Economics in Sweden Economics in Sweden contains the results of one of the most comprehensive attempts to evaluate research in economics ever under- taken. A team of Swedish and international researchers, including Avinash K. Dixit, Seppo Honkapohja and Robert M. Solow, exam- ined the structure of economics in Sweden and the results it produces. They identified postgraduate education as a key area, and their findings will be of particular relevance at a time when many countries are restructuring their graduate education programmes. Sweden has made a distinctive contribution to the development of economics and the book al,llo considers the extent to which it still contributes to an increasingly international discipline. The book will be of interest not only for its specific contributions but also for its insights into the evaluation procedure. Lars Engwall has been Professor of Business Administration at Uppsala University since 1981. He has extensive research experience in both Europe and the USA. Economics in Sweden An Evaluation of Swedish Research in Economics Edited by Lars Engwall !l I~ ~?io~f!;n~~:up (:) LONDON AND NEW YORK First published 1992 by Routledge Published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an inforrna business Copyright O 1992 Lars Engwall Typeset in 10/ 12 point Times by Witwell Ltd, Southport The Open Access version of this book, available at www.tandfebooks.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. British library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 978-0-415-07256-4 (hbk) library of Congress Cataloging-in-Publication Data Economics in Sweden : an evaluation of Swedish research in economics / Lars Engwall, ed. ; with contributions by A vinash K. Dixit ... [et al.]. p. cm. Includes bibliographical references (p. ISBN 0-415-07256-5 ) and indexes. I. Economics-Research-Sweden-Evaluation. 2. Economics- Sweden. I. Engwall, Lars, 1942- HB74.9.S8E26 1992 330'.09485-dc20 Publisher's Note II. Dixit, Avinash K. 92-2786 CIP The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original may be apparent Contents Figures and Tables Contributors Abbreviations Part I Introduction and background studies Points of departure Lars Engwall Background A framework for the study The evaluation process The results of the evaluation Evaluating the evaluation 2 Economics the Swedish way 1889-1989 Lars Jonung (assisted by Elving Gunnarsson) Introduction The development of the market for professors Becoming a professor Intramural activities of the professors Extramural activities of the professors Foreign influences on Swedish professors Final reflections 3 The economics of Swedish economics in the 1980s Peter Stenkula and Lars Engwall The Swedish system for allocating research grants Methodological issues Faculty grants External research grants lX Xll xv 3 3 5 8 II 16 19 19 20 28 33 39 45 48 49 49 53 54 59 vi Contents Total resources to economics research 62 Conclusions 65 4 Recruiting a new generation 67 Eskil Wadensjo Introduction 61 The Swedish system of postgraduate education 68 The small number of theses 1 l An ageing population of Ph.D. students 80 Few women with Ph.D. degrees 83 Ph.D. degrees in economics awarded to Swedish citizens in the United States 84 The form and content of the theses 86 The faculty opponent 88 The topics of the theses 9 l The labour market for doctors of economics 94 Conclusions 102 5 Swedish economics on the international scene 104 O/le Persson, Peter Stern and Elving Gunnarsson Introduction 104 Data material 106 Publication activity and journal selection l 07 Relations with the intellectual heritage 116 Research profiles 118 Conclusions 125 Part Il The views of the international evaluation committee 6 Swedish economics in the 1980s 129 Avinash K. Dixit, Seppo Honkapohja and Robert M. Solow Swedish economics after the Stockholm school 129 Labour economics 130 Natural resources 133 Interregional economics 135 International economics 135 Public finance 138 Econometrics 139 Macro and monetary economics 140 Microeconomics 142 Conclusions 144 Contents vii 7 Organization of research 145 Avinash K. Dixit, Seppo Honkapohja and Robert M. Solow An overview 14S University departments 148 University-based research institutes l 5 l Non-university-based research institutes 1S3 Research funding 155 The general profile of research l 57 Conclusions 157 8 Postgraduate education in Sweden 1S9 Avinash K. Dixit, Seppo Honkapohja and Robert M. Solow Introduction 1S9 Scale 160 Incentives 164 Tradition 168 Conclusions 170 9 Recommendations 171 