Peterson Institute Fires Three Scholars Due to Conflicts of Interest

The Peterson Institute for International Economics (PIIE), one of the world's top economic think tanks, has recently fired three scholars for violating conflict of interest policies.  Here is more from the New York Times (in collaboration with the New England Center for Investigative Reporting), which has just published a two-part series highlighting the lack of independence at many major US think tanks:

Adam S. Posen, the president of the Peterson Institute, considered the world’s pre-eminent think thank on global economics, has a commanding view of the construction of the new headquarters for the American Enterprise Institute, as well as the main office of Brookings. From his grand office, he recently had a series of uncomfortable conversations with three scholars he had decided to let go.

After much internal debate, Mr. Posen decided to formally prohibit Peterson’s scholars from holding outside jobs that directly related to the field they wrote about on behalf of the think tank.

The three who had such outside engagements were terminated.

Mr. Posen noted that the change did not imply the researchers had done anything wrong. But tighter rules are needed, he said, to respond to a growing sense he shares with the Peterson board that the think tank industry must reassert its commitment to impartiality.

PIIE is reportedly updating its conflict-of-interest policies in the wake of recent reports shining a light on think tank independence.

How Trump Sees Think Tank Land?

Dan Drezner has a new piece in The Washington Post entitled "Grant-writing in the Trump Administration," in which he pretends to write a message to the National Science Foundation (NSF) seeking a grant for research on economic sanctions.

In the parody piece, he argues that his work would be better than that of the think tank Peterson Institute for International Economics (PIIE).  Here is more:

I want you, the NSF, to give me tremendous amounts of money to research economic sanctions. You should do this because everyone else researching sanctions is stupid. Just so unbelievably dumb.

The Peterson Institute for International Economics is a DC think tank in a funny-looking building that produces nothing but low-class research. I’ve seen how they operate, all they do is say “on the one hand, on the other hand.” Enough with the hands! We don’t need that kind of weak-ass research anymore.

If you give me the money — or, better yet, make the no-talent hacks I talked about in the last paragraph pay for it — I will produce the best, the classiest economic sanctions research you will ever see. There’s gonna be so much great research, you’ll get sick of it all. The research will come in fancy binders. And I will hire only the best people, recruit top-notch graduate students. American graduate students, no foreigners. In fact, I was thinking of starting a Sanctions University...

PIIE was just ranked as the top international economics think tank in the world by the annual University of Pennsylvania think tank rankings.

Here is how Steven Rattner recently described the crowd at PIIE.

Steven Rattner Describes Crowd at Peterson Institute

Here is how Steven Rattner describes the Peterson Institute for International Economics (PIIE):

A few days ago, I visited the shiny headquarters of the Peterson Institute for International Economics on “think tank row” in Washington — basically, the locker room of the Team Globalization and Free Trade cheering squad.

I was there to take part in a discussion of an old friend’s outstanding book on the subject, Steven R. Weisman’s “The Great Tradeoff: Confronting Moral Conflicts in the Era of Globalization.”

...Then I went rogue and uttered two blasphemous words: “Ross Perot.” He had a point, I said heretically, when he campaigned in 1992 against the landmark North American Free Trade Agreement, saying that it would result in a “giant sucking sound” of jobs headed south to Mexico.

A cool breeze drifted toward me.

As I looked out at my audience, I realized that the room was filled with winners — folks who, from all appearances, earned their livings from intellectual labor. Neither their jobs nor their wages were in jeopardy as countries ranging from Vietnam to Colombia became more competitive with us.

PIIE is certainly one of free trade and globalization's biggest proponents, and it always has been.

While at PIIE (formerly known as the Institute for International Economics), the scholar John Williamson coined the term "Washington Consensus," which is often seen as synonymous with globalization and neoliberalism.

Just last month the think tank came out with a study on the benefits of the Trans-Pacific Partnership (TPP), and bashed a competing study by Tufts University that did not support its findings.

PIIE Bashes Tufts for Its Competing Trade Study

The pro-traders at Peterson Institute for International Economics (PIIE) do not seem to like competition when it comes to free trade studies.

In a blog post, PIIE scholar Robert Lawrence defended his think tank's recent study on the Trans-Pacific Partnership (TPP), arguing that it is far superior than a Tufts University study on TPP that was just released but had very different findings.

Lawrence argues that the Tufts study, which estimates that TPP would reduce US income by 0.5%, reduce employment by almost half a million jobs, and increase income inequality, has faulty methodology.  Among other things, the PIIE study predicts that TPP would raise real incomes 0.5% by 2030.

Scholar Jared Bernstein, a former top economic adviser to Vice President Joe Biden and Senior Fellow at the Center on Budget and Policy Priorities (CBBP), defended the Tufts study at the National Press Club.

The PIIE study, entitled "The Economic Effects of the Trans-Pacific Partnership: New Estimates," was written by Peter Petri and Michael Plummer.  The Tufts study, entitled "Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement," was written by Jeronim Capaldo and Alex Izurieta, with Jomo Kwame Sundaram.

The Tufts study cites a couple of PIIE studies in its reference section, and likewise, the PIIE study cites a couple of Tufts studies, including the most recent one.

Lawrence has been a Nonresident Senior Fellow at PIIE since 2001, and is the Albert L. Williams Professor of Trade and Investment at the John F. Kennedy School of Government at Harvard University.

Think Tank Watch is not taking sides, but we predict that both of the predictions in the study will be wrong.

Update:  Here is a piece in Salon entitled "TPP: Written By And For the Rich to Further Enrich Themselves at Our Expense," which blasts the PIIE report on TPP.