Ego trips to the grave: Status competition among German fighter pilots during World War II

Philipp Ager, Leonardo Bursztyn and I have a new working paper, called "Killer Incentives: Status Competition and Pilot Performance during World War II". A short VOXEU column is here. We look at German fighter pilots' victory claims during World War II, and examine the effects of status competition on risk-taking and performance. When a former peer is being recognized, good pilots try harder and score more, but don't die more often; mediocre pilots score a tiny bet extra, but get themselves killed at a much higher rate. In other words, pilots act as if they would rather die than be trumped by someone who they used to fly with in the past.

We discuss why we think this behavior is unlikely to reflect learning about your own type ("Jack is great, I see, and I wasn't that much behind him in school...") or correlated social learning (where some skill both pilots picked up in the past becomes useful all of a sudden, inducing spurious correlations), show that things hold for the Eastern and Western fronts, and for officers and non-commissioned officers/privates

Here is the abstract:

A growing theoretical and empirical literature shows that public recognition can lead to greater effort amongst employees. At the same time, status competition can be associated with excessive expenditure on status goods, higher risk of bankruptcy, and more risk taking amongst money managers. In this paper, we look at the effects of recognition and status competition jointly: We focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly victory scores of over 5,000 German pilots during World War II, we find corrosive effects of status competition: When the daily bulletin of the German armed forces mentioned the accomplishments of a particular fighter pilot, his former peers perform markedly better. Outperformance is differential across skill groups. When a former squadron peer is mentioned, the best pilots try harder, score more, and die no more frequently; average pilots win only a few additional victories, but die at a markedly higher rate. Our results suggest that the overall efficiency effects of non-financial rewards can be ambiguous in settings where both risk and output affect aggregate performance.

For once...

I was just handling a submission at the EJ. All 3 reports were in after 54 days. Two said r+r, one said accept with revisions. Accepted conditional on some changes.

The referees were succinct and to the point, and while the paper was in some sense "competing" for some of them, they were open-minded and very fair. For once, I feel that I handled a paper the way I would like to -- more like my own experience at PNAS was, where the first round was approximately four weeks and the second, a week -- from submission to accept in five months or so, with most of that due to revisions.

Some people say it cannot be done in economics, that the field is too amorphous and standards of excellence too heterogenous for that, but I don't agree. Research is a conversation, and I don't find it reasonable to ask authors to demonstrate that what they are saying/doing is the final truth... as long as it is important and well-done. 

German Cronyism and State Banks

Some 15 years ago, Ron McKinnon asked me why German state banks were not a source of major corruption, as they were in Brazil. I told him I had no idea, and wasn't sure if that assumption was actually true...

So now there is a clever new paper that shows precisely this. It's by Haselmann, Schoenherr, and Vig. Here's the abstract:

We employ a unique dataset on members of an elite service club in Germany to investigate how elite networks affect the allocation of resources. Specifically, we investigate credit allocation decisions of banks to firms inside the network. Using a quasi-experimental research design, we document misallocation of bank credit inside the network, with state-owned banks engaging most actively in crony lending. The aggregate cost of credit misallocation amounts to 0.13 percent of annual GDP. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stifle economic prosperity.

The data underlying this is nothing short of amazing. I came across this because it connects with some recent work I have done on the dark side of social capital, but I think the measurement of misallocation method could be used in a wide variety of settings (not invented by Haselmann et al., as a matter of fact) -- if one could get the data.

Trump and Hitler - Part II -- The Shadows of 1933

Continuing my earlier post... after being asked by many friends and acquaintances about this, here is my attempt to think through the troubling parallels with 1933, between the "Seizure of Power" by Hitler and the surprise election of Trump. Of course, Trump is no Hitler, and history doesn't repeat itself -- at least not 1:1. With that in mind, this is my small checklist of things that look, broadly speaking, similar - and those that do not:

Similarities:

