economists and public policy programs

Curriculum and Case Notes

Richard F . Elmore Editor

Submissions to Curriculum and Case Notes should be sent to Richard F. Elmore, School of Education, Harvard University, Cambridge, MA 02 138.

ECONOMISTS AND PUBLIC POLICY PROGRAMS

Lee S. Friedmon

Introduction

The purpose of this paper is to examine the relationship between the academic fields of economics and of public policy, with an eye toward identifying aspects of the relationship that have policy consequences for either or both fields.

To gather information for this study, I have conducted telephone interviews with representatives (program heads or senior faculty) of all degree-granting institutional members of the Association for Public Policy Analysis and Man- agement (APPAM). In addition to this primary source, I have reviewed a number of documents providing information about the history and development of public policy programs, the economics curricula in these programs, and their faculties. Furthermore, I would be remiss not to point out that my own experience as an economist teaching in public policy programs since 1972 informs and influences my interpretations and opinions.

One central concern surfaces again and again in viewing the relationship between these two fields. The concern is this: Economics departments do not try to produce top scholars with serious applied interests. Certainly a few such individuals do sneak through, but they do so largely by bucking the system rather than following it. The concern is that the “representative” economist, a t the completion of formal training, has too little capacity for, interest in, and perhaps too little appreciation or even tolerance of, application.

Journal of Policy Analysis and Management, Vol. 10, No. 2, 343-359 (1991) 0 1991 b the Association for Public Policy Analysis and Management PublisheJby John Wiley & Sons, Inc. CCC 0276-873919 11020343- 1’7$04.00

344 1 Curriculum and Case Notes

Perhaps i t is not the job of the economics profession to promote such interests. Perhaps other institutions, like the public policy programs themselves, can produce such individuals. But the overwhelming consensus of those surveyed in this study is that economics departments should accept responsibility for encouraging more professional interest in application. That such interest seems lacking is a very modern phenomenon, at odds with the entire history of the profession, at least until the 1970s. And no one is suggesting that the study of application should substitute for the study of theory. Rather, the concern is that theory should be more directed by, and evaluated with more weight given to, application. Theory and application are economic comple- ments, and bolh would be stronger as a result of studying them simultaneously.

The body of this paper examines the relationship between economics and the public policy programs, gives more context to the issues mentioned above, and presents some suggestions for change.

A Starting Point: The I979 Ellwood Study

John Ellwood conducted a study of graduate training for public service in 1979, and reported his results in a 1981 address to the American Political Science Association [Ellwood, 19811. The primary focus of his address was on the competition that professional programs were giving political science PhDs interested in public service. While that focus is not of interest here, Ellwood did survey the schools of public administration, public policy, and those combining business and public policy. His data sources were a mailed survey of the 215 members of the National Association of Schools of Public Affairs and Administration (NASPAA), of which 202 were completed; self- studies completed by 76 NASPAA programs, as part of a NASPAA-sponsored peer review process; and supplementary material on major programs that are not members of NASPAA. He also had access to NASPAA questionnaires sent to its membership in 1973, 1975, and 1977.

Ellwood reported the disciplines of the faculty involved in these programs. With respect to the economics faculty, he wrote: “The rise of microeconomic approaches and techniques is reflected in the increase in the number and percent of business administration and economics faculty. These two catego- ries should be grouped together since many programs have turned to their business faculties for courses in microeconomics, cost-benefit analysis and public finance, as well as the more traditional subjects of financial management and accounting” [Ellwood, 1981, pp. 8-91. His data show an increase from 185 economists (8.5% of teaching faculty) in 1973 to 495 in 1979 (9.9%), and a bigger increase of faculty with backgrounds in business administration,

Table 1. Economists and cconornics courses in NASPAA institutions, 1979.

Number

None 1-2 3-5 6+ Total

Economists (%) 17.5 44.8 26.8 10.9 100.0 Economics courses (70) 26.7 45 .O 22.2 6.1 100.0

CurricuIurn and Case Notes 1 345

Table 2. Types of economics courses required by NASPAA institutions, 1979 (n = 183).

Number

None 1 2 3 Total

Joint micro-macro (%) 69.3 18.8 2 .o 0 .o 100.0 Microeconomics (%) 91.2 8.2 0.5 0 .o 100.0 Macroeconomics (%) 96.2 3.3 0.0 0.5 100.0 Policy analysis & eval. (%) 64.3 30.2 4.9 0.5 100 .o

from 147 in 1973 (6.7%) to 474 in 1979 (9.5%). These figures suggest large overall growth, as well as a modest growth in shares. He also reported the distributions shown in Table 1 : number of economists on the teaching faculty, and number of economics courses offered in the masters degree curricula.

It is also of interest to compare the 495 NASPAA faculty economists in 1979 with the total number of academic PhD economists. By rough estimate, there were 9,400 total academic economists, so that the NASPAA faculty economists represent about 5.3% of the market.’

Ellwood also reported on the number of economics courses of several types required for the masters degree (see Table 2). Note that a course called “Policy Analysis and Evaluation” is included among these. The content of such courses varies enormously, but they typically include some microeconomics, benefit-cost analysis, and decision theory, and are typically taught by economists.

