the article was not even original, as a similar analysis was done and published 25 years prior and is now standard reading and exercise in statistics courses. Newspapers picked up the story, Frey went into denial but finally confessed to the editor of the Journal of Economic Perspectives, who published correspondence about the case and publicly admonished him for multiple submissions (he do not yet know about the prior literature). But that is only for this case, there are all the other ones. The University of Zurich, from where Bruno Frey recently retired, promised an investigation. That was sometime in the Summer. Since then, nothing.

One could suspect the University would do nothing, as Bruno Frey is the best ranked economist in German-speaking universities. And the prolonged silence clearly seemed to corroborate this. But rumors started circulating in the hallways, rumors that were not encouraging at all. But no evidence from Zurich.

Finally, I got good evidence from a reliable source. And it is indeed not encouraging. The University of Zurich mandated three prominent academics to look into the case. But the mandate was formulated in such a way that only the articles about the Titanic could be analyzed. The experts came to the obvious conclusion that unethical behavior was at play for this case. They could not mention the others and thus the University concluded that this was a one off miss-step. The University gave Frey a verbal admonishment, which does not go on his record, and did not release the report.

But this was not an one-off miss-step. Frey has been banned from the editorial board of Public Choice for a similar case of re-publication. He is by now banned from publishing in at least a half-dozen journals. To make matters worse, he has himself advocated to go against plagiarizers and others that unnecessarily take up valuable publication space. The investigation should have looked at his whole career, like when a scientist is suspected of fabricating data and all his publications are subject to scrutiny. And it is not like the information would be difficult to obtain, it is readily available and people have even compiled it, as documented in the FreyPlag Wiki.

For more about the case, you can read my past blog posts: 30 April 2011, 3 September 2011, 27 September 2011. Also, Olaf Storbeck's Economics Intelligence blog was the one that convinced the University of Zurich to finally (pretend to) act: 4 July 2011, 4 July 2011, 5 July 2011, 6 July 2011, 7 July 2011, 9 July 2011, 20 August 2011, 29 August 2011, 12 September 2011

Economists lie more

Economists have a bad reputation, and this does not date from the recent crisis. This comes largely from those willing to prostitute themselves for various think tanks, lobby groups or trade group, or their employer, acting like a spokesperson than a critically-thinking and independent economist. Any many of those call themselves economists without actually being one (hence my earlier call for a certification). In the end, the general public thinks we are lying, mostly. Is there any truth to this?

Raúl López-Pérez and Eli Spiegelman performed some experiments where lying could be a winning strategy. While religiosity or gender does not impact the propensity of lying, one's undergraduate major matters, and the Business and Economics students fare the worst. And this does not come from selection into the major, it is acquired. So economists do lie more, because they see incentives to do so. Hence journalists should learn to interview economists that have no incentives to lie.

Somewhat relatedly, economists are also less generous, but in that case it is not acquired, but rather stemming from selection. But in both cases, it shows economists conform more to homo oeconomicus,

Why I am boycotting Elsevier

It is not secret to regular readers that I am no friend of Elsevier. It is engaging in unethical behavior (exhibits I and II), it is abusing its near monopoly power in the diffusion of research, yielding profit margins in the order of an incredible 30%. But foremost, it is actively trying to prevent the dissemination of research by hiding articles behind expensive paywalls and lobbying for making illegal various initiatives promoting Open Access in science.

A few years ago, biologists had enough and managed to create a group of journals in Open Access that are now the most respected in the profession, and that in just a couple of years. Mathematicians seem to be the next, and they invite a signature campaign for boycotting submissions to and refereeing for Elsevier journals. The site is here, and appears to suffer from the strain of its sudden popularity. Bookmark it to sign on when it is back on. You can certainly can count me in, as I have already been following such a boycott for a few years. It is not always easy, especially when I refuse to referee for editor friends, but they are understanding.

Economics and facts

I have sometimes expressed here my frustration over the disconnection between research and reality. The scientific process is about trying to explain some data. Any paper that just tries to see what could result from a model without looking at data or restrict parameter value in any way is useless. What do we learn if a model tells us anything could happen with some parameter values, but the authors are not capable of telling us in which range those parameter values lie? And what use is a model that is not, or worse cannot, be tested in any way?

Harald Uhlig opines on the relationship of Economics and reality from four different angles. The first is Economics as a science, where he has largely the same arguments as me above. Economics is also an art, as it is vain to find a great unified theory of Economics, as life is too complicated. One can only hope to explain observations in batches, and then the most elegant theory wins. But that theory still has to be tested against data, at least for the observations at hand.

Economics is also rhetoric. Indeed, convincing others is a big part of the success of a theory, and how that theory does with explaining the data is unfortunately not always central. This competition of ideas also spills over into politics, as Economics is in the end about giving policy advice. And this is where data and empirical relevance becomes the least important.

