More on think tanks

I like think tanks. Some of my best friends work for think tanks. I think they do a lot of good work. But the political policy ones do their best work when they are trying to decide policy within a movement; that's when you start seeing real innovative work. They are also very good at providing critiques of academic work in their areas of interest.

When they turn to fighting outsiders over, say, the minimum wage, the quality of their work sharply degrades. They have limited ability to change their policy position, because the donors will revolt; if they can't get an answer the donors will like, they don't ask the questions. They also only hire scholars who agree with them. That already biases their work, but then you have to contend with the groupthink problem: when everyone at the office agrees with you that your opponents are idiots, and you socialize mostly with other people in the movement, your thinking gets a tad lazy.

So if the only support for your positions comes from movement think tanks (plus maybe a few marginal academics), your position is probably extremely weak. Indeed, if someone from the other side were pulling the same trick, you would be the first to notice this. Independent studies commissioned by think tanks are especially suspect. You can't check their calculations, and survey design is easily manipulable to get the answer you want.

That's why I rarely grab, say, a Heritage or CEI study on the minimum wage and offer that as evidence for my claims. As it happens, on this issue I broadly agree with them. But even if I were willing to vouch for their numbers, it's pointless, because no one who disagrees with me would accept them. So I go to the BLS, the Census Bureau, the CBO, the JEC, the GAO, or an academic study instead. In cases where I can check some of their numbers, I'll use it as a secondary source. But it's never my primary source for a policy position.

Comments

...the BLS, the Census Bureau, the CBO, the JEC, the GAO...

Ok, now you are just trolling me. My original comment on this topic was pure snark, but:

I like the JEC. I think they do a lot of good work. But they are necessarily political in a way that these other organizations are not. They are great as a clearinghouse for other government data, but any analysis they put out needs to be read with one eye to who controls the committee. To pick a random example, a c. 1995 JEC is not any more likely to put out something conciliatory on the minimum wage than Heritage is.

Posted by bob | May 13, 2008 12:44 PM

Eh, you could argue the same thing about nearly any community self-selected on the basis of its habits of thought, from Congress to the faculty of your local college's Department of Gender Studies to your local school board.

Or, um, blog communities, huh? Wait long enough, and most blog comment communities become exemplars of groupthink.

Indeed, arguably your point is more urgent when it comes to this newfangled ability of the Internet to let anyone find the perfect online intellectual ghetto in which to dwell, free of the obnoxious influence of his wrong-thinking Real Life neighbors and colleagues. This has a far wider influence than intellectuals' mentally-incestuous citing of think tank reports. Maybe it even partially explains the unforgivingly vicious nature of modern political discourse.

Posted by Carl Pham | May 13, 2008 12:52 PM

Sometimes, it is good to be an old fart, like myself. I can remember the days when you could trust any think tank to be heterodox and self-critical. (Except Heritage, of course, which was always a whorehouse.) Think tanks were what happened when academic minds turned to the policy world.

Now? The policy academics are now mostly in academia. (This has not been good for universities, but is great for their funding.) All of the right-wing tanks are whorehouses, except for Cato, which merely suffers from Megan's groupthink.

Brookings (domestic policy division) and RAND remain reliable; the pinker thinktanks are more like Cato.

Posted by Joe S. | May 13, 2008 1:46 PM

I'm glad you brought this up (again) because I'm curious about your "primary source for a policy position" on school choice. What is your source? I don't want to go to a "biased" one again.

Posted by Susan of Texas | May 13, 2008 1:47 PM

Perhaps I am misunderstanding, but appears that your specific reference in this statement is meant to apply to the effects of the minimum wage on employment:

So if the only support for your positions comes from movement think tanks (plus maybe a few marginal academics)

Just for the record, neither David Card nor Alan Krueger is considered "marginal" by other academic economists, even the ones who have criticized their work on the minimum wage.

Each of these guys is considered a very prominent labor economist, and each has plenty of very influential published work on topics other than the minimum wage.

As for their minimum wage research, in my experience many of the economists, including the prominent ones, who have made the most hostile criticisms of Card & Krueger's minwage research are the ones who have the least expertise in empirical labor economics.

Again, maybe I misunderstood your reference. But if I didn't, I think your statement suggests you're a good bit less informed about the research on this issue than you seem to think.

