A statistical analysis of the adoption of privatization and central bank independence by national governments indicates that the presence of American-trained Ph.D. economists have a significant influence on the decision to implement these policies. However, the timing of the adoption suggests that adoption is sensitive to the technical debate within economic communities and the degree of consensus regarding the efficacy of these programs. These results are triangulated with a study on pension fund reform to show that other actors, e.g. the World Bank, may matter and prevail even though economists may disagree. The discovery of an economic idea and the introduction of an economic policy parallels the distinction between invention and innovation in the technology literature. Economic ideas become policy innovations upon their adoption as policy programs, but often as much for their ideological content as for their technical merits. Contrary to many opinions on economists and their influence, the results of this paper suggest that economics, like most epistemic academic communities, is marked by debate that can reverse the earlier consensus, with effects of this debate echoed in the adoption decisions by political actors.
40, (December 01, 2011):