Ellwood also presented some data that help distinguish the role of economists and economics in the various types of public policy programs. He divided the programs in his sample into the following types: public administration within a political science department (PS), public administration as a separate program (PA), comprehensive (very large) public administration school (CPA), public policy program (PP), and generic management (GM). He then reported for each type the percentage of economists on the faculty, the percentage requiring various economics courses for the masters degree, and the number of required economics courses (see Table 3).2

It is clear that in 1979, economics was a much more central part of the public policy programs than any of the other types, and that the generic management programs also gave a relatively greater emphasis to economics than the three more traditional types of programs did.

’ According to a National Science Foundation report, there were 8,800 academic economists with doctorates in 1977, and 11,800 in 1987. Linear interpolation leads to an estimate of 9,400 for 1989. The data are found in NSF [1988], Table 10. ’ One must interpret the latter cautiously, because the number appears to be based on course

titles without information or controls on course length. Berkeley. for example, was listed as having three courses a t that time: Economic Analysis, Introduction to Policy Analysis, and Advanced Policy Analysis, each being two semesters in length. Carnegie-Mellon was also listed as having three courses, but its three were a one-semester Microeconomics, a half-semester Macroeconomics, and a half-semester Cost-Benefit Analysis. So the six semesters at Berkeley were treated the same as the two semesters a t Carnegie-Mellon. (In fact, the real amount of economics taught a t each was about the same, because Berkeley‘s Policy Analysis courses taught very little economics, no more than a half-semester worth.)


Table 3. Variation in use of economists and economics courses among five types of NASPAA institutions, 1979.

Type of Program ~

PS PA CPA PP GM

Economists per unit (%) 10.4 8.1 10.2 32.4 15.4 Joint micro-macro (%) 1.8 5.7 7.7 2.8 7.8 Microeconomics (%) 0.3 0.3 3.8 13.1 6.5 Macroeconomics (%) 0.5 0 .o 0.0 10.3 3.9 Policy anal. & eval. (%) 8.5 5.9 7.7 5.6 1.3 Number of econ. courses 0.6 0.8 1 .o 2.9 2.1

~ ~~ ~ ~

Note: PS = public administration within a political science department; PA = public administration as a separate program; CPA = comprehensive public administration school; PP = public policy program; GM = generic management program.

THE ECONOMICS CURRICULUM IN THE PUBLIC POLICY SCHOOLS

In 1987 I reported the results of a survey of the economics curricula in the graduate programs of APPAM schools [Friedman, 19871. I found that on average, 2.09 semester-length courses in economics per program were required by the 27 programs covered. These courses consisted of .25 semester of macroeconomics and 1.84 semesters of microeconomics and its policy applications (including benefit-cost analysis and public finance topics). In other words, most APPAM institutions do not require macroeconomics.

This aggregate figure cannot be compared with Ellwood directly because of differences in the programs surveyed and definitions of a “ c ~ u r s e . ” ~ I did compare the courses in public policy programs counted by both surveys and found no significant changes in the curriculum! Thus the amount of economics in the required graduate curricula of the public policy schools appears to be stable; it is an open question whether it is still increasing in the NASPAA schools or through undergraduate public policy curricula.

The focus on the required courses underestimates the amount of economics in the graduate public policy curricula for three reasons. First, as mentioned earlier, almost all of these programs teach integrative courses called something like “Policy Analysis and Evaluation.” These general analytic courses are often taught or co-taught by economists and frequently include a substantial amount of economics. Second, the figures do not include courses in accounting, bud eting, or finance, which may also include substantial amounts of economics! Third, numerous elective economics courses in the public policy schools are typically available and taken during the second year of

’ See footnote 2 Ellwood identified 12 programs as “public policy.” Al l of these except one, Stanford’s Public

Management program in its Business School, are members of APPAM and are identified as “Ellwood” in Table 5. The only other difference is that Harvard’s Kennedy School and Program in City and Regional Planning were separate and counted as two programs by Ellwood; they have since merged. It appears to me that the only changes in the required economics curriculum of these schools were Duke’s dropping of macroeconomics and Chicago‘s adding one micro and one macro course.

Curriculum and Case Notes 347

the two-year curriculum. These include courses in macroeconomics, public financial management, health economics, energy economics, public goods and public choice. At Berkeley, for example, macroeconomics is not required, but I believe roughly 50% of each graduate class takes it as an elective.

Finally, the bulk of my earlier 198 1 paper emphasized the important differences between teaching economics to public policy students and to economics graduate students. To do a good job, instructors cannot simply teach the same course to both audiences. Public policy graduate students will, for the most part, become active problem solvers in a complicated political world where achieving constructive change requires surmounting numerous political and organizational obstacles. The biggest instructional mistake in teaching economics to these students is to assume that the complications of acting in a political world can be dealt with elsewhere in the curriculum.