Jonah Gelbach

Posted by jonah gelbach | May 13, 2008 2:41 PM

This was a general point. But Card and Krueger's work does not, for example, claim massive benefits from raising the minimum wage; they are careful to keep their claims extraordinarily modest.

Posted by Megan McArdle | May 13, 2008 2:55 PM

Wait a second. Does anyone argue (as a policy matter) that the reason why you want to raise the minimum wage is that it increases employment significantly? I thought the policy argument for the minimum wage was that it increases the amount of money minimum wage workers receive, and hasn't been shown to have a consistently significant effect on employment one way or the other.

This seems weird: But Card and Krueger's work does not, for example, claim massive benefits from raising the minimum wage; they are careful to keep their claims extraordinarily modest. Advocates for a higher minimum wage wouldn't be likely to make claims of "massive benefits" in the employment statistics, would they?

Posted by LizardBreath | May 13, 2008 3:12 PM

"I'm glad you brought this up (again) because I'm curious about your "primary source for a policy position" on school choice. What is your source?"-Susan of Texas

Here you go Susan. This link provides a summary and another link to the original paper. Caroline Hoxby, of Stanford University and the NBER, is one of the leading researchers on education reform. As she reports her findings:

The most intriguing evidence comes from three important, recent choice reforms: vouchers in Milwaukee, charter schools in Michigan, and charter schools in Arizona. I show that public school students' achievement rose significantly and rapidly in response to competition, under each of the three reforms. Public school spending was unaffected, so the productivity of public schools rose, dramatically in the case in Milwaukee.

No need to thank me. I'm happy to help.

Posted by rwe | May 13, 2008 3:21 PM

I'd appreciate knowing Megan's sources for Megan's opinion, not yours.

That study is from NBER, headed by Martin Feldstein, the CEO of AIG and mentor of Bush's Republican economic team. I know little about him, but can guess his political standing in this matter. I'd hesitate to accept possibly dubious think tank evidence.

Posted by Susan of Texas | May 13, 2008 3:35 PM

I *always* read Heritage documents.

They are some of the best testimonies to the inventiveness of mankind.

By the way, MM, does this mean that you are going to support - whatever that means, except as an intellectual exercise, I guess - the creation of more and better public statistics?

Statistics organizations need funding, support, and 'smart attention' to the innovations that they request (which often include getting additional legal mandates from Congress).

Of course, only wonk-world pays attention to them, so we end up facing important decisions on national health, for instance, with a lack of data that would help to guide the discussion. This lets the issue get demagogued to death, over and over, 1,000 times.

Posted by Amicus | May 13, 2008 3:52 PM

Susan, Hoxby is one of the premier researchers on school choice, and an extraordinarily well respected economist at a top department. She has taught at two "saltwater"--i.e., more liberal--departments, Harvard and Stanford, holding chairs at both. NBER is no longer headed by Martin Feldstein, and at any rate, being appointed to it is a professional honor that goes to both conservative and liberal economists. You cannot dismiss her as a hack. She is better respected in the profession than any other researcher I am aware of working on this topic.

Posted by Megan McArdle | May 13, 2008 3:55 PM

Genuine question: if political policy think tanks do their best work when they are trying to decide policy within a movement, when do political policy bloggers do their best work?

Posted by David Price | May 13, 2008 4:05 PM

In fact I do, Amicus; I think the government's primary regulatory role is transparency.

Posted by Megan McArdle | May 13, 2008 4:12 PM

No, Megan, nobody's dismissing her as a hack.

Posted by Susan of Texas | May 13, 2008 4:45 PM

Megan

Thanks for your reply.

My comment concerned your reference to "marginal academics" and the minimum wage. I think your response concerning C&K is a non-sequitur:

This was a general point. But Card and Krueger's work does not, for example, claim massive benefits from raising the minimum wage; they are careful to keep their claims extraordinarily modest.

I haven't followed all your blog posts that lead to this one, but you don't say in this post that you are discussing "massive benefits from raising the minimum wage". You just refer to the minimum wage and then write of supposedly marginal academics. I'm glad you agree that your characterization doesn't apply to C&K, but now I'm not sure of whom or what you're actually writing.

