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Well, a part of the problem is that we get what we pay for. Or rather we aren't getting it. As you say Livio universities and academics are largely government funded in Canada, but as Frances noted on previous threads advancement in Academia requires publication, and the journals of repute in Economics want American-centric analysis above all else, even though the United States is not typical whereas Canada has far more peers as a economy.

If I were granting Canada Research Chairs and economics grants I would stipulate that research has be Canada-centric. No, I don't care if this harms an academics career. I am trying to change the system. If we give the economics profession public money then we have have right to ask that the area of research be focused on Canada as that makes is directly applicable to policy analysis. He who pays the piper calls the tune.

I enjoyed the piece and am not being in any way facetious when I say this but what exactly is "rigourous" these days? Is it mathematical formalization of a tautology that we know isn't representative of the real world? Every school of economic analysis contains strains of ideology whether we wish to admit it or not. Economics, as a discipline, is strengthened when we incorporate different frames of reference --be it politics, sociology, geography-- and cross polinate to provide a fullsome picture for public policy purposes.

Hi Livio,

Is there a link to this paper by Drummond?

I question the aging policy focused people in academia claim. 1) many academics turn to policy later in their research life cycle, after having established their cred. So, the fact that policy oriented people are on average older is not surprising. 2) I wonder if he knows about younger policy oriented people--or is his claim just that the policy people he knows are old. Does he know about Tammy Schirle or Christine Neil? Paul Kershaw or Lindsay Tedds? Phil Oreopoulos or Andrew Leach? The under 40 cohort may or may not compare well to those of yesteryear, but they exist.

I do agree with Livio that the incentives are not there at all for Canadian policy work by economics academics. Much harder to publish in big journals, and the Canadian public and Canadian politicans don't seem to care for policy analysis. There are fans of good evidence in the bureaucracy, but I don't know how much that matters.

However, if we set up big $ rewards for people to do Canadian policy analysis then that makes it harder for our econ departments to hire the best economists. I know that if my US-trained junior colleagues were told they had to work on Canada to get tenure/dollars/etc from my department, there would be a mass exodus. And my own work on mostly-Canadian topics would be much worse without being surrounded by bright engaged colleagues.

But we need not think of it as an either-or proposition. The right question is whether we should marginally shift the incentive to work on Canada, and what incentive lever to push. CRC focused on Canadian policy? Course buyouts? Big research prizes?

Let's not forget that there are already some substantial incentives in place. If you focus on Canada, you are better placed for highly lucrative consulting contracts with HRSDC and the like. You get your name in Canadian newspapers, for whatever that ego-rent is worth. You can get better research grants with course buyouts attached. I've benefited myself from all three of those things. And my theory colleagues are actually already not too happy that they don't have the same opportunities for course buyouts etc.

I don't know if more money is that much of a solution here. I think the problem is convincing AER editors that Canada matters. Good luck. Or, convince the global profession that a CJE is equal to an AER. Good luck. I don't think either of those things is realistic. So, unless you can suppress the drive for status, how do you get around that?

One last thing--I contest the idea that the profession rewards technical and esoteric theory. The rewards for being a data-driven practical researcher have never been higher. I don't think that's right at all. Very few abstract theorists have won the Bates Clark award over the past 20 years, as I recall.

Whoops--some ambiguity in the last paragraph. When I say "I don't think that's right at all." I mean that the claim that theory/abstract stuff highly rewarded is not right at all.

Here is the Bates Clark medal list--see for yourself:
Bates Clark


You should be able to get it here:

http://www.csls.ca/stewartfestschrift.asp

Thanks Livio. I will check it out.

Reading my unfocused post again, I note I contradixct myself strongly. When I say 'incentives aren't there' I think I mean career incentives. My conjecture is that financial incentives are there but career incentives are not. While fixing financial incentives is relatively easy--you cut cheques--fixing career incentives is much harder. Km

Kevin - " 2) I wonder if he knows about younger policy oriented people--or is his claim just that the policy people he knows are old. Does he know about Tammy Schirle or Christine Neil? Paul Kershaw or Lindsay Tedds? Phil Oreopoulos or Andrew Leach? "

Can I add Kevin Milligan to that list? And, yes, IMHO there's a bunch of people on that list who compare very well to those of yesteryear. (And who are incredibly generous with their time and other resources).