• A broad groundswell of dissatisfaction with the status quo, and especially the politicians seen to be responsible for it.
• Related to this, a message by the strongman that combines nationalism, xenophobia, and a sense that one's own country has been headed in the wrong direction for some time. Let's make America great again? Deutschland erwache (Germany, wake up -- meaning a rebirth of Germany as a strong and proud nation once more). Your own country is amazing, ueber alles, but it has recently fallen into an abyss. And part of what has gone wrong is that the wrong people have been let in -- Jews in the case of Germany, Latinos in the case of the US. 
• A growing sense of economic despair -- easy to rationalize in Depression Germany, harder to explain in the US in 2016, where things are mostly going well (though some distress is clearly evident in the rust belt).
• Voters who are more enthused about "teaching a lesson" than what the candidate they voted for actually stands for. Germans in 1932 didn't go through a checklist of policy items that the Nazis supported, from war to genocide, and liking every point, ticked the box for the Führer; they mostly had enough of austerity, misery, the politics of gridlock and seeming ineffectiveness of democratic leaders. Related to this, a surprising willingness to tolerate crassness and a complete lack of tact and etiquette from the leader in question... If you had told me that anyone can insult women the way Trump did, on the record, and have ANY chance to be elected, I would have laughed six months ago. The Hitler movement, of course, outdid any of this in terms of public declarations about what they would do once in power, what to think of their opponents, etc.
• A lackadaisical disregard for the finer details and a belief in the "triumph of the will". Neither Hitler nor Trump care(d) about details, and sweating over the fine print of proposals is not their thing (a big difference with Stalin, who made a very effective bureaucrat-in-chief).  Watching the debates, it is very hard to believe anyone took Trump seriously as a man to lead political decision-making. But then, who would ever think that a foaming-at-the-mouth Austrian with a funny moustache could be taken seriously by anyone?
• Neither got a majority of the vote. Hitler maxed out at 44% in the semi-free election of March 33; Trump failed to win 50% of the vote.
• A right-wing elite that thinks they can control the populist strongman. Here, the Republican leadership sounds awfully like former Vice Chancellor von Papen and friends. They famously thought of Hitler as the "drummer" -- a populist whose appeal was useful to them but could be controlled easily. 
• A democracy where significant parts of the population have given up on central elements of their constitution - not quite the "democracy without democrats" that historians write about in the case of Weimar, but one in which one of the oldest democracies on earth is basically governed by people (who were in turn elected by many of the people) who think the constitution is a joke, checks and balances are for woozies and elected representatives on average deserve no respect.
• A center-left elite that largely fails to take the threat seriously. German newspapers in late December 1932 were congratulating themselves that the Nazi menace was receding, and that Hitler would never become Chancellor. Enter the "big data" political forecaster-quacks here, and an elite discourse that underestimated Trump from the first day of his candidacy until the 8th of November.
• A great willingness to use military force to further one's ends, and not only as a last resort.
• A stock market that seems to like what it sees...
• A willingness to use infrastructure (and deficit) spending to get the economy going again.
• A rejection of internationalist organizations and multilateral solutions for world-wide problems - the League of Nations in the case of Hitler, the climate change accords in the case of Trump. 
• A willingness to visit violence on the opponent. Ok, this is a bit of a stretch. The Nazis organized street fighters, the storm troopers, who not only beat up Communists and democrats, but committed murder -- murder, condoned in some cases directly by the Nazi leaders -- like the infamous Potempa murders of 1932. Trump did not condone anything like that, or organize systematic violence, but... those comments about Hillary Clinton's security detail do sound awfully like an invitation to political murder.
• A very loose sense of economic reality. Hitler clearly had no coherent economic program, other than spending on roads and arms and worrying about the consequences later. If there was any sense in Nazi policies, it was accidental or the result of right-wing elite input. Trump's economic policies so far are equally farcical... ok, perhaps not on the scale of Feder money (the idea that bills should lose their value within a pre-specified period).

Differences:

• While Trump's rhetoric against Latinos is pretty amazing, he doesn't think of them as all-powerful puppet masters controlling the US today. Whatever went wrong in the US recently, according to Trump, is not directly driven by Latinos themselves; their presence is a symptom, not a cause of what he and his supporters think is a malaise
• German fascism had, if anything, a more progressive image of women. While there was a big policy push to get them out of the workforce, and back to children and the kitchen -- there was also a celebration of "Germanic" heroines like the test pilot Hannah Reitsch, or the filmmaker Leni Riefenstahl.
• No belief in "Lebensraum" -- there is no potty theory leading Trump to push for territorial expansion. 
• A conciliatory start. Hitler and friends did not begin their reign by trying to suddenly sound moderate and generous towards their internal opponents (though they did go easy in terms of foreign policy aggression until Germany was stronger militarily...)
• Hitler was very eloquent and a highly talented public speaker. Nobody can accuse Trump of either...
• The right-wing elite in Weimar supported Hitler (in the end); in the US, they mostly opposed Trump. We'll see where the opportunists jump once the inauguration has taken place.
• No aftermath of military defeat that affected voting intentions and everyday politics, as did WW I and reparations. No hyperinflation that destroyed a good part of the wealth of the middle class (ht/ Laurence Copeland).
• No business empire to take care of in the case of Hitler; while he liked money and rewarded the tax inspector who left him alone over unpaid income tax for "Mein Kampf", there was no secondary business agenda there that might interfere with political aims.

