Professional Disequilibrium: Conflict of Interest in Economics

Abstract

<p>The economics profession lags behind others in adopting policies to regulate conflict of interest. The purposes of conflict of interest regulations, which are often misunderstood, are to minimize bias in research and maintain confidence in the profession. With only minimal rules of professional ethics (such as those in the American Economics Association code), the work that economists publish and advice they give are at risk of manifesting analytic bias and generating public distrust. More effective procedures for regulating conflicts must go beyond disclosure. They include divesting, creating blind trusts, pooling multiple sources of support, and establishing an independent oversight bodies. Some relationships may have to be prohibited when the source of support is closely related to the research. Failure to deal with the challenge of conflict of interest is likely to undermine efforts to address the other serious problems the profession faces today.</p>