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In memory of:

Alberto Alesina

ISSNAF Founding Member, remembered by Francesco Giavazzi e Guido Tabellini.

Alberto Alesina was one of the foundational pillars of political economics over many decades, and one of the most creative economists of his time. In this column, two friends of Alberto pay tribute to a man who was driven by a relentless curiosity and was a mentor and source of inspiration for innumerable students and colleagues.

(GT) Alberto was one of the most creative economists of his time. He had two characteristics that made his work so important and influential. First, he asked fundamental questions which nobody had asked before. Second, he had a powerful intuition, which enabled him to single out the key aspects of a problem. His explanations often seemed so simple and obvious that you often wondered why nobody had thought that way before. And yet, they were new and surprising, and opened up new thoughts and ideas.

Alberto was trained as a macroeconomist, and his PhD thesis opened the field of political economics. That was the heyday of rational expectations and applied game theory. Alberto was the first to apply the insights of these powerful new tools to explain policy choices by rational and strategic politicians.

The themes he explored in the first phase of his research reflected his Italian background. He grew up in Italy in the 1970s. This was a period of stark ideological and political conflicts, with extreme polarisation leading to frequent strikes, left-wing terrorism and capital flight. It was obvious that these conflicts had a large impact on the economy, and yet they were neglected by frontier economic research in the 1980s. Politics was at the heart of the School of Public Choice, but the focus of this line of research was on agency problems, or lobbying by special interests. And macroeconomics was devoted to general equilibrium analysis of representative agent models, where politics did not matter. The main contribution of Alberto’s early work was to show that political conflict has a central role in explaining several macroeconomic phenomena.

In his early work, he took seriously the idea that politicians are also motivated by partisan ideologies, not only by opportunistic motives. This seems obvious now, but until then politicians were seen as exclusively guided by the desire to win votes, and policy convergence at the election was taken as the norm. He then went on to study how election outcomes affect business fluctuations, and how political polarisation and harmful policy divergence are moderated by voters in elections, or by cooperation between politicians alternating in office.

He then took some of the insights of his earlier papers to dynamic economies. He showed that political conflict and polarisation are central to explaining the accumulation of government debt and the procrastination of painful policy choices. He also explored how redistributive conflict influences economic growth. In a number of pioneering contributions, he then explored the implications of political and economic conflict for the choices of secession and integration by sovereign nations.

This first phase of economic research was mostly, though not exclusively, theoretical. It was also firmly grounded in the assumption that voters and policymakers are rational. But while the assumption of rationality is appropriate for studying the behaviour of professional politicians, it is much less convincing when used to explain how people vote. Alberto was amongst the first economists to acknowledge this limitation, and to adapt insights from sociology to explain voters’ behaviour. In several pioneering contributions, he showed how slow-moving cultural traits influence economic, political and administrative behaviour in a number of domains, including courts of justice; how conflict resolution is easier amongst co-ethnics or people who trust each other; and what consequences this has for public good provision and preferences for redistribution.

This more recent line of research is primarily empirical. The microeconometric revolution changed how evidence is brought to bear to economic analysis and imposed new standards for causal inference. Alberto was again amongst the first to realise what was happening. Directly with the example of his work, and indirectly through his leadership of the NBER programme, he had a huge impact in changing how frontier research is done in political economics. What was once a field of applied theory is now primarily an empirical field of research.

This transformative impact on the field of political economics continued until his last days. The collection and analysis of original survey data is now an important step to understanding voters’ behaviour, and Alberto’s most recent and ongoing contributions in this area provide key new insights on how voters cast their votes.

Besides being a founder and pioneer of political economics, Alberto always retained a keen interest in public policy. His latest (prize-winning) book shows that the consequences of contractionary fiscal policies differ depending on how they are carried out. He was an influential contributor to policy debates, through his academic work and through a regular column in the Italian newspaper il Corriere della Sera.

Last but certainly not least, he was a fundamental mentor and source of inspiration for innumerable graduate students and colleagues, who are now first-rate economists throughout the world. This was not by chance: it reflected his warm and engaging personality, and his genuine and intense caring for the world around him. We will all miss him enormously.