Moreover, I don't know whether it's helpful to say that C&K "are careful to keep their claims extraordinarily modest". What they do do is make claims that are supported by data.

For what it's worth, if increasing the minimum wage has zero disemployment effects, then there's a pretty strong case that doing so does have major benefits, at least if your goal is increasing economic welfare of low-wage workers. The people bearing the costs would be some combination of the owners of the firms paying higher wages and the customers paying higher prices. On average, redistributing from these folks to minimum wage workers would be considered a plus by those who typically support higher minimum wages.

In fact, even if there are disemployment effects, whether on average or only in terms of heterogeneity, increasing the minimum wage could still be a good policy from the point of view of its supporters. The question depends on who benefits, who loses, and how one values the gains to the winners and losses to the losers.

The common argument that minimum wage supporters would oppose it if only they understood economics just isn't right -- even under the textbook model of perfect competition, the issue is more complicated (I'm writing a principles of economics textbook at the moment, so this is something I've thought about a fair amount!)

Posted by jonah gelbach | May 13, 2008 4:50 PM

I'm not going to name names, but I'm sure that you and I can both think of policies that are only supported by a few ideological think tanks and a handful of marginal academics. I wasn't referring specifically to the minimum wage--support for it runs about 50-50 among economists last time I looked, largely because they think the boost outweighs the disemployment effects. But there are some stronger versions of the minimum wage, like the living wage, that are extremely marginal among academics. I've also yet to meet an economist who spoke well of labor and environmental standards on trade who was not either pretty marginal, or attached to a political candidate.

I don't think that minimum wage supporters would agree with me if only they understood economics. I think minimum wage supporters would agree with me if they properly thought through the moral implications of, as Greg Mankiw puts it:

1) A subsidy to low wage workers paid for by
2) A tax on employing low wage labor

But given that a large preponderance of the world disagrees with me about nearly everything, I can't really hold it against them. :)

Posted by Megan McArdle | May 13, 2008 7:07 PM

I wasn't referring specifically to the minimum wage--support for it runs about 50-50 among economists last time I looked...

Megan, that's not right. Robert Whaples surveyed economists in 2006 and found that 48% want the minimum wage eliminated while only 38% want it increased.

And, as Gary Becker points out, of the 35 living Nobel laureates in economics, only 5 were willing to endorse a minimum wage increase (a meager 14%).

So clearly at least a plurality of economists opposes any further increases in the minimum wage. And my sense is that support for the minimum wage is dropping again. While Card and Krueger caused a big stir (understandably, since they are very good economists), their results are increasingly being recognized as anomalous. The tide is turning against them.

Posted by rwe | May 13, 2008 7:45 PM

I cannot imagine what these survey results are meant to show, except who is a card-carrying candidate for 'for hire' economics.

The imputation is that "theorists agree", when, in fact, people could simply find no merit in the proposals on non-theoretical grounds (as Meagan points out, they may simply realize that the min wage is not quite the key policy issue that it once was in America).

The list goes on.

I propose new questions for PhD student survey:

1. "Do you believe there is a single best theoretical equation that describes the complete workings of the labor market?" If so, who has it.

That should produce a nice distribution of results, including a fair percentage for "I don't know, because I don't specialize in labor economics, much."

2. "Do you think that there is any role for empirical research into labor wage setting, or that theoretical models are really all that matter to developing economic understanding." That is, do they think that empirics has any role in amplifying which theories might be correct, or are real-world samples mostly for developing estimates of the theoretical constants that are "known" to exist.

I ask because of the alacrity with which *some* dismiss the Kreuger results... In science, it's the "anomalies" that often lead the way ...

Posted by Amicus | May 14, 2008 11:23 AM

Much of what Megan says--that think tankers tend to be intellectually lazy and that think tanks rarely produce new ideas--is right.

But she misdiagnoses the cause. The usual suspects--donations, groupthink--affect university academics as well. The groupthink problem at ideologically homogoneous American universities is obvious. And, while, university academics don't have the same donation pressure as think tank personnel, there are comparable pressures in the academcy. First, in certain fields many academics (particularly in practical areas like law or economics) work as consultants on the side, and most academics compete for grants (often by organizations with an ideological agenda), etc., and so face a similar push-pull tension between income and integrity. Second, academics face separate, distinct pressures to conform to received wisdom: obtaining tenure requires courting the good opinion and support of senior academics in the field, and to do that, a junior academic often most kow-tow to the senior person's work. Finally, the pressure to bring in donations does not cut in just one direction: given their lack of tenure, the pressure to generate donations gives think tankers a powerful continuing incentive to work hard at making waves in the policy community that many tenured academics lack. So the actual incentive effect of think tank donations is, actually, quite mixed.

