Thursday, November 19, 2009

Conflict of Interest? Economists? Impossible.

The controversy over medical researchers taking money from drug companies continues. Universities are being called out for their failure to disclose to public agencies the other, private grants researchers are pulling in. The article discusses the competition between research shops for the star grant recipients, but discreetly fails to point out that the universities themselves get a cut of the proceeds, so that the conflict of interest is theirs too.

I’ve mentioned this in the past and will repeat now: there is no corresponding policy, not even rules to be broken, in economics. Public funders and some foundations require an acknowledgment in the published research they support, but this is about “thank you”, not probity. Any disclosure of other, privately-interested funding sources by economists is strictly voluntary, and in practice seldom occurs. Trade researchers can be funded by foreign governments or business associations, health researchers by tobacco companies, law and economics researchers by trade associations facing tort claims, agricultural researchers by agribusiness, and on and on. Turn on the recording function of your iPhone as you saunter the halls in Atlanta in January, and you will pick up lots of tidbits about economists proudly on the take.

Where should we begin to reform this profession? Would an AEA resolution help? Standard disclosure forms required by journals? I’m happy to see that the economic meltdown has prompted some soul-searching about where economists went wrong. Maybe a good starting point would professional transparency.


jamzo said...

your post is timely

a new york times article this morning shows that economists' conflict of interest issues are not uniuque

"In a report expected to be made public on Thursday, Daniel R. Levinson, the inspector general of the Department of Health and Human Services, said 90 percent of universities relied solely on the researchers themselves to decide whether the money they made in consulting and other relationships with drug and device makers was relevant to their government-financed research.

In 2006, 41 universities reported to N.I.H. that 165 researchers who had received grants from the agency had potential financial conflicts. Hundreds of universities receive such grants, and surveys show that about half of academic researchers report having financial relationships with drug makers. So the reported conflicts probably represent just a fraction of the actual number of conflicts."

seems like the value of certain skills gained in university study may have destroyed the seemingly naive ideas of professional ethics and personal ethics of reliability

paul said...

But you don't understand. The free market will lead to exactly the right amount of credibility being given to economists as a result of their funding sources, and to exactly the right degree of disclosure by individual economists. A longterm non-optimal situation is impossible, and my colleague from Lehman has the models to prove it.

Besides, economists' duty to maximize their utility (measured in dollars x tenure) clealry outweighs any paltry obligation to objectivity or truth.

More seriously, this isn't even necessarily a problem because money and support will buy opinions the opiner knows to be false (although in some cases it pretty clearly does). It's a problem because industry and industry shills can decide whom to support based on their opinions.

gordon said...

Another aspect which I don't see discussed much is the influence of a fairly small number of very eminent economists on the sorts of work undertaken by grad. students, on the selection for tenure and on what gets published in prestigious journals. These men, it seems to me, are influential out of all proportion to their "official" academic positions and often act to prevent radical ideas being taken seriously and to stop the "wrong sort" of people getting a voice. And yet it is hardly ever discussed.

Anonymous said...

I guess that helps explain this: Economists Opposing Fed Audit Are On Fed Payroll

TheTrucker said...

I look at this stuff from a different perspective and have different opinions than most well educated people. To bring it into sharp focus, I am much concerned with the number of "conservative think tanks" which I associate with freeper fundamentalism such as Efficient Market Hypothesis and other Satan worship.

I am also more concerned with high school education and "news" sources than I am with universities. I believe that it is in the high schools that the real battle for truth must be waged. Most of the people who are adversely affected by right leaning Austrian and neoclassical economics are not university educated and they tend to vote people into office based on false economics and general media lies.

FREE education is what matters. If the education costs money it will reflect the opinions of money.