In the early 1990s, Paul Krugman, the New York Times columnist and Princeton economist, made great hay out of his blistering attacks on a set of the political cognoscenti that was willing to use academic jargon and poor-quality research to justify preconceived economic policies. Krugman dubbed them “policy entrepreneurs.” From the supply siders of the Reagan administration to the strategic traders of the Clinton presidency, Krugman’s targets extended across the ideological spectrum. Marked by a propensity for intellectual gimmickry and a Rasputin-like ability to persuade politicians, Krugman blamed these characters for disastrous public policy initiatives.

Mira Levitan

While Krugman authored his most scathing attacks in his 1994 book “Peddling Prosperity,” the late 1990s saw policy entrepreneurialism taken to new excesses. Technology was going to remake the world and permanently alter everything from tax structures to the way wars are thought. The Dow Jones Industrial Average would reach 36,000 and change economic behavior in the process. The Internet would lead to the withering of the state. Unfettered trade and capitalist expansion would make warfare obsolete. Picking up on these prophecies, the champions of globalization ascended to a status of preeminence in Washington’s think tanks and wonkish journals. Politicians and policy makers used these visions of perpetual prosperity to garner popular support for massive spending initiatives that have helped lead to state budget crises across the nation. Even the University got into the act, hitching its star to the promise of biotech.

The Life Sciences Institute is a product of the heady days at the end of the millennium. Buoyed by the strongest economic performance in decades, flush with a massive tobacco settlement and ready to solve once and for all the incorrigible problems that plagued the state since the end of World War II, the state of Michigan made a billion-dollar commitment to the life sciences. The Life Sciences Corridor is a multi-institutional endeavor stretching from Grand Rapids to Detroit with the $100-million Life Sciences Institute as its centerpiece. Besides curing cancer and doubling human life expectancy the corridor would also fundamentally restructure the Michigan economy for the 21st century. Between luring high-tech jobs to the state and ending the state’s dependence on the automobile industry, Michigan had a bright future ahead of itself. Former University President Lee Bollinger was one of the corridor’s biggest cheerleaders. Through hobnobbing with elected officials and academics Bollinger made the corridor possible and displayed his skills as a policy entrepreneur of the first order.

The logic of this type of research initiative appears self evident. Pour money into some cutting-edge research and watch your region expand into a stalwart of an innovative industry. Plus, all you have to do is look around the country and you’ll see examples of locally-concentrated industries. There have been some examples of governments consciously spurring on regional development, but by and large, these regional concentrations of industry have emerged as the result of happenstance. Moreover, it is simply impossible to predict what fields or innovations will bear fruit. The life sciences may have been designated the savior of Michigan, but with such limited information it is impossible to know if the field will pan out.

In the case of the Life Sciences Corridor, the obstacle to a governmentally-inspired success are particularly relevant. Biotech was the “it” field of the late 1990s and other regions also attempted to capitalize on the promise of the technology. There is a Central Indiana Life Sciences Initiative, a Long Island Sciences Initiative, Life Sciences in Missouri, a Cornell Life Sciences Initiative, Life Sciences Research Initiative at the University of Albany, a California Life Sciences Initiative and a Life Sciences Initiative at the University of Kansas. Whew, that was exhausting. Needless to say, other states have devoted their resources to biotech as well and the competition for top-flight faculty and federal research dollars will be fierce. Add the University’s relatively late start in the industry and the outlook for the entire project appears relatively poor. But that’s what happens when you let the policy entrepreneurs run the show.

Peskowitz can be reached at zpeskowi@umich.edu.






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