Avinash K. Dixit, Seppo Honkapohja and Robert M. Solow Summary of good and bad features of the system 171 Recommendations concerning organization of research 174 Recommendations concerning postgraduate training 180 Concluding remarks 18S Appendix A: Time schedule for the evaluation project 187 Appendix B: Professors of economics in Sweden 1741-1989 189 Elving Gunnarsson Introduction 189 Ancestors (1741-1889) 190 Modern age (1889-1989) 191 Appendix C: The role of institutions 196 l.Ars Jonung The Stockholm School of Economics 196 Lund University l 98 The Institute for International Economic Studies 199 viii Contents Appendix D: Doctoral theses in economics in Sweden 1895-1989 200 Eskil Wadensjo Introduction Old Ph.D. degrees (1895-1973) New Ph.D. degrees (1970-89) Notes and references Bibliography Glossary Index 200 200 211 233 261 275 278 Figures and Tables FIGURES I. I The stakeholders 7 1.2 The research system 7 1.3 Studies undertaken 10 1.4 Composition of the book 12 2.1 The number of chairs and departments of economics in Sweden 1889-1989 23 3.1 Distribution of faculty grants 1980-1 to 1989-90 (1989-90 prices) 56 3.2 Distribution of external grants between university cities 1980-1 to 1989-90 60 3.3 Distribution of external grants 1980-1 to 1989-90 (1989-90 prices) 61 3.4 Distribution of total research grants 1980-1 to 1989-90 (1989-90 prices) 65 4.1 Histogram over year of birth of those granted a Ph.D. in economics 1970-89 101 5.1 Percentage share of world output of articles written in English in economic journals 1973-89 - Sweden. West Germany and France, three-year weighted averages 108 7.1 The market for doctors of economics 145 7.2 Organization of research 147 TABLES 2.1 Occupants of chairs in economics 1889-1989 21 2.2 The establishment of departments with professors of economics 1889-1989 26 2.3 The four phases of economics in Sweden 1889-1989: x Figures and Tables a stylized overview 29 2.4 Age at the first appointment as professors in economics or related subjects in Sweden 1889-1989 34 2.5 Length of service as professor, 25 years or more 35 2.6 Number of newspaper articles published by Knut Wicksell, Gustav Cassel, Eli Heckscher and Bertil Ohlin 40 2. 7 Professors in economics as members of Parliament 41 2.8 The publication record of 37 Swedish professors in economics living in 1989 42 2.9 Percentage distribution of citations by language of source in Ekonomisk tidskrift and its successors: 1900, 1935, 1970 and 1988 44 3.1 Faculty grants 1980-1 to 1989-90 (KSEK) 55 3.2 Faculty grants to economics and all social sciences in 1980-1 to 1989-90 at 1989-90 prices (KSEK) 57 3.3 Relationship between total faculty grants, economics faculty grants and gross national product 58 3.4 External financing of economics research 1980-1 to 1989-90 (KSEK) 63 3.5 Total financing of economics research 1980-1 to 1989-90 (KSEK) 64 4.1 First-time registered postgraduate students in economics 1972-3 to 1989-90 72 4.2 Numbers obtaining Ph.D. degrees in economics by year of examination and university 73 4.3 Number of theses in economics 1895-1989 by type of degree and decade 74 4.4 Theses in economics 1895-1989 by type of degree and university 75 4.5 Average number of registered Ph.D. students and total number of students registered at least once as Ph.D. students in economics 76 4.6 Financial support for Ph.D. theses as indicated by prefaces to theses 79 4.7 Average age of those completing theses in economics 80 4.8 Candidates• age at examination over time (Age = a + b • time) 82 4.9 Median age of research students in economics 82 4.10 Median study time for a new Ph.D. degree in economics 1974-90 in number of terms (two terms per calendar year) 83 4.11 Theses in economics by type of degree and sex 84 4.12 Gender and age of Swedish citizens receiving Ph.D. Figures and Tables x1 degree in economics from the United States 85 4.13 Theses in economics by type of degree and language 88 4.14 New Ph.D. theses 1970-89 by language 88 4.15 Faculty opponent at oral defence of theses in economics according to type of degree and origin 90 4.16 Faculty opponent for Ph.D. oral defence in economics according to the new system 91 4.17 Theses (new Ph.D.) 1970-89 by subject and university 93 4.18 Theses in economics 1895-1989 by type of degree and ~~ ~ 4.19 Present occupation (November 1990) according to sector 95 4.20 Wage income and total earnings from employment in 1989 for those who have received a Ph.D. or Licentiate degree in economics in Sweden 1970-89 97 4.21 Earnings equations. Earnings in 1989 for those who have received