Uhlig then goes on to relate this to various aspects of macroeconomics. While there is much introspection in macroeconomics these days, I wish he would have defined Economics to be broader than that. Some areas of Economics need indeed to be much more closely related to data and trying to explain empirical observations. Game theory would be a prime example. public economic theory as well, if not much of microeconomic theory. Mainstream macroeconomic theory has always tried to relate to data, which is probably why it has changed over the decades: some crucial facts have changed.

On advances in econometric orthography

Economists use jargon, and the origin of that jargon is sometimes nebulous. Most of the time, we borrow existing words and twist their meaning. But also create new words, especially in econometrics where new acronyms keep popping up and are used as words. And in some cases, words change.

Alfredo Paloyo takes the case of "heteroskedasticity" or "heteroscedasticity" and its varying orthography over time. I am myself confused about which is the right way to write it and have been inconsistent in the past. My confusion appears justified: spelling this word goes through fads, as documented by parsing through the Google book library. The second spelling was most popular until 2001, and the second is mostly preferred since. What is puzzling is that "homoscedasticity" dominates by a wide and persistent margin "homoskedasticity," indicating that authors are rather inconsistent in their spelling. For adjectives, "c" dominates "k" widely as well. What is then so special about "heteroskedasticity?" Paloyo mentions the impact of a few influential papers using that spelling. But that does not explain the inconsistencies.

QJE-Applied

The American Economic Association launched three years ago the four American Economic Journals, juniors to the American Economic Review. For a journal, three years is a short time, but I still want to assess where they stand for now. From the get-go, let me express again my disappointment that the AEA did not make them open access, the finance would certainly have allowed it, and there was no real need to have print copies. In fact, issues were lying around the department like junk mail that no one bothers to throw away. That was a rather bad omen for the new journals. How has each fared since.

American Economic Journal: Macroeconomics had a horrible start. Editors struggled to fill the first issues as submissions were severely lacking. I suspect this had to do with some very poor choices for the editorial team, to a large extend the usual AEA insiders. A change of editor after a year and some serious recruiting efforts changed all that, and AEJ-Macro is now a success story and the flagship of the AEJs, with impressive impact factors for such a young journal.

American Economic Journal: Microeconomics is rather unremarkable. The market for a new micro journal was thin to begin with. Arguably, the AEA wants to recapture the market share lost to commercial publishers, but with Theoretical Economics launched shortly before (in open access), it was difficult to rally economic theoreticians for this new cause. Unless people finally get fed up with the commercial publishers, AEJ-Micro will remain unnoticed.

American Economic Journal: Economic Policy fares better, but only little. I think it suffers from the fact the most economic research has policy implications, so it is difficult which papers should go there rather than elsewhere. And there are plenty of field journals that attract the top papers in their field. If, say, a health economics paper does not make it in the AER, the author will always prefer sending it to the Journal of Health Economics.

American Economic Journal: Applied Economics is the most worrisome. It has essentially been hijacked for the research agenda of the editor, and for the rest it looks like a junior partner not to the AER, but to the Quarterly Journal of Economics, even with the same mafia mentality (and hence the title of this post). I am surprised that the Association has not yet started rectifying the situation, but then again it is run by people close to the editorial team. I am afraid that this journal, despite being so young, is already the epitome of club mentality in publishing.

In summary, an unexpected success, two non-remarkable journals and a basket case. Not a promising start.

Are economists not humble enough?

The Economics profession has been targeted on various fronts lately: one is for a lack of a code of ethics, as exposed by the documentary Inside Job, and another has been the lack of forecasting or warning about the current crisis. With respect to the first, the American Economic Association has convened a committee to create a code of ethics, although unfortunately with a rather narrow mandate. Regarding the second, I believe the accusations are overblown, in part because economists have warned about excessive house prices, because bubbles are by definition unobservable, and because the principal accused, modern macroeconomics, has addressed before the crisis many of the aspects it is being accused of missing. This latter point has mainly been put forward by some economists who have a rather antiquated knowledge of the field, as occasionally addressed here.

One of them is David Colander, who has an admirable art of getting into all the right committees at the AEA. This time, it is the Ethics Committee. In his latest paper, he argues that he is not too worried about the funding of economic research and the lack of disclosures. He is rather bothered by the fact that economists do not have the humility to declare how fragile their results may be. They should be more forthcoming about the risk of error, much as engineers do as they care a lot about failure.

I can see where Colander is coming from, but I do not think this is the fault of the economists, but rather of the public consuming economic research. From personal experience, nobody cares about alternative scenarios. Well many editors do, but people in the industry do not. All they want is a precise number to run with. And even if you include standard errors and such, all that is reported is the median. I am guilty of this on this blog as well, it would take too much time and space to report this for every paper, and it distract from the main message. Only when I think the authors have abused the simplification or neglected possible scenarios do I discuss this, and this does not happen too often. And I think it is very symptomatic how Thomas Sargent and Christopher Sims have recently been ridiculed in the press for refusing to provide instant answers to difficult questions. In short, I think the problem has less to do with the economists than with the readership.

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.