FIFTY YEARS OF THE ESRC FEATURE


Stern’s 2006 review of the economics of climate change. IFS has also adapted to new political realities such as devolution, with extra ESRC resources to research topics such as the economics of Scottish independence. He hopes in the near future to address issues arising from inequality (such as taxing higher earners, or reducing the incidence of low pay) and the chronic issue of low UK productivity.


Building successful businesses The ESRC has long appreciated the need for research into business to accompany its work on economics, and from 1994 to 2004 funded the Centre for Business Research, now part of the Cambridge Judge Business School. Its current director, Professor Simon Deakin, is a lawyer by background, with a strong interest in the rule of law in business transactions, and in places in the world where it is replaced by corruption and bribery. As he says, “The UK has a great advantage through being one of the nations whose economy does not have to bear the huge cost of corruption. But it is very hard to create the rule of law where it does not exist, and we are interested in how this might happen in emerging markets. People need to see the value of honest legal and commercial systems, rather than accepting the dangerous view put forward about some BRICS nations that the rule of law is an unnecessary cost.”


Professor Deakin says that over time, business research has emerged as a genuine discipline with its own data, methods and journals. The


Green issues is an area in which the UK is influential, notably with Lord Stern’s 2006 review of the economics of climate change.


precipitous growth of business as a university degree subject, especially the MBA, has helped to drive its development. New areas of interest include gender in business, which Deakin regards as “a key issue in public discourse”. He adds that because of the influence of US approaches and US journals, the methods of business research have become globalised. This applies even in the global South, where business issues form part of the ESRC Rising Powers programme. Rachel Griffith, professor of economics at the University of Manchester and Co-Director of the ESRC Centre for the Microeconomic Analysis of Public Policy, agrees that we know a lot more than we did 50 years ago about key concerns such as the ways in which businesses respond to tax systems and to regulation. She praises the ESRC’s role in backing this research. Griffith points out that while ‘regulation’ can be


a boo-word for politicians, most people are in favour of regulating food safety, or indeed the banking system. What people oppose is heavy 1970s-style regulation, for example of prices. Griffith says that we now know much more about the way to regulate in a more subtle and market-driven way. She adds that an important current challenge


is to learn more about how “less tangible” firms work as economic actors. Companies in fields such as software and e-business, she says, do not respond in the same ways as a traditional manufacturer with a large immobile factory. “A key question for the UK is how you tax and regulate these businesses,” she says. “The UK is an open


SUMMER 2015 SOCIETY NOW 11


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