Faux meritocracy

When Canadian Prime Minister Justin Trudeau was asked why his new cabinet had as many women as men, he replied “because it’s 2015”. But as Owen Jones notes, when it comes to the UK and educational background, many people still presume that our leaders should come from the elite universities.

In an ideal world these would be different issues. In a truly meritocratic society those going to elite universities would be doing so on the basis of their abilities rather than who their parents were. In the UK and I suspect elsewhere we are some way from that ideal. Although I am pretty sure the reasons for this largely occur before 18, I also agree that Oxbridge could improve matters greatly if they stopped selecting students on the basis of interviews. It is one of many reasons why Oxbridge interviews reduce social welfare.

Here is a more minor observation which I think is quite revealing. As Owen says a big part of the problem with Oxbridge is that those from many backgrounds are put off from applying because they think it is only for toffs. It isn’t, but sometimes Oxbridge seems to pretend otherwise. For example there is the ludicrous Oxford tradition of making every student dress up in gowns and worse when they take exams. It means that just at the time that prospective students come for open days they are sure to see a large number of students walking around wearing funny clothes. If I was thinking about coming to Oxford it would put me off. It is rather sad that Oxford students keep voting to continue this tradition, but perhaps it tells you something about the wisdom of elites.

Which brings me to what I think is the crucial point: why is there this presumption that we should be governed by a meritocratic elite? Ability in a particular subject does not seem to be critical. No one suggests the Chancellor should have an economics degree rather than a 2.1 in modern history. (In the past even numeracy seemed not to be required.) The idea that politicians are having to deploy skills that you can only develop at university is a little naive. Most do not have the time to think very deeply about anything, and when issues that involve any knowledge arise they take advice. This is why I have no problem with the kind of delegation you get with central banks or infrastructure commissions. The main difference in those cases is that the public get to hear about what the advice is.

People in universities talk a lot about non-subject specific skills, like developing critical faculties, but arguably some of the crucial critical faculties for a politician are better learnt by leaving university and doing a job. Good judgement does not come from intellectual ability: Chris Dillow argues there is little correlation between high IQ and career success. Now I’m not going to pretend that, other things being equal, I would be indifferent to whether my MP had an economics degree or an NVQ in catering. But other things are not equal. We have a representative democracy, and one way to make sure it works well is if the people chosen to represent us are to some degree representative of the population as a whole.

Of course compatibility between democracy and meritocracy, and the merits of a meritocracy itself, are big issues. It is telling that the book that coined the term meritocracy, by the great Michael Young, had difficulty finding a publisher and was not reviewed by any scholarly publication. But I suspect what is going on here, at least in some quarters, is far simpler, and is a reflection of Trudeau’s remark. It is 2015, so it is no longer acceptable in public to argue that we should be governed by people from a particular class or background. For people who would still like to make that argument, the next best thing is to talk about which university (if any) a politician has been to.        

Delegating to the wrong people: the strange case of interviewing undergraduate candidates at Oxford

This post starts off talking about something rather parochial, but it then moves to a wider point about decision making in a particular type of large organisation.

This is a strange time of year at Oxford University. Very few UK universities interview prospective undergraduates to help select who should be admitted, but both Oxford and Cambridge do. As a result, all but the most senior academics will generally spend at least two solid days interviewing something like 3 times as many undergraduate candidates as there are places. The personal and social cost of this is pretty high - quite a few research papers will not get written as a result, and maybe the odd important discovery will be delayed by years. Yet Oxford and Cambridge are also relatively unusual among UK universities in still allowing academics considerable control over the way the institution is run. Is this a paradox?

Now all this might make sense from a social point of view if interviewing meant we clearly got much better students at Oxford than we would otherwise. However all the evidence I have ever seen on interviews is that they are pretty unreliable as a selection procedure. In this particular case, there are well known biases: those from certain schools or families will be practiced at giving a good impression in such situations, whereas others will not. We (and I think I’m justified in using that collective pronoun) do our very best to get round those biases, but it is hard. We can fail to compensate, or over compensate. We all think we can judge someone by talking to them for 30 minutes, but in reality our ability to assess academic potential that way is pretty small. Indeed, even if information gleaned from interviews contains some useful information, I strongly suspect those making decisions give this information far more weight than it deserves. My suspicions receive some local support from Bhattacharya et al (2012)[1].

So, if there is no clear evidence that students are much better selected as a result of interviews, why do we continue with them? One familiar idea is that this is a form of concealed class bias, but I suspect this is not the general case. The evidence from Bhattacharya et al suggest that for PPE at Oxford, the marginal student from an independent (private) school faces significantly higher admission thresholds than those from state schools. A slightly less politically charged version of this argument is that we want to select students who are easy and interesting to teach, and as the interviews are like mini tutorials they achieve this goal. This would also explain why interviewing is largely confined to the two universities that still have a traditional tutorial system (teaching in small groups of two to four).

Even if there is some truth in this, there still seems to be a puzzle. From the self-interested point of view of the research oriented and highly competitive academic, the effort involved in interviewing seems out of proportion to any gain in getting more congenial students. I spend the equivalent of 12 full days a year teaching in tutorials, so spending 2+ days each year in a process that might make those 12 days slightly easier is just not worth it.

One of the other unusual aspects of Oxford and Cambridge is that they remain - in theory at least - self-governing. The individual colleges that make the admission decisions certainly are run by the academics.[2] So why are Oxford academics so attached to interviewing, when it just does not seem to be in their interests?

