While economists champion competition in the real world, a recent study has unveiled a stark lack of it within their own ranks. The research, titled ‘High and Rising Institutional Concentration of Award-Winning Economists,’ points to a troubling trend: the recipients of prestigious awards, including the Nobel Prize in Economics, overwhelmingly hail from just eight US universities: Harvard, Yale, Princeton, Stanford, MIT, the University of Chicago, Columbia, and Berkeley.
This concentration stands in stark contrast to other academic fields, where a much broader range of institutions and scholars are recognized. Over time, most disciplines have witnessed a decentralization of knowledge and prestige, with awards increasingly recognizing diverse voices and perspectives. However, economics has bucked this trend, exhibiting a persistent and even growing concentration of accolades among these eight universities.
The authors of the study, Richard B. Freeman, Danxia Xie, Hanzhe Zhang, and Hanzhang Zhou, explore potential explanations for this phenomenon. They suggest that factors such as reliance on physical capital, the maturity of the discipline, the role of prestige within the field, and prevailing disciplinary norms may all contribute to this reality.
In a commentary on the study, Harvard economist David Deming delves into the implications of this concentrated award landscape. He argues that economics, in its pursuit of status and prestige, has become increasingly insular and detached from the pressing challenges facing the world. This disconnect, he contends, has led to a perception among the public that economists are out of touch with everyday realities.
Deming further notes that the concentration of awards among these elite universities reflects a fundamental difference in how humanities and sciences are evaluated. While sciences rely heavily on data and objective analysis, humanities disciplines like economics have become increasingly subjective, making it more difficult to objectively assess their contributions.
This subjectivity, according to Deming, creates a ‘halo effect’ where the work of established scholars is often presumed to be exceptional simply by virtue of their affiliation with these prestigious institutions. He cites the Kluge Prize, Holberg Prize, and Rolf Schock Prize as examples of humanities awards that also exhibit a disproportionate representation from these eight universities.
Despite these concerns, there is a glimmer of hope on the horizon. The growing prominence of empirical and data-driven approaches to economics, which are inherently more objective, presents an opportunity to level the playing field. Deming highlights the work of development economists like Abhijit Banerjee, Esther Duflo, and Michael Kremer, who shared the 2019 Nobel Prize for their experimental approach to alleviating global poverty.
Their research, relying on randomized controlled trials, has yielded valuable insights into effective interventions for improving people’s lives. For instance, their work demonstrated that treating intestinal worms in Kenyan schoolchildren led to higher adult incomes, with a 37% return on investment. They also debunked a costly United Nations program aimed at reducing indoor air pollution by providing efficient cooking stoves to the poor, revealing that it was ultimately ineffective.
By promoting data-driven research that addresses real-world issues and offers practical solutions, economics has the potential to move beyond insular academic debates and contribute meaningfully to solving global challenges. The future of the field may depend on its embrace of objective analysis and its commitment to making a positive impact on the world.