The real source of the problem at think tanks is more complex: (1) think tanks do not replicae the academic peer-review culture of universities and that culture, for all its faults, does a reasonably good job of setting a standard of nuanced candid argument and analysis, including fair appraisal of the other side's argument; (2) the academy is seen as more prestigious (perhaps arbitrarily), with the result that even relatively mediocre universites can, on average, attract higher quality folks than D.C. think tanks (which is not to say that there aren't some really exceptional people working at think tanks); (3) think tank work tends to attract a certain kind of ideologically motivated person who either derives pleasure from self-identification with a political movement or has aspirations tending toward punditry--and such people are simply much more likely to be rigid and dogmatic and less interested in nuance or uncertainty.

Finally, at the end of the day, attacking think tanks for their inability to generate new ideas mistakes their role. Think tanks are not idea-generators or idea incubators--they are middle men in the marketplace of ideas. They comb academic work produced by others and distill it in Reader's Digest format for consumption by the D.C. political community (i.e. Congressional staff, who are not likely to invest the time to comb academic work for ideas with practical value that might attract the interest of people in the position to turn ideas into actual policy). Put another way, think tanks are marketers of ideas, not idea generators. And they do a pretty good job in that modest capacity.

I'd note, finally, that its simply wrong to say that only "marginal" academics are attached to think tanks. In the legal field, at least, some of the very top right-of-center legal scholars collaborate with both Heritage and Cato. (And, of course, there are also more marginal academics who collaborate, as well). These folks work with Heritage or Cato because they recognize the marketing value of think tanks, whose PR departments and ties to major op-ed pages and network news programs is vastly superior to those of even many well-regarded universities. The association has some real reputational costs--there are a number of top flight academics who religiously stay away from think tanks for that reason--but a number of high level folks make the reasonable bet that the cost of doing business with think tanks is outweighted by the palpable marketing benefit they provide.

Posted by Anonymous | May 16, 2008 12:51 PM

Much of what Megan says--that think tankers tend to be intellectually lazy and that think tanks rarely produce new ideas--is right.

But she misdiagnoses the cause. The usual suspects--donations, groupthink--affect university academics as well. The groupthink problem at ideologically homogoneous American universities is obvious. And, while, university academics don't have the same donation pressure as think tank personnel, there are comparable pressures in the academcy. First, in certain fields many academics (particularly in practical areas like law or economics) work as consultants on the side, and most academics compete for grants (often by organizations with an ideological agenda), etc., and so face a similar push-pull tension between income and integrity. Second, academics face separate, distinct pressures to conform to received wisdom: obtaining tenure requires courting the good opinion and support of senior academics in the field, and to do that, a junior academic often most kow-tow to the senior person's work. Finally, the pressure to bring in donations does not cut in just one direction: given their lack of tenure, the pressure to generate donations gives think tankers a powerful continuing incentive to work hard at making waves in the policy community that many tenured academics lack. So the actual incentive effect of think tank donations is, actually, quite mixed.

The real source of the problem at think tanks is more complex: (1) think tanks do not replicae the academic peer-review culture of universities and that culture, for all its faults, does a reasonably good job of setting a standard of nuanced candid argument and analysis, including fair appraisal of the other side's argument; (2) the academy is seen as more prestigious (perhaps arbitrarily), with the result that even relatively mediocre universites can, on average, attract higher quality folks than D.C. think tanks (which is not to say that there aren't some really exceptional people working at think tanks, who could easily succeed in the academy); (3) think tank work tends to attract a certain kind of ideologically motivated person who either derives pleasure from self-identification with a political movement or has aspirations tending toward punditry--and such people are simply much more likely to be dogmatic, or, more charitably, less interested in plubming the nuance of arguments or uncertain areas of policy debates.

