SoeTech Paper Picks

Our motivation: Mitchell provides an important think piece about how the metaphors we use to describe new technologies, in this case artificial intelligence (AI), shape the way we think about them. Sometimes the metaphors we use may even have unintended effects that may blur our understanding of both the technology and its societal impact.Abstract:The disagreements in the AI world on how to think about LLMs are starkly revealed in this diverse array of metaphors. Given our limited understanding of the impressive feats and unpredictable errors of these systems, it has been argued that “metaphors are all we have for the moment to circle that black box.”Reference: Mitchell, M. (2024). The metaphors of artificial intelligence. Science, 386(6723), eadt6140. Click here to read.

Our motivation:Structural change is shaped by management and the recruitment of managers. This paper shows that internal promotions risk turning skilled employees into suboptimal managers and makes the argument that external recruitment of CEOs might make for better overall results.Abstract We study whether the quality of managers can affect public service provision in the context of public health. Using novel data from public hospitals in Chile, we show how the introduction of a competitive recruitment system and better pay for public hospital CEOs reduced hospital mortality by 8 percent. The effect is not explained by a change in patient composition. We find that the policy changed the pool of CEOs by displacing doctors with no management training in favor of CEOs who had studied management. Productivity improvements were driven by hospitals that recruited higher quality CEOs.Reference: Muñoz, Pablo, och Cristóbal Otero.2025. ”Managers and Public Hospital Performance”.AmericanEconomic Review 115(11):4040–74.

Our motivation: Countries that are economically open towards the world tent to have high taxes and large welfare states. The standard explanation for this link, the so called compensation hypothesis, suggests that welfare states compensate for volatility caused by economic openness. In this note, Bergh challenges this explanation and describes how research on the link between economic openness and government size has changed over time. Abstract: This note describes how research on the link between economic openness and government size has changed over time. Early interpretations suggested that countries develop welfare states to compensate for volatility caused by economic openness (the compensation hypothesis). Recent findings have cast doubts on this interpretation. For example, more open economies are on average not more volatile, and economic openness does not unambiguously increase the social security demands from voters. Some recent studies suggest that economic openness is particularly beneficial for countries with high taxes and high-income equality. A re-interpretation of the compensation hypothesis is thus possible: Through trade, the citizens in large welfare states enjoy some of the benefits associated with cheap labour and high wage dispersion despite their domestic economy being characterized by high real wages, high taxes and a compressed wage distribution.Reference:Bergh, Andreas. 2021. ”The Compensation Hypothesis Revisited and Reversed”. Scandinavian Political Studies 44(2): 140–47.

Our motivation: This paper explores how quasi-markets compare to and differ from traditional markets in the case of the Swedish school voucher system, for example with relation to competition, innovation and structural change. In doing so, it contributes to moving discussions about privatization beyond the market or state dichotomy and highlights the need to address the particular issues of quasi-market design.Abstract: Quasi-markets are increasingly used in public service provision, yet they remain highly contested. This paper develops a conceptual framework grounded in economic theory to examine how quasi-markets differ from traditional markets along five key dimensions: (1) revenues, costs, and profits, (2) the matching of supply and demand, (3) competition, (4) structural change, and (5) rent-seeking. Assuming profit-maximizing behavior, we stress test the quasi-market model to explore how these structural differences shape incentives and influence outcomes. Applying the framework to Sweden’s school voucher system, we show that specific design features have led to unintended consequences that undermine service quality and conflict with the reform’s stated policy goals.Reference:Bergh, Andreas, and Joakim Wernberg. 2025. ”Stress Testing a Quasi-Market: Unintended Consequences of the Swedish School Voucher System”. Scandinavian Journal of Public Administration.

Our motivation: Varian (who is also Chief Economist at Google) addresses central criticisms against "big tech" and puts these issues into a wider scope of economic analysis. The paper adds to a more nuanced discussion about the role of large tech companies in the economy.Abstract: There is currently a great deal of interest in online competition, particularly involving large tech firms such as Google, Apple, Facebook, Amazon, and Microsoft (a group commonly known as “GAFAM”). In this essay I examine several issues involving these firms that have often come up both in the popular press and academic discussions. The goal of this paper is to examine the facts about the alleged seven deadly sins of tech: competition, innovation, acquisitions, entry, switching costs, entry barriers, and size. I argue that when you look at the facts, it is clear that competition among tech firms is working well, and this has yielded many positive outcomes for consumers and the economy as a whole.Reference: Varian, H. R. (2021). Seven deadly sins of tech?. Information Economics and Policy, 54, 100893.

Our motivation: Economic growth, globalization, technological shifts and structural change are often met with worries about economic inequality in the public debate. Starmans and her co-authors add valuable nuance and substance to these debates by contrasting inequality with unfairness and showing how the two are not necessarily the same.Abstract: There is immense concern about economic inequality, both among the scholarly community and in the general public, and many insist that equality is an important social goal. However, when people are asked about the ideal distribution of wealth in their country, they actually prefer unequal societies. We suggest that these two phenomena can be reconciled by noticing that, despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality. Both psychological research and decisions by policymakers would benefit from more clearly distinguishing inequality from unfairness.Reference:Christina Starmans, Mark Sheskin, och Paul Bloom. 2017. ”Why people prefer unequal societies”. Nature 1(April): 1–7