How Economists Write

November 25, 2009

In the passages I’ve quoted from Alchian and Allen, there’s been some question over whether or not we can take these guys seriously. The important thing to realize, when you’re reading economics, is that proper “economic analysis” of a policy deals only with effects, not motivation. It’s somewhat analogous to the “behavioralist” idea in psychology, in which they said, basically, theories of mind are useless. It’s not quite the same as saying that motivations don’t matter. They may matter, but at least for the purpose of economics, they are useless. That is, a policy can be put in place for any number of reasons, but if it’s the same policy, it will have the same effect in each case.

Anyway, let me put up another example of this sort of “economist’s style” of writing, from another of my favorite economics books, Tim Harford’s The Logic of Life:

They call Doula “the Armpit of Africa.” [..] I don’t know who first applied the “armpit” label but I wouldn’t be surprised if it was Cameroon’s Ministry of Tourism. We all know that in most countries the Ministry of Defense is in charge of attacking other countries and that the Ministry of Employment presides over the unemployment lines. Cameroon’s Ministry of Tourism is in that noble tradition. Its job is to discourage tourists from getting into the country.

One colleague had warned me that the Cameroonian embassy in London would be so obstructive that I’d have to go to Paris to get my tourist visa. In the end I had less trouble because I had a man on the inside: a friend in Cameroon paid the equivalent of a half-day’s wages to get me an official stamp of invitation. Armed with this official stamp, I paid another five days’ Cameroonian wages to get my visa, in a process that required only three trips to the embassy and some mild groveling. Funnily enough, my companions and I did not meet many tourists in our three weeks in Cameroon.

But I don’t want to give too much credit to the Ministry of Tourism. Discouraging tourists is a real team effort. According to Transparency International, Cameroon is one of the most corrupt countries in the world. In 1999, it was the most corrupt country surveyed. When I visited in 2001 it was the fifth most corrupt, an improvement much celebrated by the government. A moment’s reflection should tell you that earning the title of “Most Corrupt Country in the World” takes some effort. Because Transparency International ranks countries based on international perceptions of corruption, a winning strategy is to concentrate on screwing bribes out of foreign businessmen– for instance, at the airport. But the Cameroon authorities have spread themselves too thin, because Cameroon is massively corrupt at every level and does not just target foreigners. Perhaps it’s this lack of focus that caused them to slip from the top spot. [pp. 166-167]

So you might ask, “Does Harford really think that the Cameroonian government is trying to be ranked ‘Most Corrupt’?” and the answer would be, “Maybe not, but to an economist, it doesn’t matter.” Economics strives to be as objective as possible, and that means, in part, avoiding speculation about what people’s intentions are when they make decisions.

It’s funny and perverseĀ  to imagine that men are cleverly advocating these laws to protect their jobs or that the Cameroonian government is competing for the top spot on the corruption tables, and it would certainly be an easy explanation for why certain policies exist, but economics, qua economics, doesn’t attempt those kinds of questions.

The goal of economics, first and foremost, is to answer the question, “What will happen if we institute policy X“? So to do a contrast, “If we impose a minimum wage, employment among low-skilled workers will be lower than it otherwise would be,” true or not, is an economic statement. “Imposing a minimum wage is a bad idea” is not.

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One Response to “How Economists Write”

  1. Rrrobert! Says:

    I’m wary of this kind of decontextualization, for a couple of reasons. First, you can’t formulate reasonable hypotheses without some thinking about the mechanisms you’re working with. So divorcing the effects from the motivations can lead to aimless investigation, and that seems silly (though obviously, a key principle of the scientific method is designing experiments in a way that can test the mechanisms you envision).

    Second, let’s not pretend that “what will happen if we institute policy X” is one question. Your statement about employment may be “economic,” but it’s not a complete analysis of what happens. What you’re really asking is “what happens with respect to the variables I care about,” and your choice of variables probably ought to be related to the broader vision you have for your work. Unless you want to spend the rest of your career researching the effects of a minimum wage hike on rainfall in the Ozarks.

    The point being, an awful lot of all science, social or not, is about the context you choose, and economics is no exception. To a savvy economist, it ought to matter whether Cameroon is deliberately corrupt or not, since the two suggest different causes and mechanisms for the end result.


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