After the Stewart Festschrift was held, Nick Rowe wrote a post describing his reaction to the conference, and I wrote a somewhat cranky and bad tempered response:

I wonder - should the title be "New Directions for Intelligent Government in Canada" or "Nostalgic Memories of Intelligent Government in Canada"? Gen Xer Chris Ragan (BA 1984, PhD 1990) is, I think, the youngest author by some distance....[and] there are no women in the program.

Which is jibes with your impression, Kevin. I wonder, too, if it's a matter of not looking in the right places, or not recognizing policy analysis when you see it.

As the nature of government intervention in the economy has changed, and the scope for feasible policy action has changed, also, so too has the nature of policy research. There are lots of economists working in health policy, immigration policy, etc etc - that's where the action is.

Livio: "Over time, professional economists in Canada have vacated the policy field to other disciplines and then wonder why all these non-economists have so much to say about economic policy. The economics profession also loses from the current situation but seems either unwilling or unable to do anything about it aside from complain that their departments do not get as many hires when it comes to university politics. "

Well put. Do you think it's narrow pursuit of self-interest or do you think it's political naiveté, an inability to see and play the unwritten rules of university politics and grantmanship?

A couple of points:

1) I think having outlets like blogs or even twitter is helpful. If the only available means of communication is a 20,000-word paper that will be published 2-3 years after you start writing, then it's hard to motivate yourself to write about "current events".

2) I have to echo Kevin and Frances on the trend to younger scholars working on empirical, policy-driven projects. I was on the SSHRC committee for 4 years, and was very impressed with what I saw. I can also report that my colleagues on the committee were equally impressed. I really do think that the days of the mathecon hegemony have passed.

3) I agree that the incentives don't encourage young scholars to engage in policy debates outside academia. This is something that we have to work on.

Frances:
I think a large part of it is a certain naive political behaviour. It may sound silly but I've come to the conclusion that economists are the "boy scouts" of academe. They believe that if they work hard and publish in good journals they will be rewarded. They thus do not spend alot of time on university politics and have generally been outmaneuvered by other disciplines who have invested a lot of time into committee work. But then, what do I know? I'm just a simple country economist.
Stephen:
Blogs and the web may indeed be the economic policy venue of the future but without the explicit disciplinary acceptance of the format as a viable publication outlet, it will remain a fringe activity for the profession.

Kevin Milligan wrote:

"However, if we set up big $ rewards for people to do Canadian policy analysis then that makes it harder for our econ departments to hire the best economists. I know that if my US-trained junior colleagues were told they had to work on Canada to get tenure/dollars/etc from my department, there would be a mass exodus. And my own work on mostly-Canadian topics would be much worse without being surrounded by bright engaged colleagues."

But why should the taxpayer pay for research that is not relevant to Canada? I am sure your US-trained colleagues are bright people, but why exactly should we pay for their work if they aren't working on Canadian topics? If you want them around then you need to find non-taxpayer sources of funding for them.

Sure a university can have a department like that, I just don't want to pay for it as a taxpayer. It is not the job of the government to fund economics research as if we were the 51st state.

But why should the taxpayer pay for research that is not relevant to Canada?

Exactly. Shut down NSERC and the MRC and give their money to SSHRC.

I assume Stephen had his tongue in his cheek when he wrote the last post.

Don't be disingenuous, Stephen. NSERC and MRC fund research that may be used equally by Canadians as by anyone else. Economics follows political boundaries in a way that Engineering and Natural Sciences do not. Unless you want to get rid of that pesky (X-M) term in Y=C+I+G+(X-M) then you have to live with your own definitions.

Just read Don Drummond's article. He doesn't even mention the journal Canadian Public Policy. Sigh.

Economics follows political boundaries in a way that Engineering and Natural Sciences do not.

Not really, no. You can classify case studies and applications by country or geographical region, but not the actual discipline. Just as there are many Canadian data sets - the SSP is a classic example - that are cited around the world, Canadian researchers can learn from the experiences of others.

Yes really.

Economics deals with policy and politics in a way that natural science and engineering don't. Mostly because economics is a creature of policy, income, history and law. How many posts of Nick's can be subtitled "If I were the Central Banker..."?

