Andrei Shleifer

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Andrei Shleifer

Born February 20, 1961 (1961-02-20) (age 47)
Moscow, USSR
Residence US
Nationality Russian
American
Fields Economist
Institutions Harvard University 1991-
Advisor to the Gov. of Russia 1991-97
University of Chicago 1987-90
Princeton University 1986-87
Alma mater MIT, PhD 1986
Harvard University, BA 1982
Doctoral advisor Peter A. Diamond (thesis advisor)
Lawrence Summers (mentor)
Known for Financial economics
Behavioral Finance
Notable awards John Bates Clark Medal 1999

Andrei Shleifer (born February 20, 1961) is a prominent academic economist.

Contents

[edit] Life

He was born in Russia to a Jewish family and emigrated to Rochester, NY as a teenager. He then studied economics, obtaining his A.B. from Harvard University in 1982 and Ph.D. from MIT in 1986. He has held a post in the Department of Economics at Harvard University since 1991 and was, from 2001 through 2006, the Whipple V. N. Jones Professor of Economics[1].

In 1999, Shleifer was awarded the John Bates Clark Medal, awarded every two years to the most promising US economist under 40, for his seminal works on corporate finance (corporate governance, law and finance), the economics of financial markets (deviations from efficient markets), and the economics of transition. He is among the 10 best economists in the world according to IDEAS/RePEc and is listed top 1 in the category "Most-Cited Scientists in Economics & Business" [1]

[edit] Work

Andrei Shleifer is one of the most cited economists in the world, with more than four thousand citations. (Citation rate is one measure of a scientist's impact on thought and practice in a particular field of endeavor.) His work focuses mostly on financial economics, where he has contributed to the field of behavioral finance.

In recent years, his research has focused on the legal origins theory (also sometimes known as law and finance theory), which claims that the legal tradition a country adheres to (such as common law or various types of civil law) is an important determining factor for a country's development, most of all financial development.

Shleifer and his coauthors (Rafael La Porta, Robert W. Vishny, Simeon Djankov and Florencio Lopez de Silanes) have written extensively on corporate governance.

In 1994 Shleifer had with fellow academics — and behavioral finance specialists — Josef Lakonishok and Robert Vishny a Chicago-based money management firm known as LSV Asset Management. As of February 2006 it managed about $50 billion in quantitative value equity portfolios, though, according to the firm's website, Shleifer no longer had an ownership stake.[2]

[edit] Activities in Russia

During the early 1990s, Andrei Shleifer was an advisor to Anatoly Chubais, the then vice-premier of Russia, and was one of the engineers of the Russian privatization. During that time, Harvard University was under a contract with the United States Agency for International Development, which paid Harvard and its employees to advise the Russian government. The results of privatization in Russia were criticized widely in Russia and western academic circles. Under Anatoly Chubais, privatization led to valuable Russian business assets being acquired at extremely cheap prices amid accusations of rigged auctions.

Shleifer was also tasked with establishing a stock market for Russia that would be a world-class capital market. That effort was also unsuccessful, and became mired in charges of corruption and self-dealing.[3]

[edit] Controversy

Under the False Claims Act, the US government sued Harvard, Shleifer, Shleifer's wife, Shleifer's assistant Jonathan Hay, and Hay's girlfriend (now his wife) Elizabeth Hebert, because these individuals bought Russian stocks and GKOs while they were working on the country's privatization, which potentially contravened Harvard's contract with USAID. In 2001, a federal judge dismissed all charges against Zimmerman and Hebert.[4] In June 2004, a federal judge ruled that Harvard had violated the contract but was not liable for treble damages, but that Shleifer and Hay might be held liable for treble damages (up to $105 million) if found guilty by a jury [2].

In June 2005, Harvard and Shleifer announced that they had reached a tentative settlement with the US government. On August 3 of the same year, Harvard University, Shleifer and the Justice department reached an agreement under which the university paid $26.5 million to settle the five-year-old lawsuit. Shleifer was also responsible for paying $2 million dollars worth of damages, though he did not admit any wrong doing. A firm owned by his wife previously had paid $1.5 million in an out of court settlement.

Because Harvard University paid most of the damages and allowed Shleifer to retain his faculty position, the settlement provoked allegations of favoritism on the part of Harvard's outgoing president Lawrence Summers, who is Shleifer's close friend and mentor. Shleifer's conduct was reviewed by Harvard's internal ethics committee. In October 2006, at the close of that review, Shleifer released a statement making it clear that he remains on Harvard's faculty. However, according to the Boston Globe, he has been stripped of his honorary title of Whipple V. N. Jones Professor of Economics[3].

Shleifer's involvement in Russia was investigated by David McClintick, a Harvard alumnus and journalist for Institutional Investor Magazine. His 30-page January 2006 article claims to show that "economics professor Andrei Shleifer, in the mid-1990s, led a Harvard advisory program in Russia that collapsed in disgrace." The article drew considerable criticism among Shleifer's colleagues, collaborators, close friends, and students. According to the Harvard Crimson[4], the university's daily newspaper, Shleifer's colleague and economics professor Edward Glaeser said that the Institutional Investor article "is a potent piece of hate creation—not quite 'The Protocols of the Elders of Zion,' but it's in that camp." But Glaeser later apologized for his statement[5].

[edit] Important works

  • Privatizing Russia with Maxim Boycko and Robert Vishny (Jan 22, 1997) [5]
  • Botero, J., Djankov, S., La Porta, R., López de Silanes, F., and Shleifer, A. (2004) The Regulation of Labor, Quarterly Journal of Economics, 119: 1339-1382.
  • Djankov, S., La Porta, R., López de Silanes, F., and Shleifer, A. (2002) The Regulation of Entry, Quarterly Journal of Economics, 117: 1-37.
  • Djankov, S., La Porta, R., López de Silanes, F., and Shleifer, A. (2003) Courts, Quarterly Journal of Economics, 118: 453-517.
  • Essential Science Indicators (2004). Most-Cited Scientists in Economics & Business Thompson-ISI. Retrieved 2005-10-21.
  • La Porta, R., López de Silanes, F., Shleifer, A. and Vishny, R.W. (1998) Law and Finance, Journal of Political Economy, 106: 1113-1155
  • La Porta, R., López de Silanes, F., and Shleifer, A. (1999) Corporate Ownership Around the World, Journal of Finance, 54 (2): 471-517.
  • La Porta, R., López de Silanes, F., Shleifer, A. and Vishny, R.W. (2000) Investor Protection and Corporate Governance. Journal of Financial Economics 58: 3-27.
  • Shleifer, A. and Vishny, R.W. (1997) A Survey of Corporate Governance, Journal of Finance, 52 (2): 737-783
  • Mulligan, C. and Shleifer, A. (2005) Conscription as Regulation, American Law and Economics Review, 7 (1): 85-111.

[edit] See also

[edit] References

  1. ^ "Most-Cited Scientists in Economics & Business" ISI Web of Knowledge
  2. ^ The Harvard Crimson :: News :: Harvard To Pay $26.5 Million in HIID Settlement
  3. ^ Harvard professor loses honorary title in ethics violation - The Boston Globe
  4. ^ The Harvard Crimson :: News :: Corp. Enters Shleifer Fray
  5. ^ The Harvard Crimson :: News :: Tensions Linger at Closed FAS Meeting

[edit] External links


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