Preventing Economists' Capture

From a paper by Luigi Zingales

Most academic economists are very honest people, who chose their career because they were motivated by noble goals, like the quest for the truth and “making the world a better place”. Yet, the same can be said for the regulators. So why academic economists think that the regulators are generally captured, while they cannot stand even the thought that this might happen to one of them? This time we are different?

The purpose of this article is to highlight the parallelism between the forces that we use to explain regulatory capture and the ones that can capture economists. Unless we economists are made of a different fabric of the regulators, I do not see why we should not be subjected to the same kind of pressures.

Based on the analysis of these forces, I discuss several mechanisms to can help prevent (or reduce the effects of) capture: from a reform of the publication process, to an enhanced data disclosure, from a stronger theoretical foundation to a mechanism of peer pressure. Ultimately, the most important remedy, however, is awareness of the problem, an awareness most economists still do not have.