The feasible changes are virtually never the “first-best” solutions offered in our textbooks. For example, it does little good in Washington, DC to assert that agricultural subsidies are horribly inefficient. Those instructors who offer no more than the textbook analysis find that their students later conclude that economics is irrelevant and do not use it (even though they may rate the course highly while in school). The successful instructor must constantly make students aware of the difficulty and importance of effective economic analysis in a policy setting, and offer guidance on analysis in such settings. Unfortunately, many economists do not know what guidance to offer and often do not even have tolerance for consideration of the political and institutional processes that the public policy graduate must confront.6

A CURRENT SURVN OF APPAh4 INSTITUTIONS

For purposes of gathering new survey information, I am representing the field of public policy by the 35 academic units that were listed as institutional members ofAPPAM in its 1988 membership directory (see Appendix to this paper). These units include all of the initial cohort of public policy schools and programs stimulated by the Ford Foundation, newer programs such as that of the University of Maryland, some schools of public administration (e.g., Syracuse, University of Southern California), and some programs in the business or generic management schools (e.g., University of Pennsylvania, Yale). Eleven of the units have undergraduate programs, although only one is solely undergraduate (Brown University). Thus, as a whole,.this group of institutions should give a good representation of the public policy field, containing much of the institutional diversity that would characterize a larger survey effort. On the other hand, because of the self-selected nature of APPAM membership, there should be no presumption that those schools of public administration that are APPAM members are representative of all schools of public administration; similarly for the business schools that are APPAM members.

The course title is not enough to reveal its content. Many economists could teach a budgeting course and use the framework of the budget to teach a considerable amount of economics. However, budgeting is also a bread-and-butter course in the political science approach to public administration, and such a course usually emphasizes the politics of budgeting.

6The interested reader is referred to the original article, which illustrates many of these concerns.

348 / Curriculum ond Case Notes

Table 4. Economists in public policy programs.

Term used in program title”

Policy

Number of faculty (FTEs) 176.5 Number of economists (FTEs) 49.7 Number of programs 19 Faculty per program (FTEs) 9.3 Economists per program (FTEs) 2.6 Percentage economists 28.2

~

Affairs Administration Ellwood

323.6 107.0 209.0 78.3 14.7 69.2 13 6 10 24.9 17.8 20.9

6 .O 2.5 6.9 24.1 14.0 33.1

’The same program may be included in more than one column, and some judgment was required. For example. Brigham Young University offers its public policy graduate training through its political science department, and has none of the above terms in its title. However, i t offers a two-year Master of Public Administration degree and a joint five-year Bachelor of Arts and Master of Public Policy degree, so I included it in both the ”Policy” and “Administration” calculations.

I conducted the survey by telephone during July-September 1989. The survey gathered information about the number of faculty, faculty work loads and support, the number of students, the number and primary field of specialization of the economists on the faculty, relationships with the economics. departments, faculty who are close substitutes for economists, faculty hiring processes, and opinions on the strengths and weaknesses of graduate training in economics and conditions fostering and hindering collaborative research between economists and others. I describe the findings below.

The Size of APPAM Programs and Number of Economists

The survey undertaken for this paper reveals that the 35 APPAM institutions have theequivalent of639.1 full-time faculty members, 155.0(24.3%)0fwhom are economists. The comparable number of national academic economist FT’Es (full-time equivalents) is not available to me, but in 1987 there were 1 1,800 academic economists with doctorates, according to a National Science Foundation report [NSF, 1988, Table lo]. Since the FTEs among these must be less, a crude estimate would be that the economists on APPAM institution faculties represent about 2% of all academic PhD economists.

The average APPAM program has 18.3 FTE, 4.4 of whom are economists. However, this average masks considerable variation among APPAM members. The number of FTEs, for example, ranges from 2 to 82. Table 4 shows the classification of the programs by the words they use in their official titles (e.g., School of Public “Policy,” Public “Affairs,” or Public “Administration”) and by those in the 1979 Ellwood “public policy” group, and looks at the variation in faculty size and number of economists among them. If one looks only at those members who were part of Ellwood’s policy group, the average FTE is 20.9, and 6.9 or 33% of them are economists. The APPAM programs with “Policy” in their titles are on average much smaller than these (9.3 faculty FTE), but have a similar proportion of economists (28.2%). In the APPAM-member programs with the word ”Administration” in their program title, the average faculty FTE is 17.8 (a bit smaller than the Ellwood group), but only 13.7% are economists. The APPAM “Public Affairs” programs are the

Curriculum and Case Notes 349

Table 5. Fields of specialization of APPAM economists. ~~ ~~ ~~ ~~ ~

Specialization FTE Percent AEA (%)a

Microeconomics 9.30 6.0 Macroeconomics 2.90 1.9

Development and planning 9.39 6 .O 11.6 Mathematical and econometric 5.46 3.5 9.9 Public sector 48.10 31.0 16.1 International trade 7.47 4.8 10.4 Finance & other 9.63 6.2 8.4

Comparative systems 0.37 0.2 1 7 . 9 b

Industrial organization 14.94 9.6 1 1 . 1 Natural resources & Agricul. 3.72 2.4 5.4 Labor 17.35 11.2 2.9 Health, educ. & welfare 14.76 9.5 Urban and regional 11.57 7.5 - 6.3b Total 154.96 99.8‘ 100.0

a These percentages are presented for comparison purposes. They are derived from an approxi- mate count of names listed under each field in the December 1989 American Economic Review 79(6), pp. 531-575. The estimated total number of names, using 1 1 names per inch per column, was 18,010. This double-counts many individuals who are listed under two fields, and fails to count many AEA members who did not provide their fields. Nevertheless, I think it is useful for estimating the differences in fields of specialization between APPAM economists and AEA economists.

