“It became obvious to me very quickly that economics of convention is a particularly fruitful theoretical approach for analyzing the health sector”

Interview with Philippe Batifoulier, director of the laboratory CEPN at Paris 13 and co-editor of the “Dictionnaire des conventions”.

Anna Gonon (FHNW Olten, Switzerland) & Valeska Cappel (University of Lucerne, Switzerland)

Cappel/Gonon: You are the director of the Laboratoire CEPN in the University Paris 13. What are the focus areas of this Laboratory and how would you describe your position and activities there?

Batifoulier: Since November 2015, I have headed the Paris Nord Center for Economics [CEPN, UMR CNRS 7234], a bi-disciplinary economics and management laboratory. This research laboratory has 160 members, including 70 professors and associate professors and 80 PhD students. As director, I represent the laboratory in all management and administration acts and manage the scientific policy.

Philippe Batifoulier

The CEPN is a reference laboratory of the study of capitalisms and the institutions that regulate them or are at the origin of crisis. The dynamics of capitalisms are analyzed through the structural analysis of contemporary economies as well as the diversity of management modes of organizations and corporate governance. One of the most important characteristics of the CEPN is its pluralism. The CEPN relies on large array of theoretical approaches: post-Keynesian, regulationist, Marxist, economics of convention, critical management studies etc. CEPN researchers use different methods that range from the tools of political economy and socio-economics to quantitative economics (micro and macro econometrics). One of the essential consequences of this pluralism – of both: paradigms and methods – is the valorization of transdisciplinary approaches. The original research conducted by the CEPN uses history, psychology, law or sociology to broaden the scope of the analysis. Because of its unusual positioning, the CEPN is a focal point of pluralism. The CEPN helps to keep heterodox approaches alive and encourages scientific controversy. Without the CEPN, the diversity of economic thought would be weakened. For this reason, CEPN appears as a privileged contact for French and international projects with a strong heterodox dimension. Due to this attractive positioning, the CEPN aims at responding to social demands on many subjects. It constitutes a civic-conscious research structure with an outstanding capacity to foster public debate.

Cappel/Gonon: You have mentioned economics of convention as one of the theoretical approaches at CEPN. Could