Sunday, 9 August 2015

Does education in economics make politicians corrupt?

There is a fair amount of evidence that economics students behave differently in laboratory and field experimental settings. Studies often find that economics students act more rationally, are less altruistic, and less pro-social. However, it is difficult if not impossible to tell whether it is economics that causes students to be less pro-social, or whether less pro-social people are more likely to choose to study economics. Moreover, people may act differently in experimental settings than they do 'in the real world'. Which means that finding real-world tests for whether economics leads to less pro-social behaviour important.

Back in April, Tyler Cowan at Marginal Revolution pointed us to this paper by Rene Ruske (University of Muenster), entitled "Does Economics Make Politicians Corrupt? Empirical Evidence from the United States Congress" (sorry, no ungated version). Since corruption can be considered not-pro-social behaviour, I thought this paper might give us some insight. Unfortunately, the paper doesn't actually answer the question in the title. And neither does it necessarily tell us anything about economics at all.

This is because of the methods that have been employed. First, Ruske takes data on the 695 members of the 109th-111th U.S. congresses (2005-2009), on their corrupt behaviour (taken from a dataset compiled from CREW (PDF)), and on their higher education degrees (the data don't seem to be available online any more). She then essentially compares the degrees of corrupt politicians with the non-corrupt politicians (controlling for other demographic characteristics). The first problem is that the data is purely correlational - it can only show whether politicians with economics degrees engaged in more or less corruption than those with other degrees, but it can't tell us whether the relationship is causal. Maybe more easily corruptible people tend to take economics majors? Or maybe politicians with economics majors are presented with more opportunities for corruption? Or maybe politicians with economics majors are less adept at hiding their corrupt behaviour? To her credit, Ruske doesn't claim that the relationship is causal - except in the title to her paper, which is at best misleading.

Second, she isn't looking at economics degrees at all. She combines economics with business administration. Given that a lot of senior business people and politicians have MBAs, and MBAs are not an economics degree, then the results of the paper tell us little about the relationship between economics and corruption. Instead, maybe they show the correlation between business degrees and corruption instead. So it is disingenuous to claim that the results say much about economics or economists.

Maybe sometime in the future we could randomise students into economics classes and then follow up later with those that become politicians? However, it's likely that the self-selection into politics would still create a problem.

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