Underlined percentages indicate that they are cumulative and represent the current row plus any with blank entries immediately above it.

The column numbers do not add to 100.0 due to rounding.

largest in size (24.9 faculty FTE), and economists represent 24.2% of the academic staff.

In comparison with the previous decade, these data may reflect some growth in the use of economists by these programs. But it is not possible to separate out true growth from self-selection into APPAM of institutional members who are more oriented towards economics than NAPSAA schools generally. To the extent there is growth, it is not coming from within the Ellwood group of public policy schools. The 1989 numbers for this latter group are almost the same as those found by Ellwood in 1979, indicating little change over the decade. However, the proportion of economists in the other classifications all exceed the proportions reported by the NAPSAA schools, no matter how they were subcategorized (see Table 3) .

Fields of Specialization of APPAM Economists

Each program representative was asked to classify the economist FTEs by primary fields of specialization. The results are shown in Table 5.’ Not surpris- ingly, by far the largest concentration of economists is found in public sector

’ Fields of specialization correspond closely to American Economic Association (AEA) classifications and are listed in AEAorder. For example, microeconomics, macroeconomics, andcompar- ative systems in the table correspond to the AEA classification “000 General economics; Theory; History; Systems.” AEA classifications may be found in The American Economic Review 79(6) (December 1989), p. 528.


economics (31.0%). No other specialization has more than 12% of the FTEs. And it is quite interesting to note the broad diversity of fields of these public policy economists. Aside from the expected heavy concentration in the public sector, the balance among all the other specializations is probably not terribly different from a typical economics department (although there is less macroeconomics and more health economics). This suggests that virtually all areas of economics are not only recognized by the public policy schools as having the potential for significant public policy implications, but are represented within them.

Relationships with Economics Departments

Public policy programs are usually set up in or operate as a separate professional school in a university, much like a law school or a business school. As such, they typically have their own tenurable positions, and formal decisions about the hiring and promotion of economists within these programs may be made independently of the economics department. Twenty-five of the 35 APPAM institutions, or 71%, fit this description. These 25 almost all report satisfaction with their arrangements, although a number wish for more collegial interest in the program from economics department members.

Of these 25, only four report that their economists typically have appointments in the economics department as well. The Woodrow Wilson School a t Princeton, for example, reports that almost all of their economists are full voting members of the economics department, although their tenure resides in the school. These economists are typically hired through joint search processes run by the department and school, and typically teach something in the department. However most public policy schools do not have the same close institutional relationship with the economics department.

For the majority of public policy schools, the appointment of any of their economics faculty to the economics department is done on an individual basis and typically as a courtesy appointment. Most report a t least one faculty member with such an arrangement, and such faculty usually offer a departmental course. Many faculty with such appointments have them because they were in the economics department before they transferred, often as founding faculty, to the public policy school.

While promotion and tenure decisions within these schools usually require no formal input from the economics departments, i t is not unusual for the schools to request and the departments to provide such input. Because the structure of the promotion process greatly differs across universities, it is difficult to generalize about how this is done. Nevertheless, I think it is fair to say that typically some individual economists from outside the school provide some evaluative input, rather than a departmental-level evaluation to the school.

In addition to the 25 public policy schools, ten APPAM institutions structure their public policy curriculum as programs that do not have departmental or school status. These tend to be the smaller and newer programs, and in most of these cases faculty are drawn from other campus units. Three programs are within or closely connected to their political science departments, and two of these have no economists. For the eight with economists, the economics departments typically have much to do with hiring and promotion (unlike the public policy schools), and tenure is likely to reside in the departments.

Curriculum and Case Notes 35 1

About half of the representatives of these programs indicate they are satisfied with these arrangements, but the others are not satisfied. These latter report a divergence between the objectives of the economics department and the program in making hiring and promotion decisions. At the risk of oversimpli- fying, the departments value and seek a more abstract and narrow disciplinary type of research contribution from their faculty, while the programs value and seek a more applied and multidisciplinary approach.

It is interesting to note the tensions between the two predominant forms of relationships that public policy programs have with the economics departments. Those with only informal relationships wish there were more collabo- ration, and those with more formal arrangements wish for more indepen- dence. Perhaps it cannot be had both ways.

Working Conditions of Public Policy Faculty

As part of the telephone survey, program representatives were queried about teaching loads, research support, and relative salary levels and promotion prospects (compared to the economics department) for their faculties. All but eight of the 35 APPAM institutions reported their normal teaching loads as 4 courses per year (two from the majority were on the quarter system, and a quarter course generally runs slightly fewer classroom hours than a semester course). Brandeis, Harvard, and Princeton reported normal loads of 3 courses per year. Among the other five institutions, three had loads of 5 courses, one had 6 courses, and one had 4.5 (but on the quarter system).