But maybe this is not the right question. Perhaps the majority of Oxbridge academics would happily give up interviewing, but for some reason this preference is not getting realised. I could at this point talk about the peculiarities of decision making at Oxford (and peculiar is the right word), but I think there may be a more general issue here.

Decision making in large organisations like universities is often run through committees, or through delegation to ‘volunteers’. Most academics, even though they may enjoy teaching students, are primarily interested in research (either intrinsically, or because it determines future career prospects). As a result, they will tend to avoid taking positions where they have to think about non-research related issues (like being on department or university teaching committees), and try and avoid administrative duties more generally. However a minority will have different priorities, and so they will take those positions. They may as a result take decisions which divert academics away from research, given their own interests and responsibilities. It may be these people who are taking decisions about interviewing, and not your more typical research focused academic.

Some of my former (non-Oxford) colleagues wrote a paper about this general issue some time ago [3], and although they did not apply it to universities, I suspect it may have been their inspiration. In many organisations this problem is dealt with by a strong central authority, but universities often do not have that, and Oxford and Cambridge certainly do not. So even if the majority of academics did want to stop interviewing, they cannot exercise this preferences, because they have delegated decision making to others who have different interests and priorities. Who knows if this is right, but maybe I have just thought up a good interview question!
    
[1] Bhattacharya, Kanaya and Stevens (2012), Are University Admissions Academically Fair? Oxford University Discussion Paper No. 608. Note (Table 2) that interview scores are very significant in deciding who is admitted, but have a weaker correlation with first year exam results compared to other pre-admission evidence.

[2] For UK universities, research performance is the key incentive, because of the UK’s research assessment exercise. So I suspect a strong, top down central authority would quickly decide that interviewing was a non productive distraction. 

[3] Bulkley, G., Myles, G.D. and Pearson, B.R. (2001), On the Membership of Decision-Making Committees, Public Choice, 106, 1-22.

Teaching macroeconomics after the crisis

A slight variation on an old theme

                I was asked the other day how macroeconomics teaching at Oxford had changed as a result of the Great Recession of 2008-9. My answer, which was not much, seemed a little surprising at first. Does this reflect insularity or intellectual arrogance? Surely the failure to foresee the financial crisis must have led to some change in what was taught. Does this not confirm something rotten at the heart of economics?

                First I need to explain ‘not much’. [In what follows I only deal with core macro courses, and not options at either undergraduate or graduate level.] John Vickers, who gives the first year macro lectures, has added material on bank runs, leverage and banking reform, where for the latter he has of course played a major role in current UK policy. My own second year undergraduate lectures include a wealth of topical examples to illustrate basic theory. And perhaps most significantly, Martin Ellison now gives a couple of weeks of lectures on recent developments in modelling financial frictions as part of the core post-grad macro course.

                So why was my answer not much? Because although the crisis has added material, nothing has really been thrown away as a consequence of what has happened. We have not, either individually or collectively, decided that the Great Recession implies that some chunk of what we used to teach is clearly wrong and should be jettisoned as a result. Speaking for myself and my second year undergraduate lectures, quite the opposite is the case. As Paul Krugman has pointed out many times, recent developments have in many ways been a vindication of the basic Keynesian model that lies at the heart of any undergraduate macro course.

                Indeed, I would go even further. The mess we are currently in is due in part to policy makers ignoring this basic macroeconomic analysis. As a result, I teach this stuff with renewed vigour and determination. As many people know, both our current Prime Minister and the Leader of the Opposition will have attended a past version of the course I teach (although well before, I hasten to add, I started teaching it). Although George Osborne read Modern History at Oxford (and here ‘modern’ means from 1330, so the Great Depression was not necessarily covered in depth!), one of his principle advisors also read PPE (Politics, Philosophy and Economics). If any future Prime Minister or Chancellor follows a similar path, I want them to remember basic macro theory.

                Now I also teach the first part of the core macro for our MPhil (Oxford’s two year masters) course, and you might think that the basic Ramsey model which is covered there has less relevance to recent events. To some extent this is true: I’ve noted how the standard intertemporal consumption model is not going to explain trends in savings in the UK or US over the last few decades, and my colleague John Muellbauer has written extensively on this. On the other hand, I find the Ramsey model and its OLG variant very useful in discussing issues around the control of government debt.

                So while the Great Recession has clearly shown that macroeconomics is incomplete in important respects, it has not shown that what we thought we knew is all wrong.  In many respects it has shown it is exactly right.

                However I think I should add one important rider to this. Anyone wanting to understand what has happened over the last five years would be better off reading an undergraduate macro textbook like Mankiw than a masters textbook like Romer. This is not because the former is less technical than the latter, but because the former is more old fashioned in academic terms. They might do even better still by reading The General Theory. Before I am misunderstood, I am not suggesting anything is wrong with what we currently teach. Rather that the inevitable focus at the masters level on the recent macroeconomic literature leaves no place for the history of macroeconomic thought, and that is a problem.

                Now I must confess two things here. First, I have not always held this view. Indeed until quite recently, when I thought most macroeconomists signed up to the New Neoclassical Synthesis, I imagined economics might be like a physical science, where knowledge of bygone theory added little to our understanding of the world today. The Great Recession changed that view, for me at least. Second, this argument to teach the history of macroeconomic thought is one that tends to be made by those of a certain age, and even though they might also be very eminent (for example), don’t we all want to pretend we are still young? Well maybe it’s time to admit my age.