Andrei Shleifer Speaks at George Mason University!

Andrei Shleifer, the world's top economist by citation, spoke at George Mason University.  He presented the paper, "Education and the Quality of Institutions."  It was attended by many economists and graduate students from the University and the Mercatus Center.

Here is the abstract:

"Generally speaking, better educated countries have better institutions, an empirical regularity that holds in both dictatorships and democracies. We suggest that a possible reason for this fact is that educated people are more likely to complain about misconduct by government officials, so that, even when each complaint is unlikely to succeed, more frequent complaints encourage better behavior from officials. Newly assembled individual-level survey data from the World Justice Project show that, within countries, better educated people are more likely to report official misconduct. The results are confirmed using other survey data on reporting crime and corruption. Citizen complaints might thus be an operative mechanism of institutional improvement, one that explains the link between human capital and the quality of government."

It was the first time that I've ever seen a single paper formally presented, and this was a very good one to see first.  It was very interesting and the model was simple enough for me to follow.  I think that I understand the way that models fit into economic papers much bettter now after seeing one presented.  For more economic events, at George Mason University or at other regional institutions, visit the Speakers Calendar.

New Semester, New Speakers!

The new semester means that there are a new round of speakers in the Washington D.C. metropolitan area.  Highlights include Andrei Shleifer of Harvard University, Tyler Cowen of George Mason University, Nassim Taleb of New York University Polytechnic Institute, and David Card of the University of California - Berkeley.  Jonathan Levin of Stanford University and Ben Bernanke of the Federal Reserve Board will also be giving lectures, but those might be tricky to get into as Bernanke's is part of a class at George Washington University and Jonathan Levin's is part of the Caroll Round at Georgetown University.

Here is the full list.  If you would like to add an event, please send me an email here.

Why is Regulation so Common?

The United States has many regulations both on a state level and at the national level.  I recently wrote that one way to give tax cuts to businesses without diminishing government tax revenues and therefore increasing the debt was to diminish regulatory taxes.  Most of the groundbreaking literature (Stiglitz & Posner) on the economic effects of government regulation comes from a post-hoc point of view.  Andrei Shleifer wonders, in his forthcoming (February 2012) book, The Failure of Judges and the Rise of Regulators, why do we have so many regulations?

The M.I.T. Press describes it: "Government regulation is ubiquitous today in rich and middle-income countries - present in areas that range from work-place conditions to food processing to school curricula - although standard economic theories predict that it should be rather uncommon.  In this book, Andrei Schleifer argues that the ubiquity of regulation can be explained not so much by the failure of markets as by the failure of courts to solve contract and tort disputes cheaply, predictably and impartially.  When courts are expensive, unpredictable, and biased, the public will seek alternatives to dispute resolution.  The form this alternative has taken throughout the world is regulation."

This book is based on several papers that he has written over the years.  Here is one that he wrote in 2001 with Edward Glaeser titled, "The Rise of the Regulatory State."

Andrei Shleifer is an economics professor at Harvard University.  He is most known for his work on law and finance.  He gained some notoriety during a scandal involving USAID, Harvard, and programs to transition Russia to capitalism during the 1990's.  This recent work on the origins and reasoning behind the current regulatory situation in the U.S. and around the world seems like important additions to the study of regulatory economics.