The normal teaching load, of course, does not necessarily reflect the amount of teaching a typical faculty member will do. All universities will release faculty members from part of the normal obligation under certain circumstances, the most common being for research purposes, and the next most common for administrative duties. It is difficult to control for differences across universities in the circumstances leading to release: The same administrative duty (e.g., graduate advisor) may qualify for release at one institution but not at another, and a faculty member may or may not have to obtain an outside grant to cover the cost of release time for research purposes. With these caveats in mind, the vast majority of APPAM institutions report that 1 course released is the average for their faculties; furthermore, the effective teaching load per faculty member (normal load minus the institution’s average number of release courses) clusters tightly amund 3 courses per year.

Variation in release rates can offset variation in normal teaching loads: Princeton, for example, has a low normal load but also reports a low release rate (1 l%), so that the average faculty teaches 2.67 courses. On the other hand, the two other institutions with low normal loads (Brandeis and Harvard) also report higher than average release rates (33%), for an effective average load of 2 courses per year. The effective loads vary from the low of 2 to a high of 4 per year, but with most quite close to 3.

The information on relative salary levels and promotion prospects is based on the best judgment of the APPAM program representative, and many indicated they were uncertain. In terms of relative salary levels, there is no difference on average between the APPAM institutions and the economics departments. Representatives from 1 1 programs reported that relative salaries were the same; 11 thought the APPAM salaries were somewhat higher;


ten thought the APPAM salaries were somewhat lower; and three indicated they did not know.

In terms of prospects for promotion, the judgments do indicate some difference from economics departments. While 14 representatives judged the prospects as the same, another 14 indicated the prospects for promotion are somewhat better at the APPAM institution. Only two representatives reported worse prospects for promotion at the APPAM institution, and five did not know. Thus it seems likely that, on average, promotion prospects are somewhat better for APPAM faculty than for economics department faculty at the same institution.

Finally, the representatives were asked to indicate the nature of any research support that their program could provide to its faculty (as distinct from general support available to all faculty of the university). Again, it is somewhat difficult to generalize from these responses. I was a little surprised by the absence of significant support at many institutions. Five reported no support; one reported only funds for personal computers; one reported only travel funds for conferences; and two reported only travel funds and computer time. Five more reported nothing, but indicated there was some close connec- tion between a support-providing research center and at least some of their faculty. Of the three more important resources-research assistants, summer salary, and course releases-none reported the availability of all three. Only 11 indicated they could provide some summer support; of these six indicated it was just for newer (junior) faculty, and two others as “a last resort.” Of these same 11, five indicated they also provided some support for research assistants. Only two of the 11 could also provide release time during the academic year. Out of all 35, only seven indicated they could provide some release time.

What does this add up to, in terms of general working conditions for faculty at the APPAM institutions? It is unlikely that the average APPAM environment is substantially better than the environment in the average corresponding economics department. If there is an advantage, it may be in slightly better prospects for promotion. But then again, the nature of the teaching and research expected are different. I will venture the opinion that, on average, the two types of positions (in an APPAM institution or an economcis department) are not close enough substitutes for this to be an important factor in terms of the supply of economists to each type of institution; the most important supply factor is the taste or preferences of the economist for the two different kinds of work and collegial environments. Some additional data discussed in the following section seem to support this idea.

Determinants of Demand for Economists by APPAM Institutions

In my telephone interviews with the APPAM program representatives, I asked several questions that bear on the likely future demand for economists. These questions were intended to find out more about the kinds of economic skills and interests that the programs seek, and the kinds of people that can provide them. In particular, I asked about the number of close substitutes for public policy economists on the faculty (e.g., PhDs in Public Policy with substantial economic skill), and the extent to which they teach economics courses. I asked about recruiting for economists: how often economists are hired by a search restricted to economists per se; and how often newly-minted economists are


hired, as opposed to economists with more experience. I also asked about the strengths and weaknesses in economics PhD programs as perceived by the APPAM institutions in their role as demanders of economists for their faculties. I discuss their responses below.

Each program representative was asked about the number of faculty who were close substitutes for economists but whose PhDs were in something else, like Public Policy. Alto- gether, the institutions reported having 58 such individuals (not FTE), or 1.66 on average. Of the 27 institutions having some of these individuals, 14 reported that they do teach economics courses, but almost as many (12) reported that they do not (although some indicated they might well do so in the future).* Making some guesses from these numbers, I would put these close substitutes as representing about 7% of the APPAM FTE and teaching about 10% of the economics courses in the curriculum? However, the “substitute” PhDs are probably substantially younger on average than APPAM economists, and the proportion of economics that they teach is likely much.higher as a proportion of similarly-aged APPAM economists. Thus, APPAM institutions have significantly substituted others for economists on their faculties, and the proportions of substitutes reported here will grow substantially as the older APPAM economists retire and are replaced with a mixture of economists and close substitutes.

