What makes a great economist? A willingness to address the toughest questions in political economy, certainly, and provide answers, no matter how unpopular they might be. But playfulness also matters. A willingness to turn an idea on its head, or try it on like a hat, and engage others in that play. Playfulness can be contagious, after all, and through play, more doctrine can be overturned than in any intellectual duel.
All the more reason, then, to mourn the untimely death of Harvard University economist Alberto Alesina, this year’s co-winner of the Manhattan Institute’s Hayek Book Prize. Alesina, 63, died this past weekend of cardiac arrest while hiking. Early in his career, he demonstrated a willingness to take up controversial topics, sort through the evidence, and stand up for his conclusions, wherever they might lead. Italian-born, Alesina grew up in a Europe whose politicians wanted more control of central banks, arguing that this would make for healthier national economies. One of his first academic studies, in the 1980s, suggested the opposite: that nations with more independent central banks also tended to have less inflation. The young professor came to many Americans’ attention for his work on economic redistribution. Alesina showed that voter support for redistribution by the national government was stronger in countries where social mobility was perceived to be minimal, and weaker in countries where social mobility was considered robust. His insight into the desperation of envy inspired many politicians to focus on economic growth rather than economic leveling.
As Nathaniel Ropes Professor of Political Economy at Harvard, Alesina continued to challenge received wisdom. Today, “austerity” is almost a dirty word in public debate, though most leading Western nations will have to implement some form of it. When they do acknowledge the need for austerity measures, governments usually opt for tax increases. In his 2019 book Austerity, for which, with coauthors Carlo Favero and Francesco Giavazzi, Alesina won the Hayek prize, he not only recognized the inevitability of austerity but also supplied key evidence that tax hikes are not the best answer for indebted nations. Surveying data from around the world, Alesina and his colleagues argue that indebted nations serve their economies and people better when they cut back spending, rather than using fiscal tools such as tax increases.
Alesina emphasized fiscal responsibility, an increasingly rare position in the economics trade. Indeed, says Peter Boettke, University Professor at George Mason University, Alesina had become “the last great voice for fiscal responsibility within the elite of the economic profession.”
Alesina should be remembered also for his ability to hunt until he discovered credible metrics that explain economies and societies—and their mysteries. One such quirky measure was his Squiggliness Metric, used to study why some nations fail and others thrive. Alesina found that nations with “squiggly” borders are more likely to succeed than nations with ruler-straight borders. The reasons why are intuitive: when international diplomats rearrange a region at a peace negotiation, they draw borders that seem arbitrary to the inhabitants. By contrast, nations built from within, often gradually and on ethnic lines, tend to evolve “squiggly” borders that reflect geographic features or divisions developed over time. Another useful Alesina metric could be called the Plough Metric, which he identified together with Paola Giuliano and Nathan Nunn. The three showed that regions that had long relied on ploughs—heavy agriculture—in their economies were less likely to practice gender equality in their workplace. The reason, again, was intuitive: the all-important plough work in agricultural societies required upper-body strength mainly present in men. Alesina’s work gave his readers gratifying quantification of what common sense already told them was true.
It’s this imaginative approach that may have helped Alesina achieve the rank and influence he did. His findings tended to support markets and smaller government, which made him a frequent target of more progressive economists, such as Paul Krugman. Rather than take the bait of insult, however, Alesina tried to unite, not fight. Some of that came from his personal humility. “Alberto was already his warm, humble, brilliant self in his graduate student days (as those of us who knew him then will recall),” wrote his fellow economist, UC Berkeley’s Barry Eichengreen, on Twitter yesterday. “He never changed.” Boettke hopes that Alesina’s “intellectual example inspires a new generation of scholars to pursue political economy” as he did—playfully, honestly, and with an awareness of the power of markets.
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