Last month, Dani Rodrik wrote a piece for Project Syndicate that went all kinds of viral. In it, he explains why he no longer views himself as a political economist. The upshot: because if he believed the stuff he used to believe, he’d have to accept that there’s not much room for improving the world through op-eds, and that’s not something he’s prepared to accept.
Consider this passage:
But there was a deep paradox in all of this. The more we claimed to be explaining, the less room was left for improving matters. If politicians’ behavior is determined by the vested interests to which they are beholden, economists’ advocacy of policy reforms is bound to fall on deaf ears. The more complete our social science, the more irrelevant our policy analysis.
Where exactly is the paradox?
If I told you that I used to believe that weather patterns were entirely determined by natural phenomena until I realized that this meant I had no control whatsoever over whether it will snow tomorrow, at which point I took up the ancient practice of animal sacrifice, you would laugh at me, yes? I certainly hope so.
Now, I’m obviously not saying that Rodrik has turned to animal sacrifice. I don’t even agree that explaining political economy disempowers us. I’d only say that studying political economy reveals pre-existing obstacles to change, though I don’t think these obstacles are so insurmountable that we should conclude that we have no power whatsoever over political outcomes (the way I really do believe I have no power whatsoever over whether it will snow tomorrow).* But insofar as Rodrik says that we need only make the assumptions of political economy explicit and “the decisive role of vested interests evaporates,” there’s more than a little similarity to my hypothetical conversion to whatever belief system still encourages animal sacrifice.
This is the part of the blog post where I add all the important caveats and concessions to my inflammatory remarks. Of course, only a few you will read them. Yet I proceed, for the sake of the small little marginal benefit that comes from influencing the thinking of a small number of people. Because, as shocking as this is, some of us believe that it’s possible to go on living, to believe your efforts have some meaning, even if they don’t have a huge, dramatic impact on the world. Just throwing that out there.
First, I mostly agree with Rodrik’s characterization of political economy. I say “mostly” because he’s overstating things a bit. I doubt there are any practicing political economists who believe that ideas do not matter at all, though I’m not sure how many would accept Rodrik’s claim that ideas account for the breakout growth of South Korea and China. At any rate, Rodrik doesn’t think that structural forces are unimportant, and political economists don’t think ideas are unimportant. We’re obviously only talking a difference of degree here, not that anyone can tell how big the difference is since Rodrik largely sets up a straw man.
Here’s what I consider the key point: if you were to ask a room full of undergrads to rank on a scale from 1 to 10 how much room there is for us to change the world through advocacy campaigns, op-eds, blogs, and other expressions of our ideas, the average answer is almost certainly going to lie well above the one political economists would provide. I strongly suspect it would lie above the one Dani Rodrik would provide, though I confess I have no way of knowing that for sure. If you repeat the exercise with social science grad students and faculty, you might get responses a bit closer to Rodrik’s (which I suppose may even be the true value, though the fact that he’s transparently engaged in motivated reasoning makes me pretty uncomfortable), but I just don’t see the evidence that the primary task before us is to convince people that they underestimate their ability to transform the world. There’s a good case to be made that we face the opposite problem. Sure, if we ever reach a point where most people (or most social scientists at least, who I guess we can count as people) believe that structure is everything, that none of our actions have any meaning, I’ll join Rodrik in calling for a move away from political economy. But we’re, um, pretty not there. Like, really really not there.
Second, I also largely agree with Rodrik about the difference between the “human sciences” and the “natural sciences” implied by his (mostly accurate) characterization of the former. However, this too is overstated. You may not be aware of this, but the overwhelming majority of climate scientists believe…yeah, okay, you see where I’m going. I could say something about how little our ability to shape our physical environment has changed as a result of astronomy, or tout the importance of basic research in any field, but I’ll just simply observe that our friends in the white coats don’t always have the impact they think they should have on the world either. And one just might believe that vested interests have something to do with that. Not that anyone has ever alleged that anyone stands to gain economically from blocking policies intended to mitigate climate change, of course. That would be absurd.
Finally, allow me to distinguish between zero impact and an infinitesimally small but non-zero impact. This should go without saying, but past experience tells me that it does not. I agree that scholarly inquiry has an impact on the world. I’m not sure how anyone could dispute that. There is no such thing as truly value-free social science. The very act of asking one question and not another influences the way people think and the priorities they have. Choosing to study conflict rather than cooperation has implications. Choosing to study the causes of conflict rather than the consequences thereof has implications. Choosing to study how people study international politics has implications. Some of us assume away those effects when conducting our research, others do not. Some of us are willing to defend our choices, others would rather that question never get asked. But it’s hard to escape the conclusion that our research has but a very modest impact on the world. The average citation count for a peer-reviewed article is somewhat less than impressive. The odds that any given piece of research will get noticed by more than a handful of other academics, let alone their students, nevermind anyone with actual power over policymaking, are minuscule. Obviously commentary in more accessible media outlets reaches a larger audience, but it’s easy to overestimate the impact there too. A list of the most prominent exceptions (if in fact the economic experiences of China and South Korea qualify, about which I’m skeptical) does not invalidate this claim, just as the fact that some people have secured tenure track jobs does not make it good advice to tell all of our undergraduates to enroll in PhD programs nor does the success of [your child’s favorite musician] or [your child’s favorite athlete] mean that you practice bad parenting when you tell your children that they ought to have a backup plan. Children plan their lives around best-case scenarios, showing no regard for how hopelessly the odds are stacked against them. People with PhDs should be a little more sober in their asssessments. Yes, it’s possible that the world’s governments will change their policies if you spend enough time criticizing the status quo on the interwebs. But it ain’t all that likely. And if you don’t think it’s worth studying politics and/or economics if you’re not going to achieve that level of success, you should probably start thinking about backup plans.
