IGM, Economic Consensus, and Partisan Bias
By Bryan Caplan
If you follow the economic policy debate in the popular press, you would
be excused for missing one of our best-kept secrets: There’s remarkable
agreement among economists on most policy questions. Unfortunately,
this consensus remains obscured by the two laws of punditry: First, for
any issue, there’s always at least one idiot willing to claim the
spotlight to argue for it; and second, that idiot may sound more
respectable if he calls himself an economist.
To convince his readers, Wolfers points to the IGM:
How then can the quiet consensus compete with these squawking heads? A wonderful innovation run by Brian Barry and Anil Kashyap at the University of Chicago’s Booth School Initial on Global Markets provides one answer: Data. Their “Economic Experts Panel” involves 40 of the leading economists across
the US who have agreed to respond on the economic policy question du
jour. The panel involves a geographically and ideologically diverse
array of leading economists working across different fields. The main
thing that unites them is that they are outstanding economists who care
about public policy. The most striking result is just how often even
this very diverse group of economists agree, even when there’s stark
disagreement in Washington.
How good is the IGM evidence, though? Wolfers says that the panel is “ideologically diverse.” When I asked Kashyap, however, he said that there’s no public data on panel members’ political views. If you casually peruse the list, its members seem to lean heavily Democratic. Dan Klein’s systematic empirics say that the economics profession has Democrat to Republican ratio of 3:1. None of this would be a problem if becoming an economist caused people to join the Democratic party. In my experience, though, most economists picked their party long before they started studying economics.
Can I come up with any better evidence than Wolfers does? False modesty aside, I think I already have. When I analyzed the Survey of Americans and Economists on the Economy, I showed that a strong expert consensus remains after statistically controlling for party and ideology. Whether economists are Democratic or Republican, liberal or conservative, they converge on a remarkable set of contrarian views.
Does this mean we should take the IGM results are face value after all? Maybe, but I’m worried. Wolfers’ main examples strike me as partisan even within the economics profession. Take the stimulus:
92 percent agreed that the stimulus succeeded in reducing the jobless
rate. On the harder question of whether the benefit exceeded the cost,
more than half thought it did, one in three was uncertain, and fewer
than one in six disagreed.
My complaint: These results are basically what you’d expect from a non-expert panel with two Democrats for every Republican. What’s the value-added of the IGM’s economic expertise on this question? Hard to see.
Partisan bias seems particularly troubling when the IGM deals with policies that have recently been in the news. When economists analyze events decades in the past, it’s relatively easy to put politics aside and coolly apply abstract economics to concrete cases. When they analyze events they recently lived through, however, objectivity is harder to achieve. This is especially true when they’re personally close to the administrations that adopted the policies they’re now asked to judge.
I’m glad the IGM exists. I certainly don’t mean to impugn anyone’s integrity. Yet we have to face facts: the IGM panelists aren’t just intellectually exceptional; they’re also politically exceptional. To cope with this problem, the IGM ought to at least explicitly disclose its panelists’ political allegiances – perhaps reweighting them to match the allegiances of the broader public. Better yet, the IGM should be more forward-looking. If you really want to tap economists’ expertise, don’t ask them for their opinions on policies we recently adopted. Focus on policies politicians are likely to start debating in five or ten years. That wouldn’t entirely negate the effects of political bias on economists’ judgments, but it’s nevertheless a prudent prophylactic against groupthink, status quo bias, and availability cascades – three judgmental pathologies that afflict laymen and expert alike.