Friday, July 19, 2013

Money, research, and politics: Murphy and Boxer

Two Prefaces

Let me preface this by reminding people that the other day I praised Bob Murphy's written testimony for his Senate hearing. I only ribbed him a little for knocking the published social cost of carbon estimates for not being sufficiently nationalistic (and I honestly am curious about why he did that and why he didn't use the opportunity to rebuke the OMB for making that recommendation in the first place - but that's small potatoes). In the best possible way it was actually extremely boring analysis: discount rates and who's costs you count matter a lot when evaluating costs and benefits. We all know this! But good solid analysis is often lacking in Washington, which is why it's so important for people like Bob to keep reminding politicians of these sorts of things.

Let me also preface this with a quick statement of my views on Koch funded people before you try twist this into me saying something I'm not. I have happily defended Koch funded researchers on numerous occasions. This is a nice post that collects several of these instances with a summary of my views with a defense of (1.) Bob, (2.) Dan Klein, (3.) Don Boudreaux, and (4.) GMU faculty generally. I've competed for Koch money myself, actually (I didn't get it, unfortunately). So I don't think the Koch brothers are some evil empire and you can't trust the people it funds. I do think they provide resources to people that are already on the same page as them, that in many cases they are promoting bad ideas, so Koch is a "bad influence" in the sense that it gives bad ideas more influence. Of course the Koch brothers promote a lot of good ideas too (I wouldn't have gone after some of their money if they didn't!).

Money, research, and politics

Something people have been talking about on facebook and in blog posts is the fact that in the hearing that Bob participated in, Sen. Barbara Boxer raised the issue of the funding sources behind IER (Bob's organization) as well as the other Republican witnesses. As with a lot of non-profits that choose to keep donors under wraps, IER's funding is a bit of a mystery. It's clear that they've gotten a lot of money from the Koch brothers, from Exxon, and from KBR (former subsidiary of Haliburton with big contracts in Iraq that has been accused of corrupt practices - if you're wondering why that made the list with Exxon and Koch). The numbers I've seen reported from these organizations still leaves a lot of the funding sources unidentified.

Boxer noted that it was fine that they got money from these sources but that she thought that information was important for people to know, particularly given the scientific consensus on climate change.

I agree (on both counts - that it's fine to take money from energy companies and military contractors and that it's important to know where you're getting money to do research) and I think it's a big mistake for people to treat this like some kind of cheap-shot from Boxer.

I really hope I'm stating the obvious here. Imagine if you wrote a report paid for by the local Chamber of Commerce arguing that local businesses were financially sound after recent negative publicity. Shouldn't you disclose that the Chamber of Commerce funded the report? It's not a question of whether you were objective as a researcher or not - there's a potential conflict of interest here and you ought to disclose it. Bob Murphy made this very point with respect to Fred Mishkin. I agreed with him on that (although I pointed out that "Icelandic Chamber of Commerce" was emblazoned on the front of the report). Now what the best form of disclosure is depends on the funding structure of the organization you're working for obviously. I think everyone knows what a "Chamber of Commerce" is. It's clear what the conflict of interest is. "Institute for Energy Research" is a pretty vague name. It could be a liberal group, a libertarian group, or it could have nothing to do with politics. I'd say disclosure would probably require more details in that case, because you don't know what the potential conflict of interest is just by saying you were paid by IER. Maybe we could argue the point, but we should all agree about how critical disclosure is for research.

Reporting potential conflicts of interests is important because this is how crony capitalism and regulatory capture happen. I don't think Bob would have any trouble recognizing this if it were Goldman Sachs bankrolling studies advocating more quantitative easing from innocuous sounding policy organizations holding conferences at luxury hotels in Washington. I don't understand why this is so controversial with energy companies doing the exact same thing.

The point isn't that any of these researchers are doing anything wrong. Like I said, Bob reported some pretty standard stuff. I'd have to review tape, but I feel fairly confident saying that I agreed with every word that came out of Bob's mouth at the conference and every word of his written testimony*, and I'm positively disposed towards carbon taxes. It was not radical stuff and that's not the problem. The problem is the potential for bad actors that are just hired guns for special interests, and particularly when this research is being presented in Washington the problem is that if this is a public debate it's important to keep the discussion open and honest.

A lot of funding sources people disclose are large, innocuous, philanthropic organizations that don't have much of an agenda - the big names you hear on PBS and that sort of thing. They still need to be disclosed on research precisely to foster this kind of open environment where conflicts of interest are identified.

This is the double-edged sword of non-academic policy research. You've gotta grub for money (academics do too, but often with a different sense of urgency) and you've gotta speak to practical policy debates. You can feel like you're doing a lot of good because you are providing objective research to an often irrational fight but you are also in a world of big stakes, and big stakes means that people who dip their toes into this world need to keep from being co-opted by special interests. One solution to that is being an open book when it comes to funding and influence.

Washington think tanks are an interesting mix of science and advocacy. I like to stay more on the science side of things, but there are a lot of smart people that value advocacy too, and they're worth working with and paying attention to. But scientists and advocates in Washington don't have symmetric interests in the think tank world. Advocates don't mind blurring the line with scientists at all. But if you care about the science it's critical (for your reputation if nothing else) to make a distinction between the two. It's fine to do advocacy, just keep the two distinct.

*- I know there was at least one word in his oral testimony I disagreed with: when he called SCC estimates "dubious"... not sure I would say that.


  1. Sen. Barbara Boxer raised the issue of the funding sources behind IER (Bob's organization) as well as the other witnesses.

    I think the last two words of your sentence should be amended to "other Republican witness."

    1. Changed.

      I skipped to your testimony and then her immediate commentary. She mentioned insurance companies - I figured they were the other witnesses but honestly I didn't know the lineup.

      Presumably this is something that matters for anyone to her, but I added "Republican" - in any case it wouldn't be wrong to add Republican, so why not :)

  2. Well the reinsurance guy was her witness. The lady from the Manhattan Institute was not. Boxer specifically impugned the motives of the Mnahattan lady and me; I definitely don't recall her insinuating that we needed to be skeptical of the other 3 witnesses with whom she agreed.

  3. I'm sure she asks the same questions of all the Democrats who testify in favor of the policies she is in favor of, right? Weird how that escapes your attention...


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