I haven’t kept track of exactly how many National Bureau of Economic Research “working papers” I’ve read since I started writing How the World Works — a dozen or two, I’d guess. But I didn’t realize until today that NBER specifically forbids its authors from making “explicit policy recommendations.” That nugget comes from Richard Baldwin, a professor of international economics at the Graduate Institute in Geneva in an essay commemorating the fifth anniversary of the founding of the Italian economic policy watchdog LaVoce. (Thanks to Trade Diversion for the link.)
Baldwin mentions the NBER policy in the context of outlining a shift in how today’s economists connect their work to the “real world.” The short version: they don’t, or at least, not as much as they used to.
In “Economic policy and the New Century public discourse,” he writes:
In the 1980s, brilliant young economists like Paul Krugman, Larry Summers, Jeff Sachs and Joe Stiglitz felt obliged to write Brookings or Economic Policy articles, to sit on government panels, to write policy reports, and to send Op-Ed pieces to the Financial Times. At the time, it was part of the definition of a being a leading scholar. It helped you get tenure at Harvard. It also bridged the gap between cutting-edge research and the public debate on trade policy, exchange rates, current account dynamics, etc.
Today’s brilliant young economists are much less interested in participating in the public debate in these ways. I have no empirical evidence to back up this opinion, but I think it is shared by many economists involved in economic policy issues and I had first-hand experience of it during my five years as a Managing Editor of Economic Policy. Young people need publications in good anonymously-reviewed journals; everything else is a luxury.
And in those good journals, adding a section on policy recommendations or implications is unlikely to improve one’s chances of getting published, if it isn’t actively discouraged. The state of affairs, argues Baldwin, is a shame. In his view, economists have never had more to offer the world, but they have fewer and fewer opportunities to midwife their knowledge into practical application.
With one major exception, which Baldwin grudgingly concedes. The Internet. Economists have taken to the Internet , and in particular, the blogosphere, with a vigor unmatched by any other social science discipline.
On the bright side, the Internet has two features that make it an excellent vehicle for bridging the research-reality gap. Feature No.1: its technology makes publishing very cheap. Feature No.2: its global span makes it possible to find an audience that is both large and homogeneous in terms of background knowledge. On the dark side, these two features have produced a cacophony. Bloggers — embracing Feature No.1 and hoping for Feature No.2 — have set up a shocking number of sites. A bewildering mixture of insight and nonsense is spread over literally thousands of sites (technorati.com lists 1,745 blogs about economics with 281,823 posts). One can spend some pleasant hours browsing the various blogs — and even learn a lot from the big blogs, like “Economist’s View,” “New Economist,” “Marginal Revolution”, and the sites of Brad DeLong, Greg Mankiw, and Nouriel Roubini. But this is not the profession’s response to the Discussion Sections of medical journals. It is more like the collegial coffee-room discussions we used to have when there was time for such things.
I must disagree with Professor Baldwin. The econo-blogosphere is more than a collegial coffee-room discussion. It’s closer to an internationally-distributed graduate seminar, in which the lucky students get to watch — and participate in — a round-robin debate featuring scores of professors duking it out. It is also an early-warning system for new academic papers of note and an instant provider of context and analysis for each new blip of economic data. It is, to put it most simply, an education.
Does that mean it has an impact on policy? That’s where it gets tricky. Politics, especially as practiced in the United States, appears to care little for the consensus opinion of economists, especially when that runs counter to polling data and focus group results. But maybe it’s just too early in the history of the Internet to make a definitive call. We need more data.