So what does it all mean? Some kind of autocracy is coming. Something somewhere between Putin and Berlusconi, if we are lucky; something worse if we are unlucky. The thing that gets me the most is the almost pathological unwillingness on the left to believe what the candidate has been saying... Hitler's program was available in print, and Donald Trump is not an empty slate that deserves "an open mind". Both have an agenda, and unbelievable, even unimaginable as they seemed just shortly before, they both probably mean every word. In the face of a political elite that is fast flip-flopping to the winning side, a spineless media, and a large silent majority of people who don't give a fig about their democracy, I don't put too much trust in institutions, the checks and balances of the US constitution, or civic society stopping even the worst excesses. How bad could this get? Gratuitous wars in, say, the Middle East (Iran), the Far East (Korea), or Latin America (Cuba)? Possible, but perhaps not that likely. The professional input from the Pentagon will limit what can happen, to some extent -- but as we saw with GWB, only to some extent. Protectionism? It's a wild card; if Trump is energetic and focused, the US withdraws from the WTO and repeals NAFTA, this can start to look amazingly ugly quite quickly. A brutal rift within NATO that de facto abandons the Baltic Republics to a resurgent Russia? Not likely, but suddenly a possibility. Deportation of illegal immigrants and the wall? Don't rule that out at all; deportations rates have varied a lot, and were actually up under Obama; there is something awkward about tolerating a large number of people who are breaking the law in one's country, and while the social consequences of suddenly righting this are very ugly, there are many fascets to this argument. A lot of pressure on the media to fall into line? For sure. And a Supreme Court that can roll back decades of social progress, down to Roe vs Wade; very likely. Hugely expanded powers for snooping and incarcerating people suspected of terrorism, including US citizens; again, quite likely. An attack on affirmative action and the like? Possible. All of this is suddenly within reach as possibly acceptable policies, and the greatest hope is that "they don't mean it" and that implementation will not be very vigorous. I hope I am wrong, but to me it looks like the world in four years time will not look like a place you imagined possible 6 months ago.

This is incomplete and will be revised as my thinking evolves... but I think the most important - and troubling - analogies are a) the willingness to condone unthinkable behavior on the part of voters, b) a sense - both exhilarating and reckless - that throwing out the bums in Washington is worth any price, and c) a cult of the "big picture strongman".

Trump and Hitler - Part II -- The Shadows of 1933

Continuing my earlier post... after being asked by many friends and acquaintances about this, here is my attempt to think through the troubling parallels with 1933, between the "Seizure of Power" by Hitler and the surprise election of Trump. Of course, Trump is no Hitler, and history doesn't repeat itself -- at least not 1:1. With that in mind, this is my small checklist of things that look, broadly speaking, similar - and those that do not:

Similarities:

