Long Term Scholarship

Research can be short-term in outlook or long-term. It is said that Einstein took ten years to figure out relativity, a time in which he eschewed many other avenues of investigation so as not to be distracted. Donald Knuth spent ten years working on his typesetting system LaTeX. My colleague, Hersh Shefrin, now spends almost all his mindshare on his current book. Clearly this pays great dividends, for the quality of such work is inexorably high.

What if these outstanding individuals had been asked by their respective organizations to justify their positions on an annual basis? No doubt, their stature would have prevented such questions being posed, but it is not unusual in academia today for annual reviews to be the marking points for awkward questions about productivity being asked of even high quality individuals, who should not have to justify their research styles and preferences any longer. Top academics are thinkers, not salesmen. They should not have to meet annual goals or targets.

Yet, so many departments I know of only ask how many A publications an academic produced in the past academic year. Not one of these departments ever takes the trouble to even read the work of its faculty. And so, it is nothing but an accounting, bringing a bean counter mentality to the review, debasing the very process of intellectual endeavor.

No doubt the very top departments are less likely to fall prey to asking – “Well, last year you won the Nobel Prize, but what have you done this year?” – this is not as far from reality as one might imagine. Most departments are not free from the curse of the annual review, and succumb eventually to the yardstick of the A journal or the bean count.

There are many articles even in A journals that have no impact whatsoever. Short-termism is the reason for this. Since most faculty need to make their “quota” of A publications, it fosters the repeated generation of good but not great quality articles we often see. Without the annual pressure to meet a bean count of articles, less average quality articles would be seen in top journals, and surely even fewer low quality articles would be submitted. I referee a lot of articles, and the general quality of submissions seems to be dropping year by year. Might short-termism be the cause of this malaise?

Whereas the constant procession of decent but not great top journal articles is consistent with the current incentive systems of finance departments, it is not clear whether this is optimal. Here is the basic trade-off. Requiring annual judgments on research productivity prevents the laggards from getting away with laziness, but the costs appear in the quality of research. Further, it prevents faculty from taking the time to invest – either in long-gestation ideas or in themselves. In my humble opinion, great intellectual developments did not come from treadmill environments. We can see the results today – no one reads papers to evaluate faculty, mostly we just count papers.

Really good thinkers get frustrated by all this. They eventually leave for Wall Street. if they are not going to get the time to think deeply, it makes sense for them to at least make money without thinking. This leaves the feeble mediocre behind to run the show. Hence, the death spiral for research.

Short-termism in academia also shows up in business school rankings, where Deans are pressed to make sure ratings and rankings rise on an annual basis. So they then need faculty to do their share to prop up the school’s PR efforts. The distortion of incentives shifting effort from research to PR is having a devastating effect on finance departments everywhere.

So what are faculty to do? I feel lucky to be in an institution where there are many paths to research success. Not just a small set of restricted journals with annual goals. Even though we have an annual review, its an occasion for feedback, not a salary meeting.

We need to treat the annual review with a bowl of salt. Be a skeptic. Count ideas, not papers. Assess research agendas, not high/low journals. Count impact, not teaching ratings (I do not open teaching rating packets). Be a thinker, not a publisher.

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