(FG) Indomitable was Alberto's passion for the mountains: the Alaskan glaciers, as well as the hard, grey rock of his Mont Blanc, which he contrasted with sharp irony with the "hills" of the Dolomites.

Indomitable was his passion for research, which led him to always open new routes, and to get off the beaten track. “If we want economics to survive as a discipline," he used to say, "we need the courage to extend its frontiers to the sphere of history and sociology”.

He was stubbornly obsessed with the glass walls against which women's working lives clash. The last chapter of L'Italia fatta in casa (Mondadori 2009), written a few years ago with Andrea Ichino, compares an evening in the home of two families – one in Italy, the other in the US; a few pages that are worth many treatises on gender equality.

He stubbornly sought the origin of these phenomena. "Fertility and the Plow" (QJE 2013), an article written with Paola Giuliano and Nathan Nunn, seeks to test the hypothesis that different attitudes towards the role of women in society reflect differences in agricultural techniques used a few thousand years ago. In societies where land cultivation used the hoe, women were actively involved in market activities. On the other hand, where intensive cultivation techniques were used requiring a plough, agricultural work needed a lot of strength and was therefore reserved for men. In these societies, men tend to specialise in agriculture and women in domestic production – a difference that has survived centuries and centuries later.

With extraordinary vitality, he wondered about multi-ethnic societies and their destiny. "Immigration is going to make Europe explode" he wrote in a chapter in The Future of Europe (MIT Press 2006), at least a decade before the arrival of boats from North Africa.

Indomitable were his curiosity and intuition. A curiosity for the dynamics of our society and for its history. A curiosity about the life of the people close to him, his students, his colleagues, his friends, whether talking economics, physics or cognitive sciences. The curiosity of intelligent people, who never stop listening and learning. This was the quality that made him a teacher and a mentor for so many students who suddenly stopped on Sunday, astonished, in silence. Students many of whom over the years have become collaborators and colleagues because Alberto, though solitary and taciturn, was an insatiable collaborator in his work.

Infinite was his humanity. Alberto was a rare person in whom brilliance meets with pitiless self-irony. Only towards stupidity and banality was he impatient, often dismissive. Like all intelligent people, he was always ready to admit his mistakes. How many times I would call him after a grumpy, very succinct email in response to a statement of mine that he had considered silly. I would explain why I thought he was wrong. The roughness of the email would give way to his intelligence: if you were able to come up with a good argument, the conversation would end with “You're right”. It's been an uninterrupted dialogue for 30 years.

A version of this joint article appeared on vox-eu on May 26, 2020

 
 

JURISPRUDENCE

AVAILABLE CONTENT

Interview with:

Guido Calabresi

Senior United States Circuit Judge of the United States Court of Appeals for the Second Circuit

Sterling Professor Emeritus and Professorial Lecturer in Law, Jale Law School

Recipient of the ISSNAF 2020 Life Time Achievement Award

Host

Alberto di Mauro

Guido Calabresi (born 1932) is the son of the late cardiologist Massimo Calabresi and European literature scholar Bianca Maria Finzi-Contini. Calabresi's parents, active in the resistance against Italian Fascism,  eventually fled Milan for New Haven, Connecticut,  emigrating to the United States in 1939.

In 1994 Calabresi was appointed United States Circuit Judge and entered into duty. Prior to his appointment, he was Dean and Sterling Professor at Yale Law School, where he began teaching in 1959, and is now Sterling Professor Emeritus and Professorial Lecturer in Law. Judge Calabresi received his B.S. degree, summa cum laude, from Yale College in 1953, a B.A. degree with First Class Honors from Magdalen College, Oxford University in 1955, an LL.B. degree, magna cum laude, in 1958 from Yale Law School, and an M.A. in Politics, Philosophy and Economics from Oxford University in 1959. A Rhodes Scholar and member of Phi Beta Kappa and Order of the Coif, Judge Calabresi served as the Note Editor of The Yale Law Journal, 1957-58, while graduating first in his law school class. Following graduation, Judge Calabresi clerked for Justice Hugo Black of the United States Supreme Court.

