Luigi Zingales on Incentives and the Potential Capture of Economists by Special Interests

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4.7 • 4.4K Ratings

🗓️ 20 October 2014

⏱️ 62 minutes

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Summary

Luigi Zingales of the University of Chicago's Booth School of Business talks with EconTalk host Russ Roberts about Zingales's essay, "Preventing Economists' Capture." Zingales argues that just as regulators become swayed by the implicit incentives of dealing with industry executives, so too with economists who study business: supporting business interests can be financially and professionally rewarding. Zingales outlines the different ways that economists benefit from supporting business interests and ways that economists might work to prevent that influence or at least be aware of it.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty.
0:06.4	I'm your host, Russ Roberts of Stanford University's Hoover Institution.
0:11.0	Our website is econtalk.org where you can subscribe, comment on this podcast, and find links
0:16.3	and other information related to today's conversation.
0:19.0	You'll also find our archives where you can listen to every episode we've ever done going
0:23.3	back to 2006.
0:25.4	For email address ismailodycontalk.org.
0:27.9	We'd love to hear from you.
0:32.2	Today is September 23rd, 2014, and my guest is Luigi Zengales, the Robert C. McCormick
0:38.5	Distinguished Professor of Entrepreneurship and Finance at the Booth School of Business
0:42.8	at the University of Chicago.
0:45.0	The author of a very provocative and utterly fascinating piece, Preventing Economist Capture
0:51.3	that appeared as a chapter in a book on regulatory capture published last year, and his essay
0:56.1	is the subject of today's episode, the which you welcome back to econ talk.
1:00.4	My pleasure.
1:01.4	I'd love to be back.
1:02.9	Now preventing economist capture is not about kidnapping or abduction.
1:08.9	Your piece is about the biases that economists bring to their research and their policy
1:15.6	positions.
1:16.6	I want to start as you do in the paper with the idea of regulatory capture in general.
1:21.6	And how economists view the incentives facing regulators.
1:27.0	Yes, I think it's very important to explain to ordinary people that when economists talk
	...

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