Dani Rodrik Quotes

In sum, economists (and those who listened to them) became overconfident in their preferred models of the moment: markets are efficient, financial innovation improves the risk-return trade-off, self-regulation works best, and government intervention is ineffective and harmful. They forgot about the other models. There was too much Fama, too little Shiller. The economics of the profession may have been fine, but evidently there was trouble with its psychology and sociology.

when a consensus forms around the universal applicability of a conclusion from a specific model, the critical assumptions of which are likely to be violated in many settings - as with perfect competition, say, or full consumer information - we have a problem.

policy discussion usually means pitting one model against another. Viewpoints and policy prescriptions that aren't backed by a model typically don't have standing.

Unlike national markets, which tend to be supported by domestic regulatory and political institutions, global markets are only 'weakly embedded'. There is no global lender of last resort, no global safety net, and of course, no global democracy. In other words, global markets suffer from weak governance, and are therefore prone to instability, inefficiency, and weak popular legitimacy.

In a famous hoax, physicist Alan Sokal submitted an article to a leading journal of cultural studies purporting to describe how quantum gravity could produce a "liberatory postmodern science." The article, which parodied the convoluted style of argument in the fashionable academic world of cultural studies, was promptly published by the editors. Sokal announced that his intention was to test the intellectual standards of the discipline by checking whether the journal would publish a piece "liberally salted with nonsense." Sokal, "A Physicist Experiments with Cultural Studies," April 15, 1996,

These results stand in sharp contrast to the hype that microfinance has attracted in development policy circles. They throw cold water on models that suggest lack of access to finance is among the most important constraints that poor households face.

An economists' consensus is perhaps more a rarity than a regularity. But when it happens, we need to pause and take stock.

If economics were only about profit maximization, it would be just another name for business administration. It is a social discipline, and society has other means of cost accounting besides market prices.

A politician who represents the interests primarily of economic elites must find other means of appealing to the masses. Such alternatives are provided by the politics of nationalism, sectarianism, and identity.

The world is better served by syncretic economists and policymakers who can hold multiple ideas in their heads than by 'one-handed' economists who promote one big idea regardless of context.

Field experiments to date have shown that microfinance - the provision of small loans, typically to women or groups of women - is not particularly effective in reducing poverty.14

We have arrived at one of the central paradoxes of economics: uniformity amid diversity. Economists work with a plethora of models, pointing in all kinds of contradictory directions. Yet when it comes to the issues of the day, their views often converge in ways that cannot be justified by the strength of the available evidence.