Calabresi has been awarded more than fifty honorary degrees from universities in the United States and abroad,  among them many in Italy.  He holds degrees honoris causa from, among others, Pavia University, Torino University, Padova University, Bologna University, Milan University, Brescia University and Rome University. He is a member of numerous learned societies, among them, the Royal Swedish Academy of Sciences, the Academia dei Lincei, the Royal British Academy and the American Philosophical Society. He is the author of seven books and more than one hundred articles on law and related subjects.

Calabresi is, along with Ronald Coase,  a founder of law and economics.  His pioneering contributions to the field include the application of economic reasoning to tort law and a legal interpretation of the Coase Theorem.  Under Calabresi's intellectual and administrative leadership, Yale Law School became a leading center for legal scholarship imbued with economics and other social sciences.

Host: "Professor Calabresi, first of all, allow me to congratulate you on the well-deserved recognition of ISSNAF for your splendid career through the assignment of the Life Time Achievement Award. 

What are your personal feelings in receiving this recognition from ISSNAF, a Foundation that since its inception in its mission has set itself the goal of creating a bridge between Italy and North America in the field of scientific research?"


Guest: "I am really happy to receive the Life Time Achievement Award from ISSNAF, above all because in a certain sense I believe I am playing a role as a bridge between Italy and America. Although I and my family moved to the United States in 1939, where I did all my studies, we have always continued to speak Italian among us. Since the end of the war I have returned to Italy regularly, and I now have an apartment in Florence. To those who ask me which nationality I feel most attached to, I always answer that I am both Italian and American. To a student who wanted to know for which country I rooted in the last football world championship, I replied that of course it was for Italy, but not because the Italian players played better, actually on that occasion they were pretty bad, but because football is the national sport of Italy. If there were a world championship in baseball, in that sport I'd be cheering for America. Returning to the award that ISSNAF is giving me, I am delighted because it is a significant recognition of what I have tried to do to help many young people who have come here from Italy and also what I have tried to do when I was in Italy."


Host: "About this last point, what are the aspects of your work connected to Italy over the years and how has your thinking influenced the disciplines concerned in Italy?"


Guest: "In Italy, law was traditionally very formal and, not open to relationships with other disciplines such as economics. In my contacts with scholars and personalities such as Stefano Rodota, Guido Rossi, Guido Alpa, Roberto Pardolesi, Enzo Varano and many others, I brought a slightly different way of thinking. It is a more complex idea of law that has been accepted and is currently taught in many Italian universities.  Because of me and my Italian connections many universities in Italy have sent students to Yale to study fields of law that were sometimes not mine. I used to deal with torts (civil liability), but some of these students were working in fields like administrative law or Contracts.  I therefore redirected these young people to professors in those disciplines and these professors thereafter in turn went to Italy, thus creating a virtuous process of exchanges between the two countries. I would also like to add the ways that Italy has influenced my thinking and, in part through me, American law in general. In the United States, economics has often been used to criticize how law is made, the same for philosophy. Looking at it from the Italian point of view, however, one realizes that there is an equal relationship between the two disciplines. When a philosophical or economic theory conflicts with the law, it does not necessarily mean that the law is wrong and should be changed.  It may be that the theory is defective and needs to be questioned. So, we can speak in a certain way of a revenge (“rivincita”) of the law. This European and, as far as I'm concerned, Italian point of view has definitely contributed to a broader scholarly approach to law in America. Moreover, my duties as a high court judge, which I still am, allow me to introduce elements of Italian jurisprudence into American law.  An example concerns when a law that was valid when enacted, because of changed conditions begins to move towards constitutional invalidity. In that case the legislator must be urged to rethink the law to make it more consistent with the constitution. This can be done without immediately striking down the law. This sensitivity did not exist in American law. In the United States there is a tendency to say that a law is valid or not, black, or white. In Italy the legislator instead can be pushed to make the law consistent with the constitution.  This way of harmonizing laws by creating a dialogue between the legislator and the constitutional courts is something I learned from Italian law and that I have introduced in America."


