Should-Read: From four years ago. Interesting that in Dan’s view Beltway types have neither the speed of analysis of the money people nor the depth of knowledge of the academics, and in fact have no strengths at all—unless you want to claim that its major additional weakness, groupthink, is also a strength. The major weaknesses of the other two are nicely phrased: money types tending to oversimplify, and academics to overcomplicate: Dan Drezner (2014): What Nick Kristof Doesn’t Get About the Ivory Tower: “Three tribes that dominate the discussion of foreign affairs—academics, Beltway types and money folks…

…Whenever a new issue crops up on the radar, it’s usually the likes of Goldman Sachs or the McKinsey Global Institute that often puts out the first substantive analysis…. Data also gets at the heart of the other comparative advantage of the money folk: they can deploy it the most effectively to make their case. Management consultants figured out the power of graphs and charts long before Ezra Klein or Business Insider appeared on the scene…. Market folk excel… in finding the one number, metric or chart that will capture the attention of the audience, the “takeaway” stat.

The biggest strength of academics who take an interest in policy is their deep background and substantive knowledge of the subject at hand… [and so] can avoid the really God-awful choices, because they’re burdened with the knowledge of all the things that can go wrong. It’s not a coincidence that a much larger fraction of academics opposed Operation Iraq Freedom than D.C.-based policy wonks. Academics are the best at playing Whac-a-Mole with the unending analogies…. Beltway and market folk like to disdain theories as abstract and unrealistic. Of course, these tribes then go on to articulate their own implicit theories… “analogies” or “rules of thumb” or “granular analysis” or “projections.” Academics… are more capable of recognizing when those theories will be falsified–and when we need to cast about for new models….

It is in their weaknesses that each tribe really becomes distinctive:

Market analysts, for example, are prone to “chartism” in their forecasts. Chartists look for regular patterns in their data to develop short-term predictions… over-interpret random movements… [and], because they are convinced that they have found a True Predictor, they will evangelize its value far beyond its real worth…. Market participants are usually pretty adept at identifying the economic pressures…. It is predicting those how politicians will react to those pressures where the consultants and traders fall down… constantly surprised at the bargaining failures that kept recurring. Politicians have different incentives than market participants–a fact that sometimes escapes them when they think about the world….

One of the Beltway tribe’s greatest strengths is also one of its greatest weaknesses: groupthink. As I noted before, a Beltway consensus actually counts for something in the world of international policymaking. That does not mean that this consensus emerges from any solid analysis, however. For example, a hidden cause of the enthusiasm for austerity in Washington that crested in 2010 was the consensus among foreign policy pundits that U.S. debt was spiraling out of control, rendering Washington vulnerable to foreign holders of U.S. Treasuries. This groupthink formed at the same time that the budget deficit as a percentage of output was shrinking at the fastest rate in American history. By the time the consensus had emerged, however, the change in the facts didn’t matter. Since the principal activity of Beltway folk is to talk to each other, the result is a feedback loop of confirmation bias that eventually leads to epistemic closure….

The biggest academic weakness is… [that] what is… useful is telling policymakers facts that seem obvious to academics. It’s the settled wisdom in the academy, the “blinding glimpse of the obvious,” that often needs to be disseminated to policymakers…. [But] academics…are often unaware that what seems obvious to them is not obvious [to] all…

April 9, 2018


Brad DeLong
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