An ethics code for economists

Richard, a loyal MR reader, asks:

What are your thoughts on the recent proposal to implement an ethics code for economists? Do you see this having any effect on the general field/body of work being published in the near future? Will the general public find that these ethical guidelines afford them a more scrutinized body of work (i.e. Will they trust the profession more? Will this help to serve as a bulwark against negative views of the profession?)

Annie Lowrey offers background.

I favor such codes, but I'm not sure they will help much.  First, most economic research doesn't matter in the first place.  Second, the research which does matter very often is distorted anyway.  It is pulled out of context, exaggerated, presented by intermediaries and political entrepreneurs without qualification, and so on.  That's the real problem.  In this context I'm not sure that a conflict of interest statement is going to push people closer toward truth; the process wasn't accurate or finely honed in the first place.  What is published is already so much more scientific than the policy process itself.  Improving the former inputs with an ethics code seems like pushing on the less important lever and to some extent it is a very weak substitute for the almost complete lack of an ethics code in politics itself.  Third, a lot of the problem is economists in government –advising – rather than what is published in economics journals. 

Newspapers already have conflict of interest policies for many (or all) of their writers, but I don't see they are much enforced or have much improved the quality of most Op-Ed pages as policy advice.

Ideally, the employing university should enforce such policies, but of course individual universities do not have much incentive to "move first" on such issues.  Furthermore, universities are notoriously selective in their enforcement of other rules, such as limitations on how much time a professor can spend consulting.

If you take the cases presented in the movie Inside Job (which by the way is half very good and half terrible), a code of ethics would have changed individual behavior but it is very unlikely that it would have improved economic policy in the United States.

The biggest potential gain is simply keeping or extending the public's trust in the economics profession.  In other words, the biggest potential gain is fairly small.

Is there any downside from trying to raise ethical standards and transparency in research?  One problem is that "all-government funded" probably will be seen as high status, when I am not sure it should be.  Explicit political bias is not my main concern, rather this funding source encourages false precision and an excess of technocracy.  Another issue is how disclosure might interact with anonymous donations to universities.  Either anonymous donations become more costly or impossible, which makes universities poorer, or they become a means of circumventing the transparency. 

I don't have easy answers there, but I wouldn't conclude that we should give up trying on matters of professional ethics.  It still seems to me that some individuals are creating a negative externality for the economics profession as a whole.  Simply doing the right thing, even when you can't see what immediate gains it will bring is often…the right thing to do.