This might also be looked at in the context of the supply of “substitutes”: how many PhDs are being produced by the APPAM institutions.’O Only 17 report having PhD programs, while 18 do not (some of the latter are starting them). In 1988-89, the 17 PhD-granting APPAM institutions awarded 89 PhDs, about 10% of the total number of economics PhDs.” These institutions report having awarded over 1,600 PhDs in their history. These numbers overstate substantially the number who are “substitutes” for economists; while some do take substantial amounts of economics, many take very little and some take none a t all. In addition to knowing that only 58 of the 1,600 teach at APPAM programs, I also asked how many are teaching in economics departments. The answer, at least within the United States, is somewhere between 4 and 6! So, to the extent that these institutions produce substitutes for economists, the substitutions must occur in professional programs (e.g., public policy, public administration, business and public policy, city and regional planning) or in non-academic settings.

Within the supply of APPAM PhDs, some institutions contribute a dispro- portionate amount. At least 1,300 (81%) of the cumulative PhDs and 50 (56%)

Close Substitutes for Public Policy Economists.

’ One program representative was uncertain if the public policy PhDs taught economics courses.

I assume that the 58 individuals represent about 45 FTE, or about 7% of the 638.1 FTE total. The economics course teaching probably occupies 25-33% of their time, or 11-15 FTE worth. Of the 154.3 FTE economists, I am guessing that they teach 80% economics courses (and 20% more generic policy courses, like health policy), or about 123 FTE worth. Thus the total FTE for economics courses is estimated at about 136, with 13 of the 136, or lo%, provided by the close substitutes.

There are programs that are not members of APPAM but do supply some PhDs who are close substitutes for economists to APPAM programs. One example is California Institute of Technology’s Social Science program; another is the Stanford School of Business.

” In 1987, the most recent year for which I have data, 796 PhDs were awarded in economics (including about 150 in agricultural economics) [NSF, 1988, Table 261.

354 / Curriculum and Case Notes

of those awarded in the past year are from the following six schools: Brandeis, University of Pittsburgh, NYU, USC, S U N Y at Albany, and Syracuse. How- ever, these same six schools have contributed only 4 (7%) of the 58 substitutes teaching within the APPAM programs. The amount of economics required for PhDs from one of these six schools is not great. Within this group, the Brandeis PhDs probably have the most economics; they are required to pass an economcis qualifying examination, and most take 2-3 semesters of economics. Pittsburgh has four different PhD programs within it; two require no economics, one requires 2 semesters, and one (Public Policy Research and Analysis) requires 9 credit hours of economics courses. Of course any individual within these programs may elect to study a substantial amount of additional economics.

Some APPAM schools with much smaller PhD programs supply more “close substitutes” to APPAM: Berkeley’s Graduate School of Public Policy reports only 19 PhDs awarded (about 1% of all APPAM PhDs), but 5 of them are teaching in APPAM Schools (9% of the “close substitutes”). Berkeley requires only 2 semesters of economics, but its average PhD takes about 6 semesters and elects an economics field as one of two required fields for the oral examination. Similarly the University of Pennsylvania’s Public Policy and Manage- ment program at the Wharton School has produced 22 PhDs, and 5 of whom are teaching in APPAM programs. But these two schools do not produce equivalent substitutes on average: All 5 from the University of Pennsylvania are teaching economics courses, while only 2 of Berkeley’s 5 do so.12 Harvard’s Kennedy School and Carnegie-Mellon’s School of Urban and Public Affairs have each produced about 50 PhDs and also have contributed disproportion- ately to the current stock of “close substitutes” for economists within APPAM.

What do these data suggest? My reading is that the APPAM schools have been producing substitutes for economists within APPAM and probably within other applied academic and non-academic settings. While the APPAM schools continue to hire economists, they (and others with similar applied interests) probably can turn increasingly to hiring the substitutes. I did not ask about the supply of students to APPAM PhD programs, but my impression is that it would not be difficult for APPAM institutions to increase the flow of good students through them. Some programs discourage students from this path because of the uncertainty about the value of a PhD relative to a master’s degree. Should the programs find increasing difficulty in hiring appropriate economists, they will expand their production of close substitutes.

Let us turn to recruiting. The APPAM representatives were asked to think about the search procedures used to hire the economists on their faculties, and about how many searches were designed to hire economists per se. I expected to find out the extent to which APPAM institutions recruit by policy area (e.g., health policy) without specifying disciplinary background, and happen to end up with economists as opposed to others. However, the representatives were, on average, familiar with only some of the searches, and the nature of their responses does not lend itself to useful quantification. I will report my own impressions of their collective impressions.

Recruiting of Economists by APPAM Institutions.

’’ The university of Pennsylvania’s program has also contributed 3 of the 4-6 APPAM PhDs teaching in economics departments, and clearly produces the closest substitutes to economists of all the APPAM programs.

Curriculum and Case Notes / 355

Many of the economists were hired without formal search processes, as senior founding faculty who transferred from the economics department or elsewhere on the campus. When formal search processes were carried out, the majority were designed to hire economists. At the senior level, the searches usually have focused on economists per se. A t the junior level, virtually all institutions report that they consider “close substitute” individuals along with card-carrying economists. Because of the relative newness of the PhD programs capable of producing “close substitutes,” more competition can be expected at the senior level over time.

