Conflicts of interest in economic research

Tell me about it!

From Bloomberg View.

Academic economists have recently become the unaccustomed subjects of intense scrutiny. The 2010 documentary “Inside Job” drew public attention to the board seats, consulting gigs and sponsored research that tie many of them to Wall Street. They often failed to disclose such conflicts of interest in their research papers and public comments on topics such as financial reform — omissions that could influence decisions affecting the lives and livelihoods of millions of people.

. . . Even the best-intentioned economists — and particularly those in the area of finance — face a litany of influences pushing them toward a rosier view of the industries they study. In a yet-to-be-published paper, Luigi Zingales, a finance professor at the University of Chicago’s Booth School of Business, likens the pressure to regulatory capture. A pro-business attitude, he notes, can increase an economist’s chances of landing lucrative consulting, expert-witness and research contracts, and can facilitate publication in academic journals whose editors are themselves captured. (Zingales is a contributor to Bloomberg View’s Business Class blog and has accepted money for speeches to Dimensional Fund Advisors, a hedge fund, and Banca Intermobiliare, an Italian private bank, among others.)

As a small test, Zingales looked at the 150 most-downloaded papers that had been done on executive pay — a subject he reasoned could legitimately be argued either way. He found that papers supporting high pay for top executives were 55 percent more likely to be published in prestigious economic journals, suggesting that the editors, also academic economists, have a bias.

. . .  [I]n 2010, as regulators were working out how to shore up the banking system, two members of the group — Anil Kashyap of the Booth School of Business and Harvard economistJeremy Stein — co-wrote a paper on the potential economic costs of bank capital. The sponsor of their research: the Clearing House Association, a trade group that represents JPMorgan Chase & Co., Bank of America Corp. and other major financial institutions. Theirs is just one of many examples in which widely respected economists have done research funded by interested parties. . . .

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conrad
conrad
9 years ago

Not that I have any idea of how bad economics is for this, but I’m willing to be that it’s even worse in some areas of pharmaceutical research where the amounts at stake are often huge.

derrida derider
derrida derider
9 years ago

It’s a worry. The real worry I had when I saw “Inside Job” was the reaction of the economists interviewed when the possibiilty of a conflict of interest was put to them.

Universally it was an indignant “how dare you ask such a question!”. When money matters are involved I have always taken such a reaction as an unconscious admission of guilt.

Dan
Dan
9 years ago

I’d love a gig acting as a highly-paid obscurantist/PR man/spin doctor for big business under the aegis of academic respectability/detachment.

If anyone can hook me up, please get in touch. Thanks.

PS. I am totally amoral, so no implicit admissions of guilt from me. The concept simply isn’t on my radar.

Patrick
Patrick
9 years ago

I almost prefer funded research – at least that way you have a reasonable idea what the biases are!

As long as they are declared, which I believe the economics industry is moving slowly towards.

Tel
Tel
9 years ago

Dan:

I’d love a gig acting as a highly-paid obscurantist/PR man/spin doctor for big business under the aegis of academic respectability/detachment.

They won’t pay for the answers that you normally give. Sorry mate.

conrad
conrad
9 years ago

Nicholas, the reason it’s bad in academia is that getting money is the number one way people get promoted in Australian universities (and presumably many second tier American ones). It also trumps essentially everything else — if you earnt a million dollars and never published anything decent in your life, you’d be a full professor, but there are truly ace people (scientifically) that don’t get much money that never get promoted, simply because getting money in their area is not simple (e.g., pure mathematics). Not surprisingly, some people get cynical and game the system for amounts which are huge in academia but would seem trivial to some of the big companies that get free “science” done supporting whatever they want. Why not add a ghost writer or two to make things even simpler? It is also the case that if you get lots of money, you generally have lots of power, so not surprisingly this sort of money chasing becomes entrenched at the expense of other things (indeed, almost everything).

Dan
Dan
9 years ago

Tel@6: At the moment I’m in the pay of the Politburo but can change my allegiance at any time. With practiced ease.

Dan
Dan
9 years ago

Academic publishing is a business model that makes loan sharking look like the epitome of fair exchange.

Regardless of one’s opinions on George Monbiot generally, I think he got it right in this one:

http://www.monbiot.com/2011/08/29/the-lairds-of-learning/

conrad
conrad
9 years ago

In case you want to know how much journals can be run for, then a good example is the journal Language (which is one of the biggest linguistics journal). This costs all of $140 per year for institutions (or free for individuals with a US $95 membership to the Linguistics Society of America).

Funnily enough, one problem they have is that because the society simply publishes the journal themselves, they’re not on any of the major databases or lists many libraries use. At least where I work, this means my library won’t even entertain the possibility of getting it, whereas they will entertain the possibility of getting vastly more expensive (and less decent) journals. Business as usual indeed!

Tel
Tel
9 years ago

George Monbiot is a decade behind the curve, but it’s hard to blame him when there’s a bandwagon to ride. I had to actually dig out my old bookmarks file (from three laptops ago!) because google was so clogged with people cutting and pasting from each other in the last six months.

http://www.scientificamerican.com/article.cfm?id=publish-free-or-perish

I guess, all the disenfranchisement going around lately is unearthing old grievances and what’s not to like about that?

Hey (almost) completely off topic but has anyone thought that the not only can the Missionary Church of Kopimism issue marriage licenses, but they might be the only church on Earth with a genuine theological reason to ban gay marriage?

Also this…

http://www.plos.org/about/what-is-plos/early-history/

conrad
conrad
9 years ago

Tel,

one problem with author pays type journls like PLoS is that often authors don’t have the money to pay. For example, I believe one of the main sources of funding in Australia, the Australian Research Council, does not allow you to spend their money on publication costs. So if you have one of these grants, or have no grant at all, and your university isn’t nice enough to pay the publishing cost (and I assume most in Australia arn’t, but I could be wrong), then you either use your own money to publish it or publish it somewhere else which is free but then costs your library a packet to get. So the cycle continues.

Mel
Mel
9 years ago

The Monbiot piece is an real eye opener. Thanks Danny Boy.

Dan
Dan
9 years ago

No problemo