It is result of the fact that economics is not a natural science; rather is is a formal science as is mathematics. The laws of physics transcend international boundaries while the laws of humanity do not.

More to the point, how many data sets are focused on China or India? Or North Korea? How relevant are they to Canada?

When researchers focus on American data in order to get published, a phenomenon well documented in posts by Frances and Nick, when publishing on Canadian data is seen a second-rate, a phenomenon also discussed by Nick and Frances and when the economics profession asks the public to pay for those activities the question naturally arises "Why should we?". Why should we pay for less relevant research when directly relevant research on Canadian policy topics is not being done?

Because economics is "worthwhile" is not an answer. Nor is the fact that economics research would not be paid for otherwise is also not valid. That is not the taxpayer's problem, that is the profession's problem.

So Canadian researchers should stop studying the causes and possible remedies of - say - extreme poverty in Africa? Because there's nothing in it for us?

I'm coming at this from outside academia, but is a bright spot not the fact that economic policy is still an area where experts (economists) can have serious input and a real impact on public policy? If you look at other public policy areas--notably health care--expert opinion, when and where it has any impact at all, is really just tinkering at the edges, while the serious problems continue to be bogged down by political dominance of private interests and constraints on substantive change. Same with education. And let's not even start about our wonderful wars.

I realize that the GST cuts were bad policy, as were the stimulus and blocking the PotashCorp sale, but all is not lost. In the long run policy on trade and globalization have been (to my inexpert eyes) pretty good, and that is thanks in no small part to y'all.

I know some excellent health policy analysts, but I don't see their work going anywhere in this country other than down the self-congratulatory drain-bowl of the academic conference. You people who work in macro, taxation, trade, finance, etc., do seem to be in the lead in making real contributions. As Maggie said, "Cheer up!"

"So Canadian researchers should stop studying the causes and possible remedies of - say - extreme poverty in Africa? Because there's nothing in it for us?"

I didn't say stop studying it; I asked why should it be paid for from publicly-funded grants.

The answer in the case of Africa is that those countries cannot afford such research themselves so tax-funded research grants are a form of aid.

Why are we granting economic research aid to the United States?

Your rebuttal, Stephen, sounded remarkably like a Fallacy of Accident. http://en.wikipedia.org/wiki/Accident_%28fallacy%29

Livio, when you wrote the post, I wonder if you had this business in mind.

Perhaps my earlier comment was too sunny, and economic policy is now a radio call-in show.

Reduced capability is a feature, not a bug. Why risk having some parasite civil servant f up your propaganda with facts?

Just read the Drummond chapter.

* I think he is right about the capacity at Finance Canada. I tweeted a few weeks ago in astonishment at how few working papers were on their website. Almost none.

* I think he is quite wrong about a trend toward more abstract and theoretical work. Exactly the opposite.

* He laments that academics pick off little pieces rather than do 'holistic' analyses. He's right that's what we mostly do, but I think that's good. You can fill a lot of pages with holistic BS and I don't know that anyone would be any wiser. I'd rather know what the taxable income elasticity is, or how recent cohorts of immigrants have fared in the labour market. Houses are built one brick at a time.


There is some mention in the comments above about SSHRC funds being targeted to Canadian research. I've heard that the new SSHRC criteria push harder on the 'contribution to Canadian policy' angle. I fear this. If implemented too strongly, it would destroy our top economics departments. Again, I cannot do my own extremely canadian policy analysis work if I am not surrounded by active econometricians, micro theorists, and good empiricists working on whatever non-Canadian topic keeps them busy. I want SSHRC funding good economists, full stop.

Kevin - "I want SSHRC funding good economists, full stop."

I see where you're coming from with this, Kevin. But as a parent of university-aged children, I have minimal interest in universities hiring good economists, full stop. I want universities to hire people who, at some level, can engage in the core university function of teaching.

I'd love one of my kids to get turned on by econ - and they might if exposed to a brilliant mind early on.

As a matter of curiosity, is there a single SSHRC-funded economist in this country who teaches econ at the 100 level? The 200 level? Probably a few at the 300 level....

