Academics at Work: Mark Kanazawa’s research on interdisciplinary institutions in economics

Mark Kanazawa, Wadsworth A. Williams professor of economics and chair of Carleton’s economics department, recently sat down with me for an interview about the state of economics as a discipline. The conversation provided insight into the connections between economics and other disciplines, as well as recent trends in research and new schools of thought. We also discussed his contributions to the field, his work with Carleton students in some of his research projects and how professors at Carleton, including some outside the economics department, have participated in some of the recent changes in the field.

Kanazawa’s research focus includes economic history, the historical development of resource management laws primarily in the western United States, modern resource management economics and the economics of water management in California. One of his current research projects features groundwater management districts in California and involves current Carleton students in data collection and analysis regarding the economic and social factors that influence the distribution of water between rural and urban areas. 

Kanazawa arrived at Carleton in 1985 to teach environmental economics and natural resource management, while also researching contemporary resource management issues. However, he soon shifted his focus to studying economic history and the lessons of history for the contemporary economy. An initial focal point of this new research path was the development of water rights institutions in California during the Gold Rush. He also examined the economic impact of the institutions that governed the use and management of resources more broadly, which ultimately encompassed everything from water rights to land law to railroad regulation.

When Kanazawa began comparing the history of California water rights and railroad regulations in Illinois, he found the largest difference between the two centered on which institutions led the charge for change in the region. In early California, state courts addressed most water rights issues. In Illinois, late 19th century regulations on railroads were more influenced by political considerations. California’s laws, he noticed, were more efficient than Illinois’, since Illinois had a political angle to its decisions. These findings drove Kanazawa to adopt an interdisciplinary approach in his later research, a trend he has noticed more broadly in economics.

In recent years, according to Kanazawa, economics as a discipline has tried to be more cognizant of the institutional factors that influence individual decision-making. To Kanazawa, economic decisions are heavily influenced by social, political and legal institutions. This principle has led to innovative research in many areas of economic research and to its growing interdisciplinarity. Scholars of public choice and positive political theory have provided perspectives on the effect of institutions in governing economic behavior and the economic factors that shape these institutions. Another important development is the growth of behavioral economics, a field of economics which studies the psychological factors influencing human decision-making that go beyond traditional economic models.

Some of these intersections have deep roots in existing scholarly literature. One of Kanazawa’s areas of scholarly interest focuses on the research of the late Elinor Ostrom, longtime professor of political science at Indiana University. In Kanazawa’s view, Ostrom tried to provide an approach to natural resource policy that went beyond simplistic views that we should rely either on free markets or government intervention, both of which have their limitations. Ostrom was fond of saying that there are “no panaceas” when referring to these limitations. Instead, when dealing with many areas of natural resource management, Ostrom prescribed a diagnostic approach in which researchers actively engage with local communities to better manage their natural resources. This engagement allows researchers to assess a number of local factors that promote successful resource management, such as the strength of community bonds, local investment in the long-term health of the resource and the possibility of face-to-face communication among local stakeholders. All of these factors and others can have an enormous impact on the success of local resource management efforts. The Ostrom approach is also reflected in the interests and approach of some faculty in the Carleton political science department, according to Kanazawa, who were associated with the Ostrom “Workshop,” a graduate program at Indiana University.

Some of Kanazawa’s current research involves these new intersections in economic analysis. With the assistance of Carleton students, he is currently studying California’s groundwater management districts and what factors influence their decisions. He posits that these local arrangements for managing groundwater may actually inhibit wider state-wide rationalization of water supplies. This research, done with support of both the economics department and the environmental studies program, weaves together economic theory and other non-economic disciplines, reflecting some of the recent trends in economic research.

How can students explore these intersections and avenues of economic research more deeply? Kanazawa suggests that good, rigorous training in economic theory and empirical analysis are essential for a successful, satisfying career in economic research. Most economic research involves intensive, computer-based data analysis, and the economics department provides excellent training for students interested in such a career path. However, in the new increasingly interdisciplinary approach taken in many areas of environmental study, other approaches are possible that may involve field work, surveys, interviews and experiments. If students wish to study natural resources and the environment, Kanazawa recommends that they identify the aspect of the research process they most enjoy—this ranges from technical econometric analysis of large data sets to interacting with people in experimental settings. The economics research tent is big and wide, and there is room for many interests and approaches.

This story is part of a series of interviews with Carleton faculty about their research and engagements with the Carleton community. The Academics at Work series allows Carleton professors to talk about the changes they have observed and help lead in their own academic communities, as well as provide further insight into the work they do at Carleton.

Daniel Myer ’24 is a former student of Professor Kanazawa.