The representatives were also asked how many economists were recruited at the senior level, and how many were recruited directly from their PhD programs. Keeping in mind that many senior economists were not hired through search processes, over half of the reported searches (43 of 80) were at the senior level. A minority of the economists were hired directly from their PhD programs. Many of the representatives commented that newly-minted economics PhDs often have not yet discovered whether they wish to apply themselves seriously to research focusing on policy applications. Many representatives also report a substantial, time-consuming, and sometimes difficult socialization process that occurs with younger economists as APPAM faculty attempt to convey norms for important research and teaching contributions at odds with the norms inculcated in the PhD program.I3 When economists are hired at the junior level, most representatives indicated a preference for individuals who have had a few years of policy-relevant work.

Strengths and Weaknesses of PhD Training in Economics for APPAM Fac- ulty. All APPAM representatives acknowledged the value of the analytical rigor that characterizes PhDs in economics, and the importance to the public policy programs of having such faculty on their staff. Different aspects of this analytic rigor were described, from theory formulation and problem conceptualization to research methods and empirical testing.

The enthusiasm for this strength, however, was not matched by the inten- sity of feeling about the weaknesses. Different aspects of the weaknesses were expressed by different representatives, but I believe it is fair to say that, universally, the representatives were dismayed at the lack of serious training in the application of economics to any real problem. One aspect of this mentioned by many concerned the inattention to, if not the intolerance of, institutional realities. Another aspect mentioned by many is a misconception that many theoretical modeling exercises are serious applications. A third aspect expressed by some was a failure to recognize the constraints of data limita- tions on the ability to apply economic theory. Some reported more pragmati- cally that it is very difficult to find a new economics PhD with serious interests in social policy.

To many economists, a theoretical model of optimal taxation with some new wrinkle not thought of by Ramsey is an application. Such economists are unconcerned with or uninterested in the political realities of setting tax policy, the availability (let alone reliability) of data, or the organizational capability to calculate or implement such a proposal. The APPAM programs are not looking for someone whose research takes all of these factors into

l 3 Some report similar difficulties with newly-minted individuals from any traditional social science discipline, although the magnitude of the problem is usually thought greater with economists.


account; they are looking for individuals who are sensitive to their importance in any real application, who wish to strive to help students who will be doing the actual applications, and who are interested in developing the analytic tools and methods most appropriate for application.

CONCLUDING SUGGESTIONS

During the telephone survey, respondents made many suggestions for changes in economics training. All were made in the spirit of preserving the analytical rigor, but better harnessing it to application. Most respondents were interested in doing something to encourage tolerance of and greater interest in policy issues, institutional and political processes, and understanding behavior. The most common suggestions included the following:

0 Encourage more attention to economic history, and perhaps the history of economic thought. Both courses, which used to be almost universally required for a PhD in economics, usually are taught with a sensitivity to the importance of institutional forces. Economic history also often re- flects analysis with real data constraints.

0 Offer, and perhaps even require, a course in applied microeconomics. Such a course could examine in detail a number of contemporary policy issues in which economic analysis has much to contribute. The emphasis should be on the policy issue as primary, and methodology only as a secondary issue. Encourage more attention to relevant policy issues in all courses.

0 Encourage students to take some outside courses. For example, a department could require a non-economics course in the PhD student’s major field of specialization. A student of labor economics, to illustrate, could take a political science or sociology course in labor unions. Another method, with some historical precedent, is to require a minor of about 12 credit-hours outside the discipline.

0 Encourage observations and field work. Students too rarely speak to or even observe for themselves the people whose behavior they are studying. Offer more course work featuring experimental methods, perhaps studying psychological versus economic models.

Many respondents also noted that elements of this discussion apply both before and after PhD training. Some suggested that i t would be useful for departments to offer an applied microeconomics course at the undergraduate level. Many recognized that economics department faculty must have some incentive to treat applications more seriously in their courses, and suggested that applied work be valued more highly in the promotion process.

As public policy faculty, the respondents know i t is easy to make suggestions and much harder to generate a constructive response. I hope this report conveys their impressions and reactions in a clear and accurate way and will contribute to the improvement of our professions.

This paper is a shortened version of a report commissioned by the American Economic Associa- tion Commission on Graduate Education in Economics. While the report is addressed to those in the economics profession, I hope that it is useful for assessing desirable characteristics for the


faculty of public policy programs. I would like to thank the Commission’s Executive Secretary, W. Lee Hansen,for helpful comments and guidance throughout the project. I would also like to thank all of those who participated so generously in the telephone survey conducted for this study.

LEE S. FRIEDMAN is Professor of Public Policy at the University of California, Berkeley.

REFERENCES

Ellwood, John L. (1981), “Graduate Education for Non-Academic Careers in the Public Policy Schools: A Look at the Competition.” Typescript of paper presented at the September meeting of the American Political Science Association, New York.

Friedman, Lee S. (1987), “Public Policy Economics: A Survey of Current Pedagogical Practice,” Journal of Policy Analysis and Management 6(3) (1987). pp. 503-520.

National Science Foundation (1 988), Profiles-Economics: Human Resources and Funding, NSF 88-33, Washington DC.

