July 2019 newsletter: Do economists deserve better? - A debate on incentives and rewards in our discipline

16 Jul 2019

At the 2019 annual conference, the Institute for New Economic Thinking (INET) was invited to organize a special session, in which the authors of this piece participated as discussants.  Orsola Costantini and Giuseppe Fontana1 report.

It was at the end of a first, exciting day of conference. But, in the room, the mood was gloomy. Many young faces looked tense and resigned: we were talking about the state of Economics.

According to INET president Robert Johnson, who chaired the session, the pain is necessary. Economics has repeatedly shown itself unfit to deal with our complex times and people now doubt the integrity and legitimacy of our role as experts in the economic and political systems.

At this difficult juncture, maintained Johnson, it is essential that economics drop the fantasy idea of a perfect meritocracy, and deal with our profession as ‘a community with an anthropology’ with a structure of incentives and limitations. Only then can we understand why, in spite of widespread calls for a reality check in both theory and policy prescriptions, the discipline has remained largely stuck on old methods and hierarchies of excellence. And only then can we act to do something about it.

The influence of internal structures of power is rather striking as the 2000 Nobel Memorial Prize laureate James Heckman proceeded to explain. In an INET paper written with Sidharth Moktar he shows that 5 ‘top’ economic journals disproportionately influence what is considered excellence in our field, which in turn affects hires and promotions, especially in the top universities. Inevitably, students and researchers pick their research projects bowing to the standards set by those gatekeeping outlets: after all, their careers depend on it. Unfortunately, the system of journals is not conceived for, nor is it appropriate to, evaluating the equality of research as such: at best, it pursues an editorial project, which results in publication of articles of heterogeneous quality, limited by topic, method, and theoretical approach. But it may also reward connections as much or more than quality. In the Heckman-Moktar view, the system incentivizes crass careerism and reduces creativity and bold questioning. As George Akerlof has elsewhere observed, students run away from economics, take refuge in hyper-specialization or, simply, conform.2

After Heckman, Giulia Zacchia, from the University of Rome La Sapienza, stepped up to the podium and reinforced the message: we must accept that quality is not the only characteristic that distinguishes papers. That would amount to just assuming away the existence of biases and outright discrimination against specific ideas and methodologies and against certain categories of researchers. For instance, gender and race matter hugely. Furthermore, the way repression of the pluralism of ideas and repression of the diversity of scholars interact: they penalize especially women and minorities who work outside the mainstream intersectionally (more than twice) (Zacchia 2017). But make no mistake, she warns: as tempting as it is to rely on seemingly objective procedures, in this deeply biased and stratified context, bibliometric measures are no solution and, if anything, they tend to exacerbate the distortions.

Yet, as Sanjeev Goyal, professor from the University of Cambridge, pointed out in his presentation, something is moving. Changes in size of the discipline, both in terms of the number of researchers and of publications, and in the size and number of subfields are happening and might have important consequences. The top 5 journals, for instance, are not always those that scholars most often cite. In his view, equilibria could change, moved by the strategic behavior of the authors, as he describes in a new forthcoming paper (Mimeo).

Indeed today an increasingly number of economists in the UK work in Business Schools or, for want of a better term, in non-traditional departments of economics, where they are encouraged to engage in multidisciplinary and pluralistic research. In a similar way, policy makers and research granting institutions advocate a more realistic approach to economics to serve better the needs of modern societies. But this evolution happens largely under the radar and recognition of the world-leading journals in the area of economics, vis-à-vis similarly ranked journals in, say, social sciences, management, or finance. The risk is to let new and old important areas of inquiry die of starvation or drift away from economic departments and outlets, failing to integrate into broader debates within the field.

The experience of one of us in a pluralistic and multidisciplinary project, called FESSUD, between 2011 and 2016, was reported as a practical illustration of some of these points. FESSUD explored the economic and social functions of finance, forging alliances across several sciences and offering fair space to different economics perspectives, from DSGE modelling to Marxists or Post Keynesian economics. It had an EU budget of circa 8 mil €, and included 14 leading European universities + NGOs as participants.3  But, as the final grant report testifies, out of the total 57 papers not one was published in world-leading economics journals, so labelled CABS 4/4* in the Academic Journal Guide of the Chartered Association of Business Schools (CABS).4  By contrast, four papers were published in CABS 4/4* jounals in finance (2), social sciences (1), and innovation (1). A similar picture can be drawn from the lower tier of journals: four papers appeared in CABS3 journals in the area of economics, while twelve papers were published in similarly ranked journals of others areas, namely social sciences (7), management (2), finance (1), international business (1), and regional studies (1). Evidence from the UK research assessment exercises is consistent with this scenario. In fact, in the last national Research Excellence Framework (REF) exercise in 2014, only 28 of the c.100 economic providers existing in the UK submitted their output to the economics and econometrics panel. The remaining providers, that submitted their outputs, submitted them to the business and management panel, which is well-known for being appreciative of multidisciplinary and pluralistic research, regardless of the journal areas wherein it is published.

What to do? A process of self-reflection was advocated by Marina Della Giusta, University of Reading, a discussant in the session, who recalled that economists talk about biases in their models but tend not to apply the concept to themselves.

James Heckman was convinced that a ‘proper solution to the tyranny of the T5 will likely involve much more than a simple re-definition of the T5 to include a handful of additional influential journals.’ (Moktar and Heckman 2018).

One suggestion, coming from him and Robert Johnson, is to favor publication in open source arXiv or PLOS ONE format journals. Those speed up and facilitate the publication of new ideas, providing timely and transparent peer review. For gender equality purposes, however, blind review might be important. Zacchia even suggests that evaluations for hires and promotions should be based on peer review of anonymous unpublished work only.

In addition, it is important to make sure that the evaluation commissions are heterogeneous in terms of gender, academic rank, research subfield, orientation and methods. In the case of the UK, this point leads to a very specific suggestion that the REF economics and econometrics panel may want to consider.

Finally, papers are only the final output of a process that starts with differential access to courses and funding. The distribution of public provisions is currently heavily skewed toward a very few ‘excellent’ departments. Instead, as emerged from the debate, funding should explicitly aim to support pluralism in research and teaching, and to promote local development. Currently, for example, research concerning local economies, which are so important for creating synergies between academia and society, is discouraged, as results have virtually no chance of appearing in internationally recognized outlets.

In a discipline like economics, biases and ideologies are impossible to avoid completely: There will always be a mainstream. Yet, it has become clear that, in order to keep our field alive, we need to study ways to guarantee some funding and visibility to, for lack of a better term, non-mainstream scholars. Only then, dissenting will not become a self-imposed death sentence that most scholars will fight to avoid, and new ideas can have a chance to be born and even make their way up to the top — innovating the discipline truly.

Whether this will happen depends upon the openness of the profession as a whole. Without this openness, what passes for economics will become a narrowly-defined activity, of little social relevance, practised by an ever declining number of specialists while many of the young (and not so young) frustrated and disaffected, take their efforts to be recognised elsewhere.

Notes:

1. Orsola Costantini (Institute for New Economic Thinking, New York, USA; OCostantini@ineteconomics.org) and Giuseppe Fontana (University of Leeds, UK and University of Sannio, Italy; G.Fontana@leeds.ac.uk). The authors acknowledge help from the Newsletter editor. The opinions expressed are their own only.

2. See for instance this Panel Presented at the American Economic Association Annual Meeting, Philadelphia, January 2017: https://www.aeaweb.org/webcasts/2017/curse and the collection: https://www.ineteconomics.org/perspectives/collections/crisis-of-conformity-in-economics

3. FP7 program, Grant No. 266800, http://fessud.eu/

4. The Academic Journal Guide of the Chartered Association of Business Schools (CABS; https://charteredabs.org/academic-jounal-guide-2018) is one of the most popular guides to the range and quality of journals in which UK business and management academics (including economists) publish their work.

References:

Ductor L, Goyal S, van der Leijz M, and G. N. Paez 2019.’On the influence of top journals’, Mimeo.

Moktan S, and J Heckman 2018. ‘Publishing and Promotion in Economics: The Tyranny of the Top Five,’ INET Working Paper Series, WP n. 82.

Zacchia G, 2017. ‘Diversity in Economics: A Gender Analysis of Italian Academic Production,’ INET Working Paper series, WP n. 61.