a Ph.D. in economics in Sweden 1970-89 98 5.1 Articles written in English in economic journals 1973-89 - Sweden, West Germany and France 109 5.2 Distribution of authors by number of articles in Swedish economics 1973-89 110 5.3 Distribution of Swedish articles by journal during 1973-89 112 5.4 Percentage of articles in economic core journals 1973-89 114 5.5 Swedish citations in Handbooks in Economics 115 5.6 Number of articles 1973-89 citing Nobel laureates 117 5.7 Citations 1973-89 to major schools of thought in macroeconomics. Relative Citation Ratio (RCR) 118 5.8 Subject classification of Swedish SSCI-articles 1973-89 in economics by city 120 5.9 Subject classification of Stockholm articles 1973-89 in economics by major institution 122 5.10 Swedish and world articles 1973-89 in economics classified by major field 124 7.1 Staff in departments of economics, 1 July 1990 149 Contributors Avinash K. Dixit has been Professor of Economics at Princeton University since 1981. Before this he held academic posts at the University of California at Berkeley (1968-9), Balliol College, Oxford (1970--4) and Warwick University (1975-80). His education includes a BA in Mathematics from Cambridge University (1965), and a Ph.D. in Economics from MIT ( 1968). His current area of research is the theory of investment under uncertainty and its applications. He has con- tributed to the theories of industrial organization, international trade, public finance, and economic growth and development in various journal articles as well as in Optimization in Economic Theory (Oxford University Press, 1976, second edition 1990), The Theory of Equilibrium Growth (Oxford University Press, 1976), Theory of International Trade (with Victor Norman, Cambridge University Press, 1980), and Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life (with Barry Nalebuff, Norton, 1991). Lars Engwall has been Professor of Business Administration at Uppsala University since 1981. He has a Ph.D. from Stockholm University, has held research posts at Carnegie-Mellon University, University of California at Berkeley and the European Institute of Advanced Studies in Management, Brussels, and is a member of the Royal Swedish Academy of Sciences. His research, which has focused on general management problems, has been presented in a number of journal articles and books. The latter include Models of Industrial Structure (Lexington, MA: Lexington Books, 1973), Newspapers as Organizations (Farnborough: Saxon House, 1978) and Mercury Meets Minerva (London: Pergamon Press, forthcoming). Elving Gunnarsson is a lecturer (hogskolelektor) in the Department of Business Studies at Uppsala University. He gained a Ph.D. from the Contributors xiii same Department for a thesis on the development of business education in Sweden before the foundation of the Stockholm School of Economics (Frdn Hansa till HandelshiJgskola, From the Hanseatic League to a School of Economics, 1988). His present research interests focus on the interaction and demarcation between economics and business administration as academic disciplines. Sep po Honkapohja is currently Research Professor at the Academy of Finland, on leave from the University of Helsinki, and earlier at the Turku School of Economics. He has previously been Scientific Director of the YrjO Jahnsson Foundation and Managing Editor of the Scandinavian Journal of Economics. He is a member of the Academia Europaea. His main research interest is economic theory, especially macroeconomics and monetary economics. He has published numerous articles in international journals and edited several books including Frontiers of Economics ( 1985 with Kenneth Arrow), Information and Incentives in Organizations (1989) and The State of Macroeconomics (1990). Lars Jonung has been Professor of Economics and Economic Policy at the Stockholm School of Economics since 1988. He received his undergraduate training at Lund University and his Ph.D. from the University of California, Los Angeles, in 1975. Monetary economics, Swedish economic thought, macroeconomic policy and inflationary expectations are his main fields of research. He has published several books and articles in Swedish and English, including The Long Run Behavior of the Velocity of Money (1987 with M. D. Bordo), The Political Economy of Price Controls (1990) and The Stockholm School of Economics Revisited (ed. 1991). He is currently working on a study of Swedish monetary policy 1945-90. In March 1992 Lars J onung assumed a position as chief economic adviser to the Prime Minister