358 Curriculum and Case Notes

APPENDIX: AEA PUBLIC POLICY PROGRAM SURVEY

Number of Students Jobs of PhDs (%)

Under- Mid- 88-89 PhD Aca - University grad Masters career PhDs total Govt demic Other

Brandeis Brigham Young Brown U Cal Berkeley Carnegie-Mellon U Chicago U Colorado Den Columbia Duke George Wash. Harvard Indiana SPEA Maryland Michigan Minnesota U Missouri St L New School NYU North Carolina U of Penn Penn State Pittsburgh Prince ton Rand Rochester U Southern Cal U of Sthn Maine SUNY Albany S U N Y Stony Brook Syracuse U of Texas Aus Vanderbilt U of Washington U of Wisconsin Yale

Total “Policy” “Affairs” “Administration” ”Ellwood”

0 0

45 0 0

18 0 0

47.5 0 0

1100 0 0 0 0 0 0

31 32.5 0

25 80 0

75 0 0

65 0 0 5 0 0 0

1524 244

1205 75

178

32.5 35.5 0

32.5 35 47.5 30 65 35 0

220 60 33 50 70 15

200 200

20.5 35 12

250 70

0

200 30 70 72.5 87.5

105 15 70 30

190

2478.5 768

1148 608 690

0 27.5 0 0 0 0 0 0 0 0

290 25 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0

17.5 0 0 0 0 0 0

360 45 25 27.5

290

18 0 0 0 5 2 3 0 0 3 5.5 0 0 3 0 0 0 6 0 4 0 8 5 6.5 0

10 0 5 0 3 0 2 0 0 0

89 28.5 26 24 31

408 0 0

19 50

3 5 0 0 3

55 0 0

12

0 0

101 0

22 0

300 52 69 0

20 1 0

112.5 0

200 0 4 0 0 0

1616.5 444.5 519.5 614.5 282

10 40

26 63 0 80 0 0

40 20

67 33 50

33 33

33 33

22.73 45.45

35 50 32 20 50 25

75 5

41.5 58.5

17 ao

25 50

29.87 31.03 10.24 11.75 7.68 12.53 7.11 14.08

50

11 20

100 40

0 50

34

34

31.82

15 48 25

20

0

3

25

28.10 6.51 5 .ao 2.81

Curriculum and Case Notes f 359

APPENDIX CONTINUED: AEA PUBLIC POLICY PROGRAM SURVEY

Calls itself Public-(in 1979) Faculty size Faculty economists No. of close

University Policy Affairs Admin Ellwood FTE People FTE Econ % subs

Brandeis 0 0 0 0

Brown 1 0 0 0 Brigham Young 1 0 1 0

U Cal Berkeley 1 0 0 1 Carnegie-Mellon 0 1 0 1 U Chicago 1 0 0 1 U Colorado Den 0 1 0 0 Columbia 0 I 0 0 Duke 1 0 0 1 George Wash. 1 0 0 0 Harvard 0 0 0 1 Indiana SPEA 0 1 0 0 Maryland 0 I 0 0 Michigan 1 0 0 1 Minnesota 0 1 0 0 U Missouri St L 1 0 1 0 New School 1 1 0 0 NYU 0 0 1 0 North Carolina 1 0 0 0 U of Penn 1 0 0 1 Penn State 1 0 0 0 Pittsburgh 0 1 0 0 Princeton 0 1 0 1 Rand 1 0 0 1 Rochester I 0 0 0 U Southern Cal 1 0 1 0 U of Sthn Maine 1 0 0 0 SUNY Albany 1 1 1 0 SUNY Stony Brook 1 0 0 0 Syracuse 1 0 1 0 U of Texas Aus 0 1 0 1 Vanderbil t 1 0 0 0 U of Washington 0 1 0 0 U of Wisconsin 0 1 0 0 Yale 0 0 0 0

Total “Policy” “Affairs” “Administration” “Ellwood”

22 40 13 13 2 4

13 13 22 22 7 14

12 12 1 1 17 18 18 2 3

60 120 82 82 14.5 14.5 8 22

17 29 4 8

20 20 25 25 6 8

10 14 3 8

45 60 37.5 50 8.5 60 5 7

35 35 8 13.5

15 15 16 20 15 15 25 25

3 12 15.6 ‘24 7 12

32 34

639.1 889 176.5 287.5 323.6 382.5 107 111 209 358

6 0 0 5 9 3.25 3 3.25 6 1

11 19 2.5 3.75 7 0.67 4 5 1 7 2 3

15.75 2.41 1.5 3 0.5 2 5 4 6 0.63 2 1.75 a

154.96 49.71 78.25 14.67 69.16

27.27 0 0.00

38.46 40.91 46.43 25.00 29.55 33.33 50.00 18.33 23.17 17.24 46.88 41.18 16.75 20.00 20.00 16.67 70.00 66.67

6.67 42 .OO 28.35 30.00

8.57 6.25

13.33 31.25 26.67 24.00 20.83 12.82 25.00 25 .OO

24.25 28.16 24.18 13.71 33.09

1 5 1 1 1 0 2 2 2 0 6 3.5 1 2 1 0 3 3 2 3 1 0 2 2 2 2 2 2 0 1 2.5 0 2 0 0

58

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