Finally, at the end of the day, attacking think tanks for their inability to generate new ideas mistakes their role. Think tanks are not idea-generators or idea incubators--they are middle men in the marketplace of ideas. They comb academic work produced by others and distill it in Reader's Digest format for consumption by the D.C. political community (i.e. Congressional staff, who are not likely to invest the time to comb academic work for ideas with practical value that might attract the interest of people in the position to turn ideas into actual policy). Put another way, think tanks are marketers of ideas, not idea generators. And they do a pretty good job in that modest capacity.

I'd note, finally, that its simply wrong to say that only "marginal" academics are attached to think tanks. In the legal field, at least, some of the very top right-of-center legal scholars collaborate with both Heritage and Cato. (And, of course, there are also more marginal academics who collaborate, as well). These folks work with Heritage or Cato because they recognize the marketing value of think tanks, whose PR departments and ties to major op-ed pages and network news programs is vastly superior to those of even many well-regarded universities. The association has some real reputational costs--there are a number of top flight academics who religiously stay away from think tanks for that reason--but a number of high level folks make the reasonable bet that the cost of doing business with think tanks is outweighted by the palpable marketing benefit they provide.

Posted by Anonymous | May 16, 2008 12:54 PM

Much of what Megan says--that think tankers tend to be intellectually lazy and that think tanks rarely produce new ideas--is right.

But she misdiagnoses the cause. The usual suspects--donations, groupthink--affect university academics as well. The groupthink problem at ideologically homogoneous American universities is obvious. And, while, university academics don't have the same donation pressure as think tank personnel, there are comparable pressures in the academcy. First, in certain fields many academics (particularly in practical areas like law or economics) work as consultants on the side, and most academics compete for grants (often by organizations with an ideological agenda), etc., and so face a similar push-pull tension between income and integrity. Second, academics face separate, distinct pressures to conform to received wisdom: obtaining tenure requires courting the good opinion and support of senior academics in the field, and to do that, a junior academic often most kow-tow to the senior person's work. Finally, the pressure to bring in donations does not cut in just one direction: given their lack of tenure, the pressure to generate donations gives think tankers a powerful continuing incentive to work hard at making waves in the policy community that many tenured academics lack. So the actual incentive effect of think tank donations is, actually, quite mixed.

The real source of the problem at think tanks is more complex: (1) think tanks do not replicae the academic peer-review culture of universities and that culture, for all its faults, does a reasonably good job of setting a standard of nuanced candid argument and analysis, including fair appraisal of the other side's argument; (2) the academy is seen as more prestigious (perhaps arbitrarily), with the result that even relatively mediocre universites can, on average, attract higher quality folks than D.C. think tanks (which is not to say that there aren't some really exceptional people working at think tanks, who could easily succeed in the academy); (3) think tank work tends to attract a certain kind of ideologically motivated person who either derives pleasure from self-identification with a political movement or has aspirations tending toward punditry--and such people are simply much more likely to be dogmatic, or, more charitably, less interested in plubming the nuance of arguments or uncertain areas of policy debates.

Finally, at the end of the day, attacking think tanks for their inability to generate new ideas mistakes their role. Think tanks are not idea-generators or idea incubators--they are middle men in the marketplace of ideas. They comb academic work produced by others and distill it in Reader's Digest format for consumption by the D.C. political community (i.e. Congressional staff, who are not likely to invest the time to comb academic work for ideas with practical value that might attract the interest of people in the position to turn ideas into actual policy). Put another way, think tanks are marketers of ideas, not idea generators. And they do a pretty good job in that modest capacity.

I'd note, finally, that its simply wrong to say that only "marginal" academics are attached to think tanks. In the legal field, at least, some of the very top right-of-center legal scholars collaborate with both Heritage and Cato. (And, of course, there are also more marginal academics who collaborate, as well). These folks work with Heritage or Cato because they recognize the marketing value of think tanks, whose PR departments and ties to major op-ed pages and network news programs is vastly superior to those of even many well-regarded universities. The association has some real reputational costs--there are a number of top flight academics who religiously stay away from think tanks for that reason--but a number of high level folks make the reasonable bet that the cost of doing business with think tanks is outweighted by the palpable marketing benefit they provide.

Posted by Untenured Academic | May 16, 2008 12:54 PM