• A broad groundswell of dissatisfaction with the status quo, and especially the politicians seen to be responsible for it.
• Related to this, a message by the strongman that combines nationalism, xenophobia, and a message that one's own country has been headed in the wrong direction. Let's make America great again? Deutschland erwache (Germany, wake up -- meaning a rebirth of Germany as a strong and proud nation once more). Your own country is amazing, ueber alles, but it has recently fallen into an abyss. And part of what has gone wrong is that the wrong people have been let in -- Jews in the case of Germany, Hispanics in the case of the US. 
• A growing sense of economic despair -- easy to rationalize in Depression Germany, harder to explain in the US in 2016, where things are mostly going well (though some distress is clearly evident in the rust belt).
• Voters who are more enthused about "teaching a lesson" than what the candidate they voted for stands for. Germans in 1932 didn't go through a checklist of policy items that the Nazis supported, from war to genocide, and seeing what they liked, ticked the box for the Führer; they mostly had enough of austerity, misery, the politics of gridlock and seeming ineffectiveness of democratic leaders. Related to this, a surprising willingness to tolerate crassness and a complete lack of tact and etiquette from the leader in question... If you had told me that anyone can insult women the way Trump did, on the record, and have ANY chance to be elected, I would have laughed six months ago. The Hitler movement, of course, outdid any of this in terms of public declarations about what they would do once in power, what to think of their opponents, etc.
• A lackadaisical disregard for the finer details and a belief in the "triumph of the will". Neither Hitler nor Trump care(d) about details, and sweating over the fine print of proposals is not their thing (a big difference with Stalin, who made a very effective bureaucrat-in-chief).  Watching the debates, it is very hard to believe anyone took Trump seriously as a man to lead political decision-making. But then, who would ever think that a foaming-at-the-mouth Austrian with a funny moustache could be taken seriously by anyone?
• Neither got a majority of the vote. Hitler maxed out at 44% in the semi-free election of March 33; Trump failed to win 50% of the vote.
• A right-wing elite that thinks they can control the populist strongman. Here, the Republican leadership sounds awfully like former Vice Chancellor von Papen and friends. They famously thought of Hitler as the "drummer" -- a populist whose appeal was useful to them but could be controlled easily. 
• A democracy where significant parts of the population have given up on central elements of their constitution - not quite the "democracy without democrats" that historians write about in the case of Weimar, but one in which one of the oldest democracies on earth is basically governed by people (who were in turn elected by people) who think the constitution is a joke, checks and balances are for woozies and elected representatives on average deserve no respect.
• A center-left elite that largely fails to take the threat seriously. German newspapers in late December 1932 were congratulating themselves that the Nazi menace was receding, and that Hitler would never become Chancellor. Enter the "big data" political forecaster quacks here, and an elite discourse that underestimated Trump from the first day of his candidacy until the 8th of November.
• A great willingness to use military force to further one's ends, and not only as a last resort.
• A stock market that seems to like what it sees...
• A willingness to use infrastructure (and deficit) spending to get the economy going again.
• A rejection of internationalist organizations and multilateral solutions for world-wide problems - the League of Nations in the case of Hitler, the climate change accords in the case of Trump. 
• A willingness to visit violence on the opponent. Ok, this is a bit of a stretch. The Nazis organized street fighters, the storm troopers, who not only beat up Communists and democrats, but committed murder -- murder, condoned in some cases directly by the Nazi leaders -- like the infamous Potempa murders of 1932. Trump did not condone anything like that, or organize systematic violence, but... those comments about Hillary Clinton's security detail do sound awfully like an invitation to political murder.
• A very loose sense of economic reality. Hitler clearly had no coherent economic program, other than spending on roads and arms and worrying about the consequences later. If there was any sense in Nazi policies, it was accidental or the result of right-wing elite input. Trump's economic policies so far are equally farcical... ok, perhaps not on the scale of Feder money (the idea that bills should lose their value within a pre-specified period).

Differences:

• While Trump's rhetoric against Latinos is pretty amazing, he doesn't think of them as all-powerful puppet masters controlling the US today. Whatever went wrong in the US recently, according to Trump, is not directly driven by Latinos themselves; their presence is a symptom, not a cause of what he and his supporters think is a malaise
• German fascism had, if anything, a more progressive image of women. While there was a big policy push to get them out of the workforce, and back to children and the kitchen -- there was also a celebration of "Germanic" heroines like the test pilot Hannah Reitsch, or the filmmaker Leni Riefenstahl.
• No belief in "Lebensraum" -- there is no potty theory leading Trump to push for territorial expansion. 
• A conciliatory start. Hitler and friends did not begin their reign by trying to suddenly sound moderate and generous towards their internal opponents (though they did go easy in terms of foreign policy aggression until Germany was stronger militarily...)
• Hitler was very eloquent and a highly talented public speaker. Nobody can accuse Trump of either...
• The right-wing elite in Weimar supported Hitler (in the end); in the US, they mostly opposed Trump. We'll see where the opportunists jump once the inauguration has taken place.

