Comments on: What is a ‘conflict of interest’?

By: Andrew Leigh » Blog Archive » Netiquette

Andrew Leigh » Blog Archive » Netiquette — Wed, 12 Sep 2007 09:49:10 +0000

[...] after I posted on conflicts of interest, Andrew Norton politely disagreed in comments, and then wrote on his blog ”this week I questioned Andrew Leigh’s suggestion that Westpac CEO Gail Kelly [...]

By: Andrew Leigh

Andrew Leigh — Tue, 28 Aug 2007 06:59:20 +0000

Tony, your point is a neat one - but given the way most academic economists view media work, I should point out that any media I do probably drives down my promotion probabilities, and hence is strongly against my financial interest….

By: Tony Healy

Tony Healy — Mon, 27 Aug 2007 03:50:33 +0000

Actually Andrew Leigh has his own conflict of interest here. As an academic who seems to seek media attention, it’s in his interest to highlight shortcomings in commentators from rival environments. I am not saying that was Andrew’s motivation, but there’s clearly a possibility that it was.

As Andrew Norton points out, there can be many forms of benefit other than direct financial gain.

Secondly, I think Andrew misunderstands the workings of the media. It’s not actually impartiality that journalists seek for comment on an economics trend, but authority. That is, they want someone readers will accept as knowing what they’re talking about.

The issue of implicit bias in a bank executive can be factored out by readers, and is. In the case of predicting interest rate rises, there’s also an implicit honesty check, in that commentators will be assessed on the accuracy of their forecast.

Also, I suspect the journalist didn’t explicitly seek out Kelly. He or she probably contacted the bank’s PR department expecting to get one of the bank’s economists. Instead, the PR department took the opportunity to give their new boss some exposure.

By: Louise Hitchcock

Louise Hitchcock — Sat, 25 Aug 2007 02:49:13 +0000

I suspect you’re not Carlton’s lone classical liberal if you include Carlton North, since my husband and I both define our views by that label.

Cheers, Louise

By: jc

jc — Fri, 24 Aug 2007 14:49:17 +0000

Ellen

Do you and Andrew Leigh then expect us to recruit our politicians and CEO’s from the Carmelite nuns and various abbeys that swear blind faith to poverty?

People do recuse themselves and there are blind trust arrangements for senior pols.

By: Ellen

Ellen — Fri, 24 Aug 2007 08:03:10 +0000

I had not realised that Kohler had an interest in a newsletter until someone complained about it.

A potentially significant conflict of interest, especially in light of recent fuss over house prices, is the potential conflict of interest when politicians own investment properties while deciding tax dedictibility of interest, zoning, development approvals, land releases, stamp duties and other related matters. It’s funny how no one mentions those even though share holdings can have a politician dis-endorsed.

By: JC

JC — Fri, 24 Aug 2007 06:08:32 +0000

Andrew L

How on earth would you CBA the CEO of westpac selling her firms wears? Is using common sense a reasonable substitute?

By: Andrew Leigh

Andrew Leigh — Fri, 24 Aug 2007 02:02:01 +0000

Nice post. I agree that we should do some form of cost/benefit analysis on this. If good commentary is limited, you might want to have more of it from conflicted sources, especially if you think the extent of the conflict is small (eg. Stephen Kirchner argued on my blog that the elasticity of new loans with respect to the interest rate is negative, but very small). This would suggest that quoting from conflicted sources is more reasonable in a small country like Australia than a large country like the US.

However, it’s not clear to me that there’s any shortage of impartial commentary on the ‘what are rates going to do?’ question.

By: Rajat Sood

Rajat Sood — Thu, 23 Aug 2007 07:08:54 +0000

Andrew, I agree. Maybe this is somthing to run past our mutual friend at Media Watch..?

By: JC

JC — Thu, 23 Aug 2007 05:46:37 +0000

“I thought that a distorted sense of interest explained how James Farrell (and Media Watch, which triggered his post) had the Kohler story wrong. Kohler’s primary interest is his reputation as a good financial journalist. ”

Media Watch had a go at him simply because he would be as close to a decent and interesting journalist they have. He obviously doesn’t fit their culture. They hate business.

It’s just a case of the political left trying to turn molehills in mountains. They would politicise toilet activities if they could. Hang on. They have.