of Sweden. Olle Persson is docent in sociology at Umel University, where he received his Ph.D. in 1980. His main research interest is the study of communication in science and technology. He is also one of the founders of the Inforsk research group. Over the last ten years he has contributed to the development of science indicators using biblio- metric techniques. Robert M. Solow is Professor of Economics at Massachusetts Institute of Technology, where he has been since receiving his BA, MA, and Ph.D. degrees from Harvard University. He has published widely on the theory of capital and economic growth, macroeco- xiv Contributors nomics, the theory of land use, and the economics of exhaustible resources. His publications include Linear Programming and Econ- omic Analysis (1958, with R. Dorfman and P.A. Samuelson), Capital Theory and Rate of Return (1963), Nature and Sources of Unemploy- ment in the United States (1964), Price Expectations and the Behavior of the Price Level ( 1970), and Growth Theory. An Exposition ( 1970). He holds honorary degrees from a number of American and other universities and received the Alfred Nobel Memorial Prize in Econ- omic Sciences for 1987. Peter Stenkula is lecturer (hogskolelektor) in Economics and Head of the Nordic Economic Research Council. His research has focused on economics of education. His publications include Byggforskningen - en oversyn och utviirdering (Building Research - An Overview and Evaluation, 1982), Tre studier over resursanviindning i hogskolan (Three Studies of Resource Use in Higher Education, 1985), and Produktions-, kostnads- och produktivitetsutvecklingen inom den offentligt finansierade utbildningssektorn 1960-1980 (The Develop- ment of Production, Costs and Productivity in the Public Educational Sector 1960-1980; 1986). Peter Stem is a research assistant and Ph.D. student in sociology at Umea University. He is a member of the lnforsk research group at that university. His research interest is in the sociology of sciences and his current work concerns the interplay between social and cognitive structures in scientific disciplines. Eskil Wadensjii received his Ph.D. from Lund University in 1972 for his dissertation on The Economic Effects of Immigration to Sweden. He was a lecturer in the Department of Economics at Lund University until 1980 when he was appointed Professor of Economics at the Swedish Institute for Social Research at Stockholm University. His research is mainly in the area of labour economics and labour market policy. His publications include Unequal Treatment. A Study in the Neo-Classical Theory of Discrimination (1989 with Mats Lundahl). Abbreviations ALC AMS BFR CERUM EFI EFA EFN FIEF FRN GU HHS HSFR IUI IHE IIES JEL Kl KSEK KVA LO LU MDS MSEK RJ SAREC Centre for Working Life Labour Market Board Swedish Council for Building Research Centre for Regional Studies at Umel University Economic Research Institute at the Stockholm School of Economics Delegation for Labour Market Policy Research Energy Research Commission Trade Union Institute for Economic Research Coordinating Board of the Swedish Research Councils Gothenburg University Stockholm School of Economics Swedish Council for Research in the Humanities and the Social Sciences Industrial Institute for Economic and Social Research Institute for Health Economics at Lund UDiversity Institute of International Economic Studies at Stockholm University J oumal of Economic Literature National Institute of Economic Research Thousand Swedish Crowns (approximately equivalent to 90 pound sterling or 180 US dollars, spring 1991) Swedish Royal Academy of Sciences Swedish Confederation of Labour Lund University Multi-dimensional Scaling Million Swedish Crowns (approximately equivalent to 90,000 pound sterling or 180,000 US dollars, spring 1991) Bank of Sweden Tercentenary Foundation Swedish Agency for Research Cooperation with xvi Abbreviations SEK SFR SJFR SOFI sou SCB SSCI SU SNS SLU UmU UHA uu Developing Countries Swedish Crowns (approximately equivalent to 0.09 pounds sterling or 0.18 US dollars, spring 1991) Swedish Council for Social Research Swedish Council for Research in Forestry and Agriculture Swedish Institute for Social Research Government Commission Reports Statistics Sweden - Sweden's central bureau of statistics Social Science Citation Index Stockholm University Centre for Business and Policy Studies Swedish Agricultural University Umea University Office of Swedish Higher Education Uppsala University Part I Introduction and background studies 1 Points of departure