So what does it all mean? Autocracy is coming. Something somewhere between Putin and Berlusconi, if we are lucky; something worse if we are unlucky. The thing that gets me the most is the almost pathological unwillingness on the left to believe what the candidate has been saying... Hitler's program was available in print, and Donald Trump is not an empty slate that deserves "an open mind". Both have an agenda, and unbelievable, even unimaginable as they seemed just shortly before, they both mean every word. In the face of a political elite that is fast flip-flopping to the winning side, a spineless media, and a large silent majority of people who don't give a fig about their democratic institutions, I don't put too much trust in institutions, the checks and balances of the US constitution, or civic society stopping even the worst excesses. The world in four years time will not look like a place you imagined possible 6 months ago.

This is incomplete and will be revised as my thinking evolves... but I think the most important - and troubling - analogies are a) the willingness to condone unthinkable behavior on the part of voters, b) a sense - both exhilarating and reckless - that throwing out the bums in Washington is worth any price, and c) a cult of the "big picture strongman".

Trump and Hitler - Part I

So, I was in Stanford on Monday, giving a talk at the Political Science Department about how building the Autobahn swayed German voters after 1933 to support the Hitler government. At dinner... we barely talked about the election, or Trump. And when we did, I was the only one who confessed to a feeling that this was about to go wrong in a big way. Now, I have been wrong with pessimistic predictions many times, but this one seemed just like an accident waiting to happen.

Now, friends on the left (ie. almost everyone I know) keep asking me what the parallels with 1933 are. Here is the google trends data for the search terms trump + fascism:

At first pass, one could think this is absurd. Trump most likely doesn't have a plan for world domination through a murderous war, nor is he likely to preside over mechanized genocide on a huge scale... but there is an increasing discussion whether it makes sense to compare Trump with 20C fascists more broadly.

Brad Delong sends us to the always-thoughtful Gideon Rachman:

Gideon Rachman: Is Donald Trump a Fascist?: "Labeling a politician a fascist is not usually helpful...

...[In] 1944, George Orwell wrote....

It will be seen that, as used, the word ‘Fascism’ is almost entirely meaningless.... I have heard it applied to farmers, shopkeepers, Social Credit, corporal punishment, fox-hunting... Kipling, Gandhi, Chiang Kai-Shek... and I do not know what else.

And yet... different commentators have pointed to different aspects of the Trump campaign to justify applying the “f-word”. Andrew Sullivan... Trump “has violated and eroded the core norms that make liberal democracy possible”.... [For] Robert Kagan... fascism is... an ideological mess... [plus] a veneration of the strongman.... Robert Reich... [also] points to Trump’s veneration of strong leadership, alongside his nationalism and the undercurrent of violence in his movement, adding – “The content of what he says is utterly irrelevant. It is the style.”...

If you are looking for some academic rigour to be brought to this debate, there is no better authority than Robert Paxton, a professor at Columbia University and author of “The Anatomy of Fascism”. Anybody expecting a genuine academic to pour cold water on loose journalistic talk that Trump is a fascist might be sobered by Paxton.... Paxton... note[s that]... Trump... does not have his own militia to call upon. There are, as yet, no Trumpian equivalents of Mussolini’s “blackshirts” or Hitler’s “brownshirts”.... Even if Trump falls short, his extraordinary popularity says something very worrying.... As a recent New York Times review of Volker Ullrich’s new biography of Hitler puts it:

What is truly frightening in Ullrich’s book is not that a Hitler could exist, but that so many people seemed to be secretly waiting for him.

I am not particularly sure that this is the truly frightening thought. Once you think about what made the German dictatorship of 33-45 possible, one ends up wondering why similar stuff doesn't happen with much greater frequency...

Of course, there is a very real discussion if fascism is actually a helpful analytical concept at all. What do men like Franco - great fans of the Catholic church, deeply conservative in social matters -- have to do with Hitler and Mussolini? The anti-Jewish stance of the latter is almost an afterthought, etc. The key parallels seem few, other than being strongmen with a taste for violence. 

Next up, when I have a minute -- what I see as the key differences and similarities between Germany 1933 and the US 2016...

