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Should economists rule the world?
Here is Anil Hira:
This article examines more carefully the oft-made hypotheses that (1) "technocrats" or politicians with an economics background are increasingly common and (2) that this "improvement" in qualifications will lead to improvements in economic policy. The article presents a database on the qualifications of leaders of the world's major countries over the past four decades. The article finds that while there is evidence for increasing "technification," there are also distinct and persistent historical patterns among Asian, African, Middle Eastern, and Latin American leaders. Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes.
Here is the (only temporarily non-gated) link, thanks to Bill Evers for the pointer. There is also an article in the Chronicle of Higher Education on this work, I am told. The natural defense of economists, which I will not attempt, is to cite selection effects for which economists achieve public office, and what they must do to rule.
I am happy to admit that governing is most of all about building viable coalitions (more than having good policy knowledge, at many margins), and that we economists are not especially good at that. So I don't find this result a surprise.
Posted by Tyler Cowen on September 4, 2007 at 07:24 PM in Political Science | Permalink
Comments
When I read about studies like this, I wonder if there are enough observations to make a statistically meaningful statement about whether there is any correlation between a technocratic leadership and better economic outcomes. I suspect that the sample size is really small.
Posted by: RWB at Sep 4, 2007 8:24:41 PM
I know this is all probably tongue-in-cheek, but I still think it's highly presumptuous to go on about how economists are the gift of god.
Firstly, that's what advisors are for. I doubt any semi-intelligent politician would ever have made policy decisions without consulting someone who knows a thing or two about the economy.
Secondly, it's not like there is consensus in the field, anyways. I somehow doubt, say, economist conferences result in massive consensus decisions. Not to mention that economists would probably be as unqualified for making decisions in every other field a politician has to meddle in. An economist for Finance minister? Sure, why not. There just are many other positions you also gotta be qualified for.
Of course it'd awesome if politicians followed exactly what *I* happen to think is sound policy this week, too :P.
Posted by: Phill at Sep 4, 2007 8:31:22 PM
A more important question is, would society be better off if everyone were an economist? Or, if the intelligence of the population matched the distribution of intelligences of economists? Should we incentivize the reproduction of economists?
Posted by: Paul N at Sep 4, 2007 8:42:17 PM
Yes, governing is about maintaining coalitions, but we have to remember that we can influence the way such coalition-building is structured. Although we cannot directly tell rulers how and with whom they should form a coalition (and produce good economic policy), the best we can do is broadcast good policy to the electorate.
Posted by: Sandeep Prakash at Sep 4, 2007 8:49:54 PM
I agree with RWB: these types of study does not have enough data to back up the conclusion. Antoher study that got a lot of attention is the one about unpaid parking tickets by diplomats and corruption index of their country of origin. The authors did the study as a fun project but got more attention than their serious academic work. In these cases, a case study method is a better methodology. Take the case of India. In 1991 the main policy makers were economist (Manmohan Singh, Aliwala (sp?)and they were (three to four)were responsible for getting India out of license raj to openness and the rest is history. Many of the technocrats in Indonesia under Suharto were econ Ph.d from Berkely and engineering graduate from Germany. And one should not forget Cordoso in Brazil.
Posted by: Asif Dowla at Sep 4, 2007 10:04:23 PM
government would be quite awkward with economists and libertarians in charge. very nerdy and cold.
Posted by: thehova at Sep 4, 2007 10:06:05 PM
I can't tell this by the abstract, but I'm curious as to what the unit of analysis is. Is it cabinet members? Presidents? Aides? Legislators? Are these weighted differently whether the state is democratically plural or autocratic? After all, having a president with an economics degree matters little when the legislature is stocked with non-economists, and legislating by decree is anathema to democratic rule. Also, does it matter that economic policy choices are burdened by distributive domestic conflicts and, that somehow politicians with Econ Ph.Ds are either insensitive to these concerns or discount political survival to pursue economic orthodoxy?
Posted by: Marshall at Sep 4, 2007 11:13:58 PM
If you want to read good work in this general area, try Fourcade and Babb (2002) The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries (AJS 108:533–579). Or Fourcade (2006) The Construction of a Global Profession: The Transnationalization of Economics, (AJS 112:145–194).
