Two economic graduate students affiliated with Duke’s Center for the History of Political Economy have just released a new working paper on the history of quasi-experimental methods in economics. Panhans and Singleton document the dramatic takeoff of the use of techniques like regression discontinuity, difference-in-difference, and instrumental variables in the top economics journals, and most of its subfields. The paper’s a nice introduction to this history, and for readers unfamiliar with the older approaches, sets up a nice quick contrast between a 1970s “structural” approach to the returns to education vs. a 1990s “quasi-experimental” approach. What really struck me, though, was an ending reflection on the nature of economic imperialism.
Panhans and Singleton return to a 1984 article by Stigler on the nature of economic imperialism. Stigler argued that economists had entered four new fields, including history, law, politics, and sociology, and they had brought with them the Chicago doctrine of rationality, e.g. “Marriage is viewed as a rational act by which the partners seek to maximize their incomes relative to remaining single or choosing different mates” (Stigler 1984: 308, cited on p. 20). Panhans and Singleton note that the contemporary discipline of economics has continued its tackling of diverse subjects previously found in other fields, but that the narrow emphasis on maximizing behavior characteristic of the old economic imperialism is gone. They write:
From a superficial point of view, Stigler’s predictions appear prophetic. Not only has work by economists in the applied areas of crime, education, and politics expanded greatly, in large part marking “the applied turn,” the fields of health and development economics are today at the forefront of the profession in prestige and the public view. Further, the disciplinary interactions and applied orientation have been institutionalized in schools of public policy, applied economics, public health, and others that train graduate students for academia, industry, and government and recruit researchers from multiple disciplines. However, there appears to be a key distinction with how this imperialism proceeds: rather than the application of a behavioral model of purposive goal-seeking, “economic” analysis is increasingly the empirical investigation of causal effects for which the quasi-experimental toolkit is essential. To return to Stigler’s analogy, the missionary’s Bible is less Mas-Colell et al. (1995)* and more Mostly Harmless Econometrics (Angrist and Pischke 2009).
What do you think? And if Panhans and Singleton are right, what does that mean for debates about the relationship of sociology (or political science, etc.) to economics? Do we have much to fear if most of what economists bring to the table are a fancy, but easily borrowable, set of quasi-experimental tools for analyzing the questions we were already asking? What are the consequences of this new empirical imperialism?
* The dominant textbook for graduate microeconomics.