Why is economic orthodoxy so resistant to change? The art of paradigm maintenance.
Ever wondered why it’s so hard to shift big institutions (and the economics profession in general) on economic policy, even when events so graphically show the need for change? I’ve just come across a fascinating 2006 paper by Robin Broad, ‘Research, knowledge and the art of ‘paradigm maintenance’: the World Bank’s Development Economics Vice Presidency (DEC)’, summary here. Full paper here. It must be about the oldest thing I’ve blogged on, but I’m interested in what, if anything, has changed in the intervening years.
Broad explores the nature of what Robert Wade calls ‘paradigm maintenance’, describing an elaborate system for creating, maintaining and propagating what she calls the ‘neoliberal paradigm’ (this is 2006, after all) within the Bank. None of that system is explicit. Broad interviews a number of Bank insiders as well as ex-Bankers and illustrates her findings by contrasting the fates of two then Bank economists – David Dollar, arch spin doctor for the neolibs, and Branko Milanovic, inequality guru and general stone in the neoclassical shoe.
Broad identifies 6 components of paradigm maintenance:
Hiring: the DEC overwhelmingly hires economists with PhDs from US or UK universities
Promotion: the Bank has a similar system to academic tenure, and for that economists need to get published in the right journals, as well as by the Bank itself
Selective enforcement of rules: dissident research generally undergoes not just stricter external review, with occasional rejection, but an intriguing ‘stonewalling’ exercise that grinds down would-be boat rockers. Here’s how some interviewees described it:
Your research manager says ‘I don’t want to deal with this’…. Either he ‘won’t clear it or he will say that you need to send it to the ‘center’. Or, if it is a newspaper op-ed, he ‘passes it to the External Affairs person in DEC.’
After a long time there is no response. So, you call him
And he says the piece is ‘not helpful to the debate’ or ‘the debate has moved on’.
And you say ’But doesn’t the fact that they want to print it show that there’s someone still interested in the debate?’
And he never says ‘no’ but never clears it
If, as does sometimes happen, the researcher opts to publish without sign off, they expose themselves to censure (unless of course, their unapproved pieces are on message).
Discouraging dissonant discourse: Dissidents are labelled ‘idiosyncratic’, ‘disaffected’ and otherwise deemed a misfit. According to Nicholas Stern, a former economist, ‘there is a strong hierarchy and an atmosphere much more deferential than would be found in universities.’ Criticism of work from outside the Bank, like the comprehensive rubbishing of some of Dollar’s key papers, fails to penetrate the institution
Executive Summaries and Press Releases that don’t reflect the main report: an old favourite – since journos almost never read the whole thing, there is huge room to drag reports back on message by distorting their presentation.
External Projection: The Bank’s External Affairs Department gets behind the good guys, and ignores the trouble makers.
What’s interesting is the treatment of dissidents like Branko. They are sometimes de facto dismissed/managed out (Stiglitz for criticising neoliberalism, Easterly for being rude about aid, while Ravi Kanbur left after unreasonable pressure to tone down his views on globalization), but if they are not too high profile, the Bank parks them on the fringe of the institution, depriving them of platforms and resources. In contrast, on-message economists like David Dollar get the full works, in terms of media promotion, airtime at major events etc etc.
What this produces is a knowledge system that is extraordinarily resilient to any attempt to move it from its current ideological direction. Even if the new(ish) boss has a more pluralist approach to life, the universe and economics, how much power does Jim Kim have to take on and vanquish this kind of entrenched establishment?
And of course, the Bank is immersed in a wider system involving economics faculties, journals and former pupils in positions of power, all of whom see themselves as guardians of the flame of orthodoxy. No wonder everyone from Queen Elizabeth to angry Manchester economics students is asking why inconvenient facts like the global financial crisis have had so little influence on the way the economics establishment thinks and (more importantly) advises others.
And in a spirit of even handedness, I should say that I recognize some of these mechanisms in play in NGO land too!
I sent this post over to Branko, who recently left the Bank, and here’s what he said:
‘I think that all these mechanisms as described by Robin were operational in 2006. I think (but I am not sure) that the situation is a bit better today. The main reason is that the dominant paradigm was seriously affected by the financial crisis, and even more by the persistence of low growth in Europe, as well by the rise of the previously unorthodox topics like inequality. In such conditions, I think, we have more of a “let a hundred flowers bloom” atmosphere than in 2006.
If I am right, the conclusion is that the paradigm shifts when the contrast with the observed reality becomes too big to ignore. And when it happens in the outside world, the Bank just cannot ignore it. A bit like the Kuhnian story of paradigm change.’
Robin Broad was less positive:
‘I wish I could be as optimistic, but alas, not much seems to have changed, or at least not in any significant way (although it is significant that Branko has left the Bank.) Your readers might also be interested in how the World Bank reacted to my research (from a subsequent piece in Development in Practice):
‘After the original, longer academic article on DEC appeared in a peer-reviewed academic journal, two gentlemen from the Bank contacted the journal’s editors. Although I was not privy to the communication, I gather that the gentlemen found my scholarship to be ‘poor’ and the journal’s review process wanting if such an article could be published. The editors (who had, in fact, overseen a rigorous review process) offered journal space for the two to rebut my article, with the understanding that I would then be given the customary academic opportunity to reply. But such open academic debate appears not to have been to the liking of the complainants – who feared, I infer, that it would give my article further prominence.’
So over to you – has the Bank changed (and you can comment anonymously, if you happen to rely on it for your mortgage)? Has social media led to greater pluralism (hey, I regularly appear on the Bank’s governance blog)? Are other aid/development institutions any better or worse?