Ahead of the game

Prof. Jim Brander scouts out global trade’s future paths


Intelligence, creativity and a drive to succeed can propel a stellar
academic career like Jim Brander’s. But a little bit of luck doesn’t hurt
either, he insists.

The professor of Commerce and Business Administration is recognized as one of
the most influential economic theorists in the world in the fields of
international trade and trade policy.

As an economics PhD student at Stanford in the late 1970s, fortune seemed to
smile on Brander as he searched for a thesis subject in international trade.

At the time, international trade models were dominated by two big assumptions.
The first was that markets were highly competitive. The second was that there
was no particular advantage to large-scale production.

But in the real world, it was obvious that many industries, such as automobile
manufacturing, were dominated by a handful of companies that had monopoly-like
powers. Imperfect competition, it was called. Just as obvious was the fact that
for many businesses the economies of scale did work, and large-scale
production was an important advantage.

Brander decided to create more accurate models of what was really going on in
the world. He only hoped there was enough there to get him through his
thesis.

There was, and then some. The paper he published as a result was widely cited
and influential among academics and policy makers alike. Within a few years,
imperfect competition was the subject of more than half of all papers written
in the field of international trade. In total, Brander has been cited more than
1,000 times by other scholars.

Brander’s provocative findings, hailed as “a wake-up call to the profession” by
Princeton University professor Avisnash Dixit, offered a fundamental insight
into the causes of international trade. And it has given rise to the new field
of strategic trade theory.

“I was lucky enough to be one of two or three pioneers in an area just before
it blossomed,” says Brander, whose rolled-up sleeves and intense energy suggest
someone whose hard work creates its own luck.

“You want to be just slightly ahead of everybody else,” he says, then adds,
“People who are too far ahead die miserable.”

Being ahead of the game has its rewards. Among the many awards
Brander has received for his work is UBC’s top research prize, the Jacob Biely,
in 1997. He has also received the UBC Killam Prize and a pair of Faculty of
Commerce and Business Administration research prizes.

Brander credits the power of curiosity for much of his research success.

“I get interested in something either because it’s important, or just because
it interests me, and a compulsion develops. I become obsessive and put in long
hours, and it takes on a life of its own. I think to be a successful academic,
you have to be obsessive — you can’t just work in a normal, reasonable way.”

Brander doesn’t have to leave his work behind at the office. His wife is
Barbara Spencer, a professor in the same faculty. The two share similar
interests and have undertaken collaborative research projects since they met
while teaching at Queen’s University.

“Being able to talk about our work, and doing joint work, has been good for our
careers. We also understand when the other needs to work hard on something.”

Brander and Spencer together have done groundbreaking work on targeted
subsidies.

Subsidies used to be hated by economists but embraced by governments. Brander
and Spencer’s research proved subsidies are better used for basic research and
development, where discoveries are more likely to benefit a wide group.

This new knowledge has contributed to a level of agreement among
countries on the issue of subsidies that was “unthinkable” 25 years ago,
Brander says.

Both the General Agreement on Tariffs and Trade and the North American Free
Trade Agreement contain provisions to eliminate or reduce targeted subsidies
while encouraging research and development.

“The research and development process is what separates us from our ancestors
who painted on caves. That process, which has given us almost everything
material that we value, depends on the efficient performance of modern
economies. Knowledge is always changing and we should do all we can to
encourage its development.”

For Brander, that message extends into the classroom, where he tries to
encourage active curiosity. The intensity in his voice rises a notch when he
mentions teaching.

“Many young students think knowledge is something static. My job is to make
them realize that acquiring knowledge is a research process which involves
constantly asking questions and not passively absorbing information.
Encouraging intellectual curiosity may be the most important thing a teacher
does.”

Brander’s own compulsive curiosity has lately drawn him to problems of
environmental and resource management.

“We’re living in an increasingly crowded world, and in the near future we’ll
see more serious conflicts over resources like water, forests and fish,” he
predicts.

Economists often overlook environmental constraints, he says, and
environmentalists often overlook patterns of trade and consumption in the real
economy. There’s a need, he says, for people who can combine the two
disciplines.

Brander’s work on resource modelling reveals cases where rising output masks
serious depletion. On the East Coast, for example, the cod catch increased for
a long time, causing damage much worse than the initial decline in stocks
suggested. Drastic action wasn’t taken in time, and the stocks collapsed.

“For a researcher like me, the question is, can we capture the interaction
between the resource base and economic activity in a way that is useful for
policy planning? If we can’t,” Brander says, “the cod may be an example of
what’s to come with other resources in the next century.”

With these words of warning, Brander hints at a new area of economic theory in
the making. Is he ahead of the curve yet again? Few who have followed his
career would be surprised.