Bryan Caplan  

Ability, Morality, and Prosperity: A Paper and a Report

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I first crossed paths with my future debate partner, the noble David Balan, when the AER asked me to referee his paper on ability, morality, and economic performance.  The AER ignored me of of course, but years later, a much-revised version of the paper (now with co-author Steve Knack) is near acceptance.  The key idea: For productive workers, more ability causes more prosperity.  But for rent-seekers, more ability causes less prosperity.  If we equate "morality" with "distaste for rent-seeking," we can conclude that prosperity is strictly increasing in morality, but actually has an ambiguous connection to ability.

The paper's changed a lot over time; hopefully some of my original suggestions ended up improving the piece.  But you can judge for yourself.  Here, with David's permission, is my original referee report.


Referee Report on "On Morality and Economic Performance"

This piece starts with the premise that taste for moral behavior is heterogeneous.  If we interpret "morality" as "distaste for rent-seeking," we can derive some interesting conclusions.  Economic performance is unsurprisingly increasing in morality.  But counter-intuitively, performance is not necessarily increasing in ability.  The reason is that higher ability levels raise performance in both the productive and the rent-seeking sectors.  It turns out that the morality of high-ability people is especially critical.  The article ends with applications to development economics, school vouchers, and higher education.

This is an interesting piece.  The conclusion that greater ability may be counter-productive is especially intriguing.  But the article can be significantly improved.  This is particularly true for the applications.

School vouchers seem like a particularly poor choice.  Is there any empirical evidence that graduates of private schools exhibit lower levels of morality than graduates of public schools?  I would suspect the opposite, though admittedly there is a selection problem.  But that selection problem itself cuts against the thesis, for it suggests that parents who send their children to private school DO want to inculcate morality.  One plausible explanation is that the externalities of morality are largely infra-marginal.

Furthermore, it appears that a significant part of the values taught in public schools actively encourage and even glorify rent-seeking.  Approved history texts normally treat the adoption of new redistributive legislation as a social gain.  Probably the most value-laden topic in modern public schools is environmentalism, the main thrust of which is to make children enthusiastic supporters of strict environmental regulations regardless of their efficiency.

This holds a fortiori for higher education.  University students are frequently exposed to moral rationalizations for rent-seeking.  Other than a few economist/preachers (as Stigler might put it), who is trying to convince students that rent-seeking is a social ill?

It is also odd that on the one hand, the author takes a dubious view of able people "close to the regime" in Third World countries, but simultaneously takes a favorable few of keeping education close to the regime via centralization.  This seems likely to lead to inculcation of the view that true immorality consists in opposition to or criticism of government leaders.

A couple more detailed comments:

1.  (p.5)  Even if centralizing education helps solve the intra-national externality problem, it runs the risk of making the inter-national problem worse.  This is well-expressed in historians' theme of "peasants into Frenchmen": centralized public education builds a national identity, perhaps reducing conflict among Frenchmen, but intensifying conflict between the French and other nations.

2.  (p.22)  The author might want to cite Hayek's famous chapter on "why the worst get on top."

Overall, this is a very well-motivated and interesting theory paper.  But there must be less debatable ways to illustrate its empirical relevance.


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COMMENTS (6 to date)
David J. Balan writes:

Did you ever tell me before that you wrote that referee report? I don't think I knew that until right now! And your comments definitely did change the paper. Pretty much everything you didn't like is no longer there. What is there now is some empirical evidence, thanks to excellent co-author Steve Knack from the World Bank.

Thanks for blogging it!

Student writes:

As someone trying to get published in an economics journal, it was nice to read an actual referee report. Thanks for sharing this.

Chris Koresko writes:

Student: As someone trying to get published in an economics journal, it was nice to read an actual referee report.

You should be writing referee reports, too. Do that with help and oversight from your thesis advisor until you have enough experience to be confident on your own. If you ask, your advisor will probably tell you he's had a manuscript on his desk for months that some journal has been pestering him about, and he'd be glad to give you a crack at it.

Writing these reports is excellent preparation for writing your own papers, and a good service to the academic community as well.

Student writes:

Thanks for the advice, but unfortunately I have no thesis advisor--I'm not presently attending a college. Is there any feasible way of contacting professors or journals and offering my services?

Chris Koresko writes:

Student: ...I have no thesis advisor--I'm not presently attending a college. Is there any feasible way of contacting professors or journals and offering my services?

Have you considered trying to get a job at one of the journals you're interested in?

I don't have any specific advice to offer with regard to contacting profs, but it probably can't hurt to send an email. I'd guess that most academic profs won't accept an offer to help with referee work -- they'll prefer to devote their attention to their students -- but it's possible one of them will give you better advice than I can on how to advance your education and career.

Student writes:

Thanks for the advice. I hadn't thought about getting a job at a journal, but I'll definitely look into that now.

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