Editing the Economic Journal

I have been an editor at the EJ for a year now. These are some reflections. They do not represent any "official" communication of the journal. They are simply a way for me to document and think through some of what I have learned:

• editing a "general interest" journal is pretty hard. Don't we all like to complain as authors? That unfair decision, this long delay. Yes, I did that quite a few times, too. Now I am at the other end - not at a top-5 journal, but a decently ranked and cited general interest one. In the two economic history journals I edited, I typically knew the literature inside out, and could call on 'friends and family' to help me out in assessing the papers (meaning faster turnarounds). This is much harder in a GE journal, where all the editors will sooner or later have to handle a paper further from their expertise
• I think my statistics are ok, but I need to learn to take into account that fewer referees are friends and acquaintances. Editorial Express (which I love) tells me this about decision times of all submissions that crossed my electronic desk:

Mean= 32 Min=0 Max=181, Median 13, std= 36, n=190

So I took on average 32 days to make a decision; the median time was 13 days. This is the effect of desk rejections, which I try to do within a day or two. Once the paper is with referees, it is impossible to do things in much less than 40 days. The maximum time to decision I am not proud of -- 181 is way too long, but it was one of the cases where an important referee first said "yes", only to postpone several times before defaulting entirely, which meant that I had to appoint another one. If referees don't sign on, it's normally a bad sign; I should perhaps factor in the reluctance to take the paper on as a signal of quality (much as one would in a tenure case).

• desk rejections are crucial. I handled almost 200 papers in my first year. It is not in the author's interest to have the paper rejected after 50 days when the ex ante chance is very low. By rejecting a high share (~50% in my case), I can try and do a much better job with the rest. This is also different from Explorations and the European Review of Economic History, where the desk-reject rates in my case were a lot lower.
• there is a LOT of negative refereeing. As a QJE editor recently told me, if one only took the average of opinion received, one would almost never publish anything. He felt it wasn't like that 10 or 15 years ago... that also means that the whole process get noisier, meaning editors have to override at least some referees almost all the time to take a paper. I don't know where this wave of negativity comes from, but it is very noticeable. Referees perhaps want to be sure they don't wave through a poor paper, and impressing an editor with criticism is easier? While a lot of referees give detailed, thoughtful, helpful advice, more than a few reports read like "no, not in my backyard." I personally take a pretty dim view of strategic refereeing...
• I encourage referees to tell me about a.) the importance of the paper - if everything the abstract claims is actually true, is this an important paper? b.) the technical correctness of findings. The invitation to referee actually asks that referees do NOT write an essay on "how they would have written the paper." I have had overwhelmingly positive reactions to that; many referees have told me that this makes it much easier to return a report quickly. I sometimes feel that there has been an arms race among referees to outdo each other with 5+ page reports, especially at top journals. This is wasteful. I may try to help the author write the best one that is struggling to come out, but of course only their name goes on it -- it is the author's paper.
• I love being part of a smooth, collegiate operation. Economic history journals are by nature quite small, and there isn't much need for structure and coordination. The EJ is a big ship, and it is run very well, with full-time support, regular phone conferences and twice-yearly meetings. It is also very nice to be in a society-owned journal, not in the jaws of a shark-like commercial operation like Elsevier (owners of Explorations)
• Things just don't change very fast. There is a trickle of papers that I solicited, and some people seem to have noticed that I am an editor and send me papers in my intellectual arena, but it's a bit slower than one might have hoped...
• I think of a decision letter as a "contract", meaning that authors are in if they do what the letter requests; I don't like multiple rounds with lots of vague calls for making the referees happy. If the referees contradict each other, it's my job to figure out what is best for the paper. I have as yet not sent out the same paper more than twice to referees (original submission and resubmission).
• I am still experimenting with how much less refereeing I do for other journals. I get a lot of people excusing themselves by saying "sorry, AE at xyz journal, so I am not doing this." Specialization is such in our field that this can lead to extremely narrow choice sets for referees. I try to keep refereeing for top journals, and papers where I obviously should say something because there are not that many economic historians with knowledge of the area. The AER just gave me one of the Excellence in Refereeing Awards -- maybe I should invest a little less there? (just kidding, where the top-5 papers go is essential to how the profession ticks).

The liquidity cost of Brexit

thought that Brexit wouldn't have any immediate effect? Not so, at least if you like your wines from Spain. My favourite dealer from the Begur area offers this morsel - perhaps a tad exaggerated:

Prize competition - earn a $1,000

I have an interest in German fighter pilots during World War II (yes, it's a research project joint with Philip Ager and Leo Bursztyn). We particularly care about status competition amongst top-scoring pilots (the image on the left shows victory marking on the tailgate of a Messerschmidt).

We need data on pilot training, especially a brief history of which fighter schools people passed through (Luftkampfschule and Jagdfliegerschule). Anyone who can send me a detailed list containing that information about the top 200-scoring German aces should get in touch via email -- I promise to pay $1,000 or euro equivalent (first $500 for the first 100; the next $500 for the second).

