Jeremy Wallace

While blinking from the sunlight that enveloped me during one of the rare moments when I allow myself to come up from the “finish-the-book” cave, I happened upon a conversation about the relative importance of ideas and interests in political economy. Dani Rodrik’s column from last year, and then again from last month, sparked the discussion.  He began his earlier piece:

“The most widely held theory of politics is also the simplest: the powerful get what they want.”

Going on to critique the notion, he puts forward that ideas shape interests.

Yet this explanation is far from complete, and often misleading. Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas.

As Phil Arena pointed out at the Duck of Minerva, Rodrik is setting up a bit of a straw man in arguing that there are those who think that ideas mean nothing.

Here’s what I consider the key point: if you were to ask a room full of undergrads to rank on a scale from 1 to 10 how much room there is for us to change the world through advocacy campaigns, op-eds, blogs, and other expressions of our ideas, the average answer is almost certainly going to lie well above the one political economists would provide.  I strongly suspect it would lie above the one Dani Rodrik would provide, though I confess I have no way of knowing that for sure.  If you repeat the exercise with social science grad students and faculty, you might get responses a bit closer to Rodrik’s (which I suppose may even be the true value, though the fact that he’s transparently engaged in motivated reasoning makes me pretty uncomfortable), but I just don’t see the evidence that the primary task before us is to convince people that they underestimate their ability to transform the world.  There’s a good case to be made that we face the opposite problem.  Sure, if we ever reach a point where most people (or most social scientists at least, who I guess we can count as people) believe that structure is everything, that none of our actions have any meaning, I’ll join Rodrik in calling for a move away from political economy.  But we’re, um, pretty not there.  Like, really really not there.

Where I would take issue with Arena is in the difference between our scholarship and our actual attitudes and beliefs. Political economists likely would respond to questions as he described, but if one looks at the literature, particularly the quantitative literature, there is little to no incorporation of ideas or ideology in the models that we use to account for variation in the political world.

The reason for their lack of incorporation is put forward by Moonhawk Kim:

I’m amenable to the ideas that ideas are a key source of change in political economy. The trouble is how to analyze them. Any ideational theories most likely require some methodological wholism, in which individual actors are not the sole ontological unit. Ideas are collective phenomena and those that are not are not interesting. This is clearly at odds with the predominant although possibly waning focus on experimental methods in political economy. A relevant critique of this methodological approach—although coming from a very different angle—is Oatley’s “The Reductionist Gamble”. Some phenomena and their explanations cannot be reduced to the actors level. Beyond this banal critique, however, I do not have any magical methodological approach for analyzing ideas. But a systematic and rigorous way to studying them will provide the next methodological wave and ameliorate Rodrik’s concerns that political economic analyses do not provide useful policy levers.

After the latter piece went viral, Rodrik posted on his blog:

But what I have found missing in all this literature is an overarching framework that parses out the respective contributions of ideas and interests, without necessarily giving supremacy to one or the other. What is also missing is empirical work (“systematic empirical evidence” as an economist would call it) that takes this approach to the data.

A fascinating research agenda. Stay tuned.

As it so happens, in these fleeting moments when I am not sanding down the rough edges of my book, I think about the ways in which the measures that we use in the study of political economy can fail us (where us can be scholars, investors, leaders, statistical bureaus, future historians, revolutionaries, etc). 

I have a paper on one example of this, the political manipulation of GDP growth estimates by subnational officials in China. Spelling out the logic can, hopefully, show the connection:

1. the CCP regime believes that by improving the lives of the citizenry its rule will be legitimized and they will remain in power,
2. to encourage local government officials to pursue economic growth, the central party makes achieving high levels of GDP growth part of one’s annual assessment which in part determines promotion decisions,
3. local government officials pursue normal political business cycle behavior to boost growth numbers but also perhaps juke the stats to get ahead in the promotion tournament.

The party’s idea that performance legitimacy is the correct political strategy for it to pursue leads it to create metrics that define the interests of subordinate officials in ways that affect their behavior, in ways intended and unintended.

Of course, the central party learns over time that the rules of the game are being broken by the players. Officials like Li Keqiang, the new premier, explicitly refer to the idea that “man-made statistics” like GDP aren’t to be trusted and instead relies on other statistics that are perhaps less likely to be manipulated. Yet if the leadership knows (or suspects) that manipulation is taking place, then why doesn’t it punish the rule-breakers? First, it likes the results that are coming about and sees no real need to go after the cheaters (a.k.a. steroid era baseball). Second, it’s a test of political sophistication. Do local officials know what is and is not permissible? Promotions should go to those who meet the metrics but especially those understand what the metrics are attempting to assess, ability to accomplish tasks set forward by the regime. As the game iterates, smart players take advantage.

Assessing the changing quality of assessment and measurement is the first bite of the whale of the ideas and interests that I hope to devour.

A final thought before I crawl back to the book cave, Rodrik compares the growth-pursuing strategies of East Asian dictators with the kleptocratic and crony-supporting leaders of the Middle East. China under Mao, of course, cared nothing of GDP growth. Only under Deng did the regime’s ideas about the nature of its interests change. This is the big question, and for now, it remains that–a question.

Or, in fact, many questions, such as: What is an acceptable change for a leader? What is the range of the permissible? What is beyond the pale? Does Deng move to highlight the contrast with the Maoist Hua Guofeng, who at the time was his primary elite competition for control of the party? Would Deng have done anything else had he had his druthers? What ideas were percolating in the mind of this Sichuanese who had his political awakening in France under the tutelage of Zhou Enlai? Where did these ideas come from? Would the CCP have moved towards reform or reform-ish policies absent Deng?