Posted by: Kieran at Sep 4, 2007 11:21:43 PM
Why does this author choose lower inequality as a measure of better economic outcome (using GINI coefficients).
Posted by: kurt at Sep 4, 2007 11:55:33 PM
Mexico presents a good case study. Under Carlos Salinas (1988-94), himself an economist, the country had perhaps the most economically literate cabinet in the world (some ministers had PhD's from top American universities).
While some good policies were undertaken (NAFTA, some instances of deregulation), many others had terrible consequences even though they superficially made good economic sense.
For instance, privatization was handled terribly (turning Telmex from an inefficient state monopoly to an obscenely profitable and unregulated private monopoly, selling banks to inexperienced and crooked owners), at enormous cost.
Even macroeconomic policy was handled badly, leading to the dreadful 1994 peso crisis.
The lessons? Well, for one, implementation matters and I doubt many economists are good at it, blinded as many are by purely theoretical considerations and little hands-on experience. But a deeper failing lies in their priorities. While they often address textbook issues (free trade=good, inflation=bad), they tend to neglect the basic, institutional, preconditions for having a prosperous market economy, such as decent educational and judicial systems. I would also add that most economically-oriented governments, at least in Latin America, have not been friends of democracy or personal liberty.
Posted by: Andres V at Sep 5, 2007 1:11:58 AM
Democracy isn't an institution capable of making good nuanced decisions. I don't think thats ever going to change, and I don't think we'll ever get sound economic policy out of an unlimited democracy. The economy seems like its getting more complex faster than people's economic knowledge is increasing.
Besides, the question is not "who should be in charge?", but "what is the best system to select who should be in charge?". I believe the answer is: Markets.
Posted by: G at Sep 5, 2007 1:57:42 AM
William F. Buckley, once said he "would rather live in a society governed by the first 2,000 names in the Boston phone directory than in one governed by the 2,000 members of the Harvard faculty." It was a distrust of rule by academics that I think has been shown to be well founded. Kennedy's best and brightest to our recent experience with Neo-cons running foreign policy have shown how dangerous theory without experience can be. As for economic expertize, we have only to look at how well Russian privatization worked following expert advice.
Posted by: joan at Sep 5, 2007 4:53:44 AM
This paper
http://www.amandagoodall.com/JDocAGversionMay06.pdf
suggests that - whatever may hold for nations - top research universities tend to be led by top scholars, as measured by citations.
Posted by: Bruce G Charlton at Sep 5, 2007 6:21:12 AM
Worth noting that Robert Mugabe has a Masters in economics from my alma mater (University of London...and the external degre program in economics is run by the London School of Economics, so it's not a patsy degree he's got).
So we've at least one data point that says rule by economists isn't a very good idea.
Posted by: Tim Worstall at Sep 5, 2007 7:22:18 AM
Tyranny of the majority
Tyranny of the philosophers (plato)
Tyranny of the Economists
Tyranny of a ruling class
Who care? The difference is nil. Somebody believes they can run your life better than you can.
Posted by: Jacob at Sep 5, 2007 9:22:27 AM
Robert Mugabe has an MA in economics. Nuff said.
Posted by: Alex Tabarrok at Sep 5, 2007 9:23:17 AM
"Robert Mugabe has a Masters in economics from my alma mater (University of London)"
Who knows, maybe in the pre-Thatcher days, Mugabe was taught that wage/price controls are a good idea.
Perhaps if Mugabe went to Chicago, it would be another story...
Posted by: Mr. Econotarian at Sep 5, 2007 11:04:13 AM
The leadership of the Khmer Rouge was also pretty top-heavy with economists, for what that's worth.
Posted by: mobile at Sep 5, 2007 11:47:59 AM
China is run by engineers. As of 2005 anyway, "all 9 members of the Chinese Politburo have an engineering background".
Posted by: at Sep 5, 2007 12:08:32 PM
Mobile,
Well, let's be serious. Communist "economists" are akin to witch-doctors.
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