We have tried our luck in the archives, to little avail; but it may just be possible that enthusiasts somewhere sit on this information, or something closely related... So let's see if "markets in everything" actually works (or prizes for the right kind of thing).

*** update 30-1-2017 *** We have actually located the right source for this (and no, nobody sent in the winning suggestion - just hard work with the German federal archives allowed us to locate the right place).

Goodbye SSRN

SSRN has been sucked into the Death Star of academic publishing, the Dutch company called Elsevier. The story is here. It's obvious what they are about -- making it impossible for people to read versions of papers published in Elsevier journals in a slightly earlier version. If you happen not to be part of the $40 per pdf paying crowd, that was a great alternative; find the same paper's wp on SSRN, and be done. Despite some weasly-worded promises, it's clear that this is what Elsevier wants to stop. After buying Mendeley, a platform for citation management and paper depository, Elsevier is basically trying to capture enough of the knowledge-sharing between academics to stop threats to its hyper-profitable overcharge-for-open-access-or-subscription model.

There is a credible alternative view, espoused here: that it's all about the value of data to Elsevier. I am skeptical... surely a firm like Elsevier could have gotten that kind of data for less?

Be that as it may: For the last 15 years, I uploaded my papers religiously on SSRN. I even had a line below my signature advertising my latest working papers there. It was a great platform to make stuff available. But barriers to entry are L O W. When I have a minute, I will move stuff to REPEC or IDEAS; there will surely be a competitor along that does at least as good a job as SSRN (which was never that great to start with). 

Mills and institutions

Will Goetzmann and collaborators have a new paper in circulation that looks institutional innovation over the last millennium or so... Medieval mills were high-tech and expensive to build, and it turns out that many of the things that make modern corporations tick (or not tick so well) were already tried out in the joint stock companies that financed and operated these mills. Here is the abstract:

We exploit unique archives extending over six centuries to trace the development
of corporate governance mechanisms that emerged in response to problems inherent in
organizing, capitalizing and sustaining large-scale business enterprises. Two Toulouse
milling concerns with antecedents in the 11th century organized themselves via mergers
into widely-held joint-stock companies in the years 1372 and 1373. We document the
institutional innovations they developed over the ensuing centuries, and place these
in the context of institutional economic theory. The rms adapted or invented insti-
tutional features that are widely recognizable today, including fully tradable shares,
limited liability, shareholder meetings, governing boards, cash payout policies, account-
ing audits and mechanisms for re-capitalization.

The paper has some interesting implications. First, it shows that it wasn't Northern Europe that invented the corporate form. Second, it shows that the advantages of joint stock companies seem forever elusive -- they don't out-compete other corporate forms today, and they didn't back then. This casts doubts on theories of development that put a shortage of capital center-stage. Plenty of food for thought here... 

migrating extremists

Christian Oechsner and Felix Roesner have an interesting paper on migrating extremists. When Austria was partitioned after WWII into different zones of occupation, the Russians got a bit "extra". Since the last thing you wanted as a Nazi was to be under Russian occupation, it is likely that many Nazis migrated out of that extra bit of Upper Austria coming to the Russians. Oechsner and Roesner show that in these areas, there is much more right-wing voting after 1945 than one would expect, given pre-1938 trends... and that the pattern persists to the present day, with FPÖ results inexplicably high in areas just outside the newly expanded Russian zone. Here is the abstract:

We show that migrating extremists shape political landscapes toward their ideology in the long run. We exploit the unexpected division of the state of Upper Austria into a US and a Soviet occupation zone after WWII. Zoning prompts large-scale Nazi migration to US occupied regions. Regions that witnessed a Nazi influx exhibit significantly higher voting shares for the right-wing Freedom Party of Austria (FPÖ) throughout the entire post-WWII period, but not before WWII. We can exclude other channels that may have affected post-war elections, including differences in US and Soviet denazification and occupation policies, bomb attacks, Volksdeutsche refugees and suppression by other political parties. We show that extremism is transmitted through family ties and local party branches. We find that the surnames of FPÖ local election candidates in 2015 in the former US zone are more prevalent in 1942 phonebook data (Reichstelefonbuch) of the former Soviet zone compared to other parties.