Host: "Ever since you were young you have been a staunch supporter and promoter of the dialogue between law and economics. In a rapidly changing context, new urgent needs emerge, such as that of saving the balance of the planet in which we live. This obviously requires a change in the regulatory framework. What impact can have with market laws?"


Guest: "First, we must be clear that we can no longer speak of the economy as if it were only market based. There are simply too many situations in which even the basic concepts of economics can work, only if there are government actions that make incentive systems economically effective.  More dramatically, the current Covid-19 pandemic has posed the problem of what can be done through incentives. We are faced with situations in which decisions have to be made that will surely not satisfy. There is a need for choices that are going to be tragic, as noted by Philip Bobbitt, and me in our book Tragic Choices. Let me give you an example. If, as we all hope, we are going to have a vaccine in the near future, it will surely not be available to the entire population immediately. Then a choice is required as to who will receive it. It will be a tragic choice, for any decision that will be made, in fact, will not be entirely right. It may be said that it must be given to the people who need it most. But who decides who to these are? Are they the doctors at the service of society or are they the top politicians who consider themselves important? Alternatively, everything could be left to fate through a lottery.  But this egalitarian solution will surely be criticized as not corresponding to the most pressing needs. Many people pontificating that they have found the right method of allocating vaccines are instead simply deciding the one that suits them most. Decisions will have to be made in the coming months and it will be interesting to see the differences in the methods chosen in Italy and Europe on one side and the United States on the other. If we go back to the past a similar thing to this happened in the United States when the need arose to choose the soldiers to send in limited wars, or, we could say, who was chosen to be sent to die. Well, in the history of the United States, the selection criteria have been different each time. The same will happen for the vaccine. Each country will regulate itself differently because in fact there is absolutely no right way. In Italy people tend to say that everything should be done based on absolute equality, but then in practice this method is disregarded. Here is an example from fifty years ago. When employing an artificial kidney, the rule in Italy was that the first patient who needed a kidney received it.  So, I was told by an Italian doctor to whom I had asked the question. But when I asked him, how he would have behaved if a cousin of his wife had presented himself as a patient in need of a kidney, he said that he would have acted like a human being, putting his affections in the forefront. He admitted that this too was a form of corruption, but at least in his opinion, the ideal (of absolute equality) would not be corrupted. In America, instead, the applicable rule:  choosing people according to criteria relating to their importance or special needs, represented, to him, a sort of structural corruption, a corrupt ideal. In fact, however, in both cases the choice cannot be right, and in that sense is always corrupt!"


Host: "At the end I would like to ask you a question relating to the so-called Italian phenomenon of the "brain drain", that greatly characterizes the relations between Italy and the United States. In your opinion, does it still make sense to speak only in negative terms of the many young Italians who have successfully built splendid careers outside their country? Is there a positive way to seize the opportunities offered by this phenomenon?"


Guest: "There was a time when many people were forced to leave Italy for lack of work to seek their fortune in other countries. The phenomenon occurred in the past, but in other forms it also occurs today. It is true that this constitutes a loss. But if Italy were able to get at least a part of these people back after they have worked abroad, it would be a wonderful thing. The loss would become an asset! Among other things, these Italians prove to have great abilities; they are very good and successful at their work abroad. At the same time, they feel themselves to be Italians even after a long time spent outside Italy.  Being able to bring them back to Italy would be good for both countries, setting in motion a bilateral process of exchanges and collaborations that would allow the finest ideas to be united. Obviously, Italy must create ways of making their return attractive, and offer them the recognitions they deserve for their service abroad. It is necessary to establish formal relationships giving such people the possibility of continuing to do top level work in Italy. Sometimes even informal relationships would be enough, as happened with me, for example, through invitations and offers of collaborations. In any case, it is important to think of these people as a real capital to invest in, treasuring their past experiences."

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