Economic performances directly influence and shape public policy agenda

This is of course only one example of economics not merely describing or explaining, but also actively shaping the economies—this is how performativity is most commonly understood. The recent emphasis on economics in the performativity debate is not surprising: many studies document how a very—perhaps, the most—inl uential social science participates in building up social reality. The performative move thus refers to the venerable epistemological question of the relation between ‘reality’ and ‘theory,’ but goes beyond the traditional idea of economics describing more or less adequately some supposedly ‘real’ processes. This performative turn took place at the beginning of the new millennium and culminated in books such as An Engine, Not a Camera (MacKenzie 2006) and Do Economists Make Markets? (MacKenzie et al. 2007). Afterwards, the performativity research proliferated. However, these new studies were not a replication of the essential work on performativity: We could clearly observe the drift toward a new understanding of the concept. In this new—‘after-the-turn’—research, the focus has been shifted from the investigation of the one-way link ‘theory → reality.’ The search for a general proof that this link exists—in more or less strong form—was recognized by many as futile. Today, the performativity concept moved from the theoretical debate about the link between abstract theories and economic reality toward empirical studies of how this link works in various applied i elds. There was a drift toward investigations of performative practices . This shift had consequences. On the one hand, the proliferation of empirical studies diluted the term ‘performativity’ often reducing it just to a ubiquitous catch-all concept. One might deplore the limited theoretical advancement in the i eld. On the other hand, what we can state with certainty is that, in the last years, performativity became a part of the DNA in the social studies of economic phenomena. The performativity program delivered a framework for the discussion of what economic professionals do and, more generally, of what happens in economics. 2 I. BOLDYREV AND E. SVETLOVA In fact, it is now well established that economic theories of various kinds dei ne standards of rationality and categories of risk, determine the rules undergirding investment decisions, inl uence macroeconomic expectations, and formulate microeconomic incentives. The performativity perspective also pertains to the phenomena of marketization, indoctrination, diffusion of theoretical knowledge via expertise, creation of new languages and ideologies. Economists formulate the norms for reconi guring markets ( Garcia-Parpet 2007; Holm and Nielsen 2007) and set criteria of efi ciency (Breslau 2011, 2013); manage identities and produce subjectivities—be it through business education (Ghoshal and Moran 1996; Ghoshal 2005 ) or consumer testing (Muniesa 2014); they also specify policy agendas and generally play a crucial role in institutional design both by directly intervening and by providing a relevant ‘cognitive infrastructure’ (Ferraro et al. 2005 ; Friedman 2010; Hirschman and Popp Berman 2014). Choosing a pension plan in the US pension system with the mechanism of choice devised by experimental economists (Thaler and Sunstein 2008); taking part in the auctions following the rules formulated by the teams of game theorists and economic experimentalists (Guala 2001; Nik-Khah 2008 ; Boldyrev 2012, 2013); investing in index funds as embodiments of efi cient market hypothesis in i nancial economics (MacKenzie 2006); establishing incentive systems inspired by microeconomic theory (Dix 2014; HerrmannPillath, this volume); confronting people with questions they never thought of before and thus constructing their preferences (Kahneman and Tversky 2000; Muniesa 2014); using a micro-credit scheme in Bangladesh or India on the terms proposed by experimental development economists (Banerjee and Dul o 2011; Favereau and Brisset 2013; Davis 2013)—all these actions suggest the ways economics helps in creating its own realities and attempts to make the agents, material infrastructures, and knowledge converge and mutually stabilize each other. Small wonder that in the postcrisis neoliberal era, the role of economists in facilitating (or neglecting) major economic instabilities sparks controversies (Krugman 2009 ; Hodgson 2009 ; Caballero 2010; Mirowski and Nik-Khah 2013). The interest of performativity lies precisely in its radical stance: in blurring or at least questioning the boundaries between research and its object, in focusing on knowledge and its pragmatic realizations, we both challenge traditional epistemology and address the very texture of social life. That is why clarifying the meaning of performativity eventually matters for AFTER THE TURN: HOW THE PERFORMATIVITY OF ECONOMICS MATTERS 3 understanding the social. The studies on various ‘performative practices’ imply that the link between ‘theories’ and ‘economic reality’ cannot be understood in terms of a mechanical, one-way inl uence. It could be empirically demonstrated that clear distinction of this kind is often not possible. ‘Realities,’ while being theoretically assembled, also shape theories (via statistical data or observations).