Hello Shangwen:
That is a good example of the trend in government. To be fair, what the Alberta government may have had in mind was an advisory council on development and innovation but out of haste slotted it into an existing institutional framework of an economic council. Advisory councils and consultations are not policy analysis but governments have confused the processes though whether it is through ignorance or a deliberate effort to manipulate a debate in a certain direction is a good question. An Economic Council with only one economist seems bizarre. What's next, economists on hospital surgical teams in order to ensure advisory inclusiveness during a heart transplant?

"Why base your decisions on facts and analysis when you can rely on ideology and faith? "

For the ideologues now running the country, there is a happy coincidence. They contruct their policies based on ideology and faith, and see around them, not rigorous analyses by the ton that demolish their 'solutions', but academics and other policy wonks who have based their positions (and solutions) on different ideologies and different faiths. Its easy to see the fingers pointing in opposite directions. But where are the quality data analyses?

The problem isn't funding. The problem is we have had about 40 yrs now of disciplines in the social 'sciences' that have lost their way, have lost the rigorous approach to data collecting and analysis. That has been substituted with ideologies of one kind or another, and there has been no incentive to challenge those ideologies. But what is far, far, far worse is that these postmodernists have unleashed upon the Western world decades of university grads who 'know' what is right and have lost the capacity to analyze. We've got the rhetoric, but not the stuff to back it up.

Frankly, I'd defund the SSHRC altogether. Who needs it?

Richard - "The problem is we have had about 40 yrs now of disciplines in the social 'sciences' that have lost their way, have lost the rigorous approach to data collecting and analysis."

I wish you could have seen my students on Wednesday when I took them to our library data centre and showed them all of the data that they could download there - and see all of them successfully retrieving data, loading it into Stata, and calculating descriptive statistics. With today's technology it's never been easier to do empirical research, and people *are* doing it. In fact, one could ague that part of the reason for economists' loss of policy supremacy is that these days sociologists and political scientists and all sorts of other non-economists can generate regression results by pointing and clicking.

Before you long too much for the good old days, take a look at some of the pictures and links on my last post on the Gini coefficient. There was a time when plotting five points on a piece of graph paper was considered rigorous analysis - because that was all you could do with the data and technology available.

this is a great post and great comments.

I agree that the economic profession seems to move away from esoteric topic but ratter answer more economic focus question.

I agree we need econometrician to build better estimator and applied theorist to build theory but I dont get why pure theory matter. Why should we fund them with the SSHRC?

By pure theory, I mean axiomatisation, social choice, etc.

I agree that the lack of policy capacity can be attributed to a lack of demand. It is not that new policy workers entering government with MPAs don't have the skills or that they aren't aware of the research. They just aren't asked to provide policy advice.

Media doesn't talk about it in depth, so politicians don't get recognized for good policy, so advice based on good policy is not requested. I really do blame the media. Their coverage of policy is pathetic. The excuse that there isn't an audience doesn't hold water in my view, because the wants of an audience can be changed by what they're exposed to.

"There is some mention in the comments above about SSHRC funds being targeted to Canadian research. I've heard that the new SSHRC criteria push harder on the 'contribution to Canadian policy' angle. I fear this. If implemented too strongly, it would destroy our top economics departments. Again, I cannot do my own extremely canadian policy analysis work if I am not surrounded by active econometricians, micro theorists, and good empiricists working on whatever non-Canadian topic keeps them busy. I want SSHRC funding good economists, full stop."

As Stephen Gordon said when discussing military procurement and the public seeing them through the jobs lends, both military procurement and economics grants are *costs* not benefits. Why should the Government of Canada bear those costs?

This question is not new. Many private businesses and government programs have been forced to justify their existence with respect to other priorities in the last 20 years. Now it's economists turn.

Sure it's uncomfortable but many other businesses, professions and programs have had to go through that discomfort.

I would disagree with Drummond's general statement that provinces lack policy capacity. Ontario, for example, has a superb public service, partly because there are many highly skilled people who want to live in the centre of the universe and partly because provincial governments are far better at getting rid of incompetent or underperforming staff than is the federal govenrment.

Also, the policy process is far more streamlined at the provincial level, so policy actually gets made. Policy capacity doesn't just refer to having the right human and financial resources to conduct analysis, it also implies a suitable process to get the right things done.

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