David Card

awesome portrait of an awesome economist:

http://www.imf.org/external/pubs/ft/fandd/2016/03/people.htm

Attitudes after the killing fields

There has been quite a bit of recent literature looking at the effects of exposure to war and political violence on attitudes. Couttenier, Protu,  Rohner and Thoenig have a recent paper on immigrants in Switzerland that is beautiful in terms of identification. Now, another paper came across my desk that looks super-interesting - Lata Gangadharan and co-authors have a paper on the after-effects of the Cambodian genocide. This was one of the biggest exterminations in recent history, carried out with incredible ferocity -- probably, some 2 million Cambodians were killed, equivalent to 25% of the population.

The abstract is:

We use a field experiment to examine the long-term effects of exposure to the
Cambodian genocide (1975-1979), on individuals’ pro-social and anti-social behavior and risk
preferences. We show that individuals who were exposed to the genocide during childhood
and early adolescence are less trusting, less altruistic, and more risk averse than those who
were not exposed. Our results are corroborated by survey questions on personality traits. The
findings suggest that direct exposure to genocide during childhood and early adolescence has
a lasting impact on social capital and on attitudes towards risk and could make individuals less
extroverted and agreeable.

True "open source"

This should be the future of science: http://bigthink.com/neurobonkers/a-pirate-bay-for-science -- a way to download every paper ever written, without paywalls etc. I was glad to see that you can get "Persecution Perpetuated", say, here (thanks to whoever donated it). In general, it seems that all you need to do is to add "sci-hub.io" to the url, so that
"http://qje.oxfordjournals.org/content/127/3/1339.full" becomes
"http://qje.oxfordjournals.org.sci-hub.io/content/127/3/1339.full".

The ethics are quite clear... I just hope they don't end up the way Napster did. 

Out of the clutches of the evil empire...

I recently stepped down as editor of Explorations in Economic History. It was a fun period. Kris Mitchener and I introduced new article formats, and submission rules; turnaround times were down and submission numbers went up. Hopefully Ran Abramitzky, who took over from me, feels he inherited a house in good order.

But I want to talk a bit about the things I learned about dealing with a commercial publisher, Elsevier, which owns the title. I had heard complaints for years about how "evil" they were. I thought they did overcharge for some science titles, and Explorations is a bit too pricey too -- but not insanely so. So my prior was not particularly negative. Having a commercial motive, I hoped, would produce a focus on the bottom line and a passion for efficiency. After all, if you sell the (free) research of academics back to academic institutions, with only a few academics working for nearly free in between, you'd think they would run a smooth, efficient operation that would enable editors to focus on writing helpful decision letters so that authors know what they need to do to get in. Boy was I wrong.

Editing involves a lot of reading papers and reports, and thinking about them. It also involves a lot of looking up referees in online databases, sending them requests, loading up the reports, filing your decision letters, etc. All of this goes through online systems nowadays, and that is where the Elsevier system (and support) really falls apart. Editors work almost for free, and the tools they are given are as primitive as a stone knife. Websites are very slow. Half the functions you expect are not there, or not supported. When I started, I couldn't even add referees myself, and had to ask support staff (outsourced overseas - constantly on vacation, constantly changing, etc.) to do it. The online system is buggy, slow, and never more than one click away from firing off an offensive-sounding pre-spec'd template.

It is very clear that Elsevier doesn't care about small journals like Explorations or the academics that run them, and only treats them as cash cows without investing a penny in them. The publisher has no willingness to improve the journal, and seeing an issue through to production is harder than looking for hen's teeth.When I asked to use Editorial Express, the nearly-free (a few thousand $ a year) online system that the QJE, Econometrica, RESTUD, the EJ, etc. use, the answer was a charming "njet". I am now an editor at the Economic Journal, and one of the best things about it is Editorial Express - fast, clean, simple, and hugely user-friendly.

Should you boycott Elsevier journals? That would be at your own cost. There aren't that many highly-ranked echist journals. The best thing would be if a bunch of the good guys (led by the Clíometric Society? the EHA?) offered to take over the journal from Elsevier, stating clearly at the outset that if the answer is no, they would start a new, society-owned journal, focused at the same sweet spot between quantification and theory. Faced with the threat that EEH would go the way of the now almost entirely dead European Economic Review (after the European Economic Society left Elsevier twisting in the wind, starting JEEA instead), even Elsevier might think again. But then again... that laser-like focus on short-term returns will probably come out on top.