Following heavy scrutiny of economists' conflicts of interest before the financial crash of 2008, the American Economic Association has adopted new guidelines at its annual meeting here that require scholars to divulge who supports the research they publish in the association's journals.
The statement of principles (see below), as it is technically known, was adopted unanimously on Thursday by the executive committee of the association after a private and "spirited discussion," said Orley C. Ashenfelter, a professor of economics at Princeton University and president of the association. It will go into effect over the course of the year.
The guidelines came about after harsh criticism, most pointedly in the movie Inside Job, that academic economists accepted payment from and took seats on the boards of directors of businesses and, in some cases, governments without disclosing it. The economists' analyses often touted those groups' interests in what otherwise appeared to be disinterested scholarly papers and public commentary.
Voices from within the discipline have also been critical. Gerald A. Epstein, a professor of economics at the University of Massachusetts at Amherst, analyzed the public comments and scholarly writings of 19 prominent economists in the years leading up to and including part of the Great Recession.
He found that 13 had done work for private firms, and some had served on their boards of directors or had held leadership posts. Only one of the economists consistently noted those affiliations when speaking and writing publicly.
Under the new guidelines, economists and their close relatives and partners must name the interested parties who financially support the articles they submit to the association's seven journals. If no such support exists, or if the author is bound by a nondisclosure agreement, those facts also must be noted.
Significant financial support is defined as $10,000 or more over the previous three years, and it can take the form of consulting fees, retainers, grants, and in-kind support, including access to data. Authors must also disclose whether they hold paid or unpaid positions with any group that is interested in their research.
The guidelines also define the term "interested party" when describing the sources of support. It is any person, group, or organization that has "a financial, ideological, or political stake related to the article."
Authors must say whether any of those sources had the right to review the paper before its submission. Once the article is published, the relevant conflicts of interest will be made public.
While the guidelines apply only to the seven journals published by the association, the group also urged economists to follow the guidelines in other venues, including other scholarly journals, media commentary, and legislative testimony.
This effort at broader moral suasion in the field is "fundamentally important," said George F. DeMartino, a professor of international economics at the University of Denver and author of The Economist's Oath: On the Need for and Content of Professional Economic Ethics (Oxford University Press, 2011). It will help create an expectation of disclosure, not just among economists but also for policy makers and journalists who refer to the research the scholars produce, he said.
While he lauded the new guidelines as an important first step, Mr. DeMartino said they fell short of what was needed to change economists' ethics. For example, the guidelines are silent on whether economists should avoid conflicts of interest in the first place, he said.
Scholars in other social-science disciplines have wrestled with the implications of their work for the people who are affected by their advice and policy analyses, he added. Similar thinking should be brought to economics, he said, because economists' recommendations often have real effects on people's lives and welfare, creating winners and losers.
"Economics is in the harm business," he said, "but we don't wrestle with the ethical implications."
STATEMENT OF PRINCIPLES
Chicago, January 5, 2012
At its meeting today, the Executive Committee of the American Economic Association adopted extensions to its principles for authors’ disclosures of potential conflicts of interest in the AEA’s publications. The added principles are:
- Every submitted article should state the sources of financial support for the particular research it describes. If none, that fact should be stated.
- Each author of a submitted article should identify each interested party from whom he or she has received significant financial support, summing to at least $10,000 in the past three years, in the form of consultant fees, retainers, grants and the like. The disclosure requirement also includes in-kind support, such as providing access to data. If the support in question comes with a non-disclosure obligation, that fact should be stated, along with as much information as the obligation permits. If there are no such sources of funds, that fact should be stated explicitly. An “interested” party is any individual, group, or organization that has a financial, ideological, or political stake related to the article.
- Each author should disclose any paid or unpaid positions as officer, director, or board member of relevant non-profit advocacy organizations or profit-making entities. A “relevant” organization is one whose policy positions, goals, or financial interests relate to the article.
- The disclosures required above apply to any close relative or partner of any author.
- Each author must disclose if another party had the right to review the paper prior to its circulation.
- For published articles, information on relevant potential conflicts of interest will be made available to the public.
- The AEA urges its members and other economists to apply the above principles in other publications: scholarly journals, op-ed pieces, newspaper and magazine columns, radio and television commentaries, as well as in testimony before federal and state legislative committees and other agencies.