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Economists study how markets, consumers and businesses behave, but they rarely turn the focus inward to study their own behaviour. We did. And our research reveals that economists at Canadian universities are collectively losing interest in the country's economy and its economic policy issues.

The accompanying graph shows a continual drop in the share of academic publications from Canadian economics departments that contain Canadian content – down from nearly half of all publications decades ago, to only 10 per cent for today's youngest researchers. (See the full results here, based on Emery and Simpson's analysis of 3,000 articles by 250 Canadian economics professors.) This trend has been under way for several decades and is particularly pronounced among the country's best and brightest: Those in the top 10 economics departments now do far less work on Canadian issues than they did decades ago.

We think this decline matters. If the academic part of the Canadian economics profession continues down its current path, it risks becoming irrelevant to Canadian taxpayers, policy-makers and students.

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What's behind these troubling trends? One likely explanation is changing recruitment practices at our universities. In the 1990s, immigration laws that had previously given preferential treatment to Canadian academics were relaxed to allow departments to better compete for international talent. Not surprisingly, the increasing prevalence of academics who work in Canada but studied elsewhere means the pool of academics studying and teaching Canadian issues is diminishing.

Another part of the story is incentives for promotion, pay and prestige. Higher expectations to publish may dissuade scholars from studying Canadian issues because it is harder to publish this work in the best journals outside of Canada – which is where scholarly reputations are made. This tendency is reinforced by changes in how the government funds academic research in Canada, with an increased concentration of resources in top-tier universities.

Finally, Canadian studies may be a victim of an excessive emphasis on abstract economic theory and the mathematization of the profession (a phenomenon sometimes called "physics envy"). While such research is more attractive to international journals, it's often less useful to non-specialists and policy-makers seeking to understand our economy and how best to guide it.

Some people might argue that the de-Canadianization of university economics departments doesn't matter. The work is still going on elsewhere: in public policy schools, business schools, health programs, and even think tanks (which were not in our study), all of whom are picking up the slack.

Others might even say this a welcome development. After all, Canadian economics departments are receiving high global rankings, which benefit our universities, helping them attract high-quality faculty and students.

But we see several reasons for concern. First is the question of whether Canadian taxpayers are getting reasonable social value for their money. Canadians fund a significant share of the work in academic departments. They would likely prefer academic economists to focus on concrete policy problems facing those who pay their salaries.

The second worry is that policy-makers seeking objective, rigorous evidence to help them make decisions are less likely to turn to Canadian academic economists. This irrelevance to the domestic debate should be cause for soul-searching within the profession.

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Finally, we worry about the effect on students who seek knowledge of their economy and the challenges it faces. These developments mean they will have less exposure to their own economic institutions and history. And by depressing the number of graduates versed in these areas, we also risk weakening the capacity of future researchers, policy-makers and informed citizens to engage with Canadian economic issues.

While there are no quick fixes, we propose three steps to restore some Canadian focus for the profession.

First, government research funds should be spread more equitably to reach those working on Canadian issues. The way that governments fund research has an enormous influence on who studies what, and even modest government interventions can shift the direction of research. A good example is the Metropolis project, funded by the Social Sciences and Humanities Research Council, which encouraged applied, empirical research on immigration. This attracted significant interest from Canadian academic economists within and outside of the top departments (and even publications in top journals). More should be done along these lines for other Canadian economic and social topics.

Second, academics need more and better data. It's hard to stimulate applied research when data are poor or access is limited. Statistics Canada is trying to move in this direction. But recent funding cuts, the loss of important surveys and dismantling the long-form census are likely to exacerbate the problem. More public resources are needed to fund data collection and improve access.

Finally, we need a psychological change within the profession. Canadian academic economists must ask themselves how they can best support their key stakeholders. The current incentive structure serves some faculty very well, but it is not as healthy for taxpayers, students and policy-makers. It's time to look inward and admit we have a problem.

Herb Emery is an economics professor at the University of Calgary. Wayne Simpson is an economics professor at the University of Manitoba. Stephen Tapp is a research director at the Institute for Research on Public Policy. An extended version of this article appears in IRPP's Policy Options Magazine, September, 2013 issue, available at http://www.irpp.org/en/po/.

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