La.rs Engwall BACKGROUND The neoclassical theory of the firm concentrates on the price and output decisions of a single decision-maker in response to market conditions. More recent contributions, on the other hand, have introduced hierarchical aspects within the firm (cf. e.g. Alchian and Demsetz 1972, Fama and Jensen 1983). According to this second view, contracts between principals and agents govern the division of responsibility. This in tum suggests the need for the principal to control the performance of the agent. This sort of situation in fact occurs in most contexts in society today. Even a long-term activity such as research has been made increasingly subject to various evaluation procedures of this kind: In an era of increasing costs of scientific research and stronger demands for selectivity in which directions will be funded, evalu- ations serve a multiple purpose: they legitimize activities, provide a tool to select targets and help to identify problems that hinder the effectiveness of the system. Even if the evaluations do not produce sizeable impacts, they supply a useful tool that is difficult to replace. (Luukkonen-Gronow 1989a: 241) Thus the rising cost of research has been one important factor behind the boom in evaluations in all areas. Another has been the need to select and define priorities in slowly growing economies. 1 A third factor seems to be the rapid penetration of modem management principles into many organizations (Engwall 1992), which has implied a growing tendency to focus on efficiency. Research evaluation has been the subject of particular attention in the United Kingdom (cf. Irvine 1989, Hill 1989) but the Scandinavian countries have also been quite active in this field (Luukkonen- 4 Introduction and background studies Gronow, 1989b). For some years a variety of government bills in Sweden, for instance, have been stressing the importance of finding appropriate evaluation procedures. Some of the responsibility for this task has been assigned to the research councils, which distribute government research grants by way of a peer review system. 2 Of these research councils the Council for Research in the Natural Sciences (NFR) has been the most active. It began making evaluations of this kind as early as the late 1970s, and has since then covered most areas within its jurisdiction (Government Bill 1981/82:106, p. 37). It has even scrutinized its own evaluations (NFR 1981). The Council for Research in the Humanities and Social Sciences (HSFR) at first adopted rather a cautious stand on the feasibility of evaluations, motivated primarily by reference to the differences between the natural and the human sciences. But fairly early on two scholars, one Danish and one Norwegian, were asked to make an inventory of Swedish research on the subject of social organization and public administration. In their subsequent report, the then Secretary General of HSFR pointed out in a foreword that 'it is not a matter of evaluation but a comprehensive inventory[ ... ] which can serve as a basis for strict evaluation in the future' (Eliassen and Pedersen I 984: 5, our translation). However, this project was later succeeded by evalu- ations of research in the humanities and the social sciences. Thus during the late 1980s and, in collaboration with the Office of Swedish Higher Education (UHA), HSFR engaged a number of distinguished interna- tional scholars to examine the state of the disciplines of sociology and history ( cf. Allardt, Lysgaard and B0ttger S0rensen 1988 and Danielsen et al. 1988). In a new series of similar studies HSFR has selected economics, linguistics and psychology for scrutiny. One important reason for choosing economics was that the con- ditions for a study seemed particularly favourable. Blaug (1980), following Lakatos ( 1978), has stressed the existence of a hard core in this disc?line, around which a number of developments have occurred. Despite the fact that some might consider economics to be 'the imperial science' (Stigler 1984), and others might call for more variety within the discipline (cf. Caldwell 1982; McCloskey 1983, 1986 and the contributions in Klamer, McCloskey and Solow 1988), the boundaries of the discipline are still relatively distinct as well as being similar internationally. Colander (1989a: 32) thus claims that 'eco- nomics is amazingly coherent compared to the other social sciences. It has a "grand theory" accepted by a large majority of the profession, and an accepted methodology.' 4 Similarly, the Swedish economist Ragnar Bentzel says: