Edward L. Glaeser is an economics professor at Harvard and the author of the forthcoming book “Triumph of the City.”
Last week, The New York Times reported that “faced with a run of criticism, including a popular movie, leaders of the American Economic Association, the world’s largest professional society for economists, founded in 1885, are considering a step that most other professions took a long time ago — adopting a code of ethical standards.”
As the American Economic Association begins its annual convention in Denver this week, should creating an ethical code for economists be at the top of its agenda?
Economists are no purer than anyone else, and I share the view of my fellow Economix blogger Nancy Folbre that we all have room to become better people. But I’m skeptical that the A.E.A. is well suited to arbitrate the ethics of the economics profession.
In one area, however, the A.E.A. can act productively: It can create clear conflict-of-interest disclosure rules for its prestigious journals.
The film “Inside Job” raised disturbing questions about whether economists who regularly wrote or opined on various policy debates failed to report relevant background information, such as board memberships or consulting arrangements. The accusations are serious, and it seems clear that the profession has been carelessly cavalier about conflicts of interest.
As individuals, most of us could do with higher moral standards, but what are the appropriate institutional remedies?
It would be nice to think that the American Economic Association could lay down a code of ethics that would solve everything, but that would be a vast institutional overreach. The biggest problem with that approach is that the A.E.A. is not a licensing or accrediting association, like the American Bar Association.
The A.E.A. publishes journals, organizes an annual meeting and gives out awards, such as the John Bates Clark Medal. Membership in the A.E.A. is not selective, and many economists choose not to join, without much harm to their professional reputation (I think I’ve let my own membership lapse).
Moreover, the economists who are elected to lead the A.E.A. are not chosen for their expertise in ethical matters. It is hard to see how they would be well positioned to draw up ethical codes.
Furthermore, were the A.E.A. to engage with ethics, highly contentious issues would arise, such as the ethics of giving advice to non-democratic states. Until “Inside Job,” the most serious ethical debate that I know of within the profession was over advising Chile’s Pinochet regime.
One view was that providing advice to any regime that abused human rights was wrong. Another view was that providing economic advice was ethical, because it would improve the lives of the people living under the regime.
If the A.E.A. took either view on this thorny topic, the organization would have weakened itself dramatically, by creating conflict and alienating a significant fraction of its members. Another danger, which seems more likely, is that it might craft an excessively mild code of conduct that angers no one but sets too low a bar.
That might be worse than no code of conduct at all, providing shelter to people who engage in inappropriate behavior but assert they are abiding by the A.E.A. code.
However, the A.E.A. journals are a different matter. Current events have made clear that academic publications need disclosure rules as stringent as those applied by news organizations.
The A.E.A. is not only within its rights to issue ethical guidelines for publications, including the American Economic Review – good management demands that it do so. Requiring the disclosure of any relevant conflicts on the first page of an article seems like a sensible starting point.
If the A.E.A. takes the lead on disclosure rules for its journals, the professions’ other publications are likely to follow suit. I certainly wish that we had followed such a policy during my 10 years editing the Quarterly Journal of Economics.
What about disclosure in other contexts, such as non-refereed publications, speeches or comments to reporters? In these cases, universities – not the American Economic Association – are the natural ethical authority. (Full disclosure: I am just starting to serve on Harvard’s universitywide Standing Committee on Individual Financial Conflict of Interest).
Universities have the resources to develop ethical guidelines and the power to enforce them. They are the employers of academic economists, and ethical lapses damage them, too. They are the natural institutional guardians of their employees’ professional behavior.
The American Economic Association has successfully operated for 125 years, and part of its success comes from staying above the fray. Its primary purpose is to encourage the exchange of ideas through meetings and journals. It can and should regulate those journals better, but it doesn’t have the authority to try to regulate other aspects of economists’