*I write this in Buffalo, where it is not currently the season of the year known as “Fourth of July”, so odds are that it will. I’ve made my peace with that.
Great piece, thanks. I had problems with Rodrik’s “paradox”, too. He claims “the more we claimed to be explaining, the less room was left for improving matters.“ I don’t see the point. Now, I’m no expert in rational choice and game theory, which are the main things Rodrik is apparantely ranting about. But both RC and GT explanation give us two starting points for “improving matters”: preferences and rules/institutions, since all that (formal) PE does is laying out very clearly and rigorously, which social outcomes we would expect under a given set of preferences and a given set of rules. This is not only very valuable and enlightening academically, it gives concrete example where to start when we want to change things. Only because PE may not be so good at explaining where preferences come from (I’m not saying it can’t, it’s just not being done very often), does not mean that they can’t change in the real world. *include obligatory Kahneman/Tversky reference here* No RC-theoretician would argue with you about that (I guess. There may be other people out there). Only because political economy shows us very clearly how and under which conditions vested interests matter, doesn’t mean these interests can’t be changed. And PE also shows us which rules need to be changed for outcomes to vary: institutions matter and we’re better off knowing under which conditions they matter than simply reducing them to ideas.
So rather than giving less room for change, I’d say PE just clearly shows us under which circumstances in can be difficult (or easy) to change things. Which is quite a lot in terms of policy advice.
Now, whether we are able to actually change things on the basis of our evidence is a different thing. On the one hand (if you’re with Rodrik) you could say: no, it’s vested interests all the way down. If that’s true, change is going to be impossible or difficult (I’m overstating Rodrik’s argument here to make the point). Now, a political economist who doesn’t share Rodrik’s view might say: ah, it’s vested interests. It’s going to be difficult to achieve change here because of that, that, and that constellation of preferences, actors, and rules. But at least we know where to look.
Note that neither approach negates (as Phil pointed out) the role of ideas. I see a lot of potential for fruitful cooperation here between ideas (some heretic might call this constructivism) and PE: given a specific constellation of actors, rules and interests, which ideas changed what of these three factors for the equilibrium to break? For instance, when did it become more costly for elites in country X to cling to authoritarian than to open the political system? Which combination of ideas and interests led to this change?
Am I saying PE needs ideas to explain change? Maybe. I’m not sure if I wanted to say that. :) It seems to be the point Rodrik was making all along, although I started out disagreeing with him in the beginning. :D Well, a lot can happen in the course of writing a blog comment, I guess that’s what they are for. At least Rodrik’s and Phil’s pieces gave me some food for thought (ideas, one might be tempted to say). Which is always a good thing.
Thanks, Felix. I agree with your comments completely.
Great post, Phil.
First off, no one doubts the importance of ideas and I’m surprised he didn’t quote Keynes here but which came first: ideas or interests?
Rodrik claims that “our contemporary frameworks for political economy are replete with unstated assumptions about the system of ideas underlying the operation of political systems. Make those assumptions explicit, and the decisive role of vested interests evaporates.” Really? What level of analysis would one use to study ideas – the individual, the group, the state? How does one aggregate an individual’s ideas on some issue to that of the group, and explain why some ideas prevail over others? Wait, am I exhibiting a PE bias here?
He goes on to talk about South Korea and China, and this is where I see a contradiction. He states that the vested interests “won” in these cases and that “what enabled reform was not a reconfiguration of political power, but the emergence of new strategies”. Well, I doubt any comparativist worth his/her salt would argue that the reason why these countries managed to generate such astonishing growth is a consequence of changing “vested interests” or political power. It is precisely because the “vested interests” wanted to stay in power that they chose the strategies they did – note that South Korea was an authoritarian regime (and China still is). It seems that Rodrik is using this example to illustrate how ideas matter in the choice of strategies BUT without the elites’ desire to maintain power, why would they ever change strategies? Hmm…it seems to me that the PE approach works just fine here. Ideas may very well “determine the strategies that political actors believe they can pursue” but interests (and institutions)determine whether they would pursue those strategies in the first place.
Rodrik is setting up a straw man when he claims “If politicians’ behavior is determined by the vested interests to which they are beholden, economists’ advocacy of policy reforms is bound to fall on deaf ears.” This may be true sometimes, and perhaps with respect to advanced industrialized democracies (the US in particular), but this is clearly a sweeping generalization. A reformulation ought to read: “If politicians’ behavior is determined by the vested interests to which they are beholden – and they are to varying degrees, economists’ advocacy of policy reforms will succeed if these reforms are amenable to the vested interests.” Consequently, one would expect policy reforms to occur and succeed if there is a shift in political power, which in turn is affected by the social and economic context. This doesn’t mean that policy analysis is irrelevant; it simply means that policy analysts need to be cognizant of the interests that underlie policy decisions. Don’t we wish we were dictators at some point, then the only “vested interest” is my interest, and I can pursue policies that I believe are for the good of the nation?
A final point. His opening line: “There was a time when we economists steered clear of politics”. When was this? Certainly not Smith, Keynes, Hayek, or even Friedman. Economics is the mutant offspring of what was political economy in the eighteenth and nineteenth centuries, in which mathematics took centerstage to the exclusion of historical, cultural and socio-political context. Keynes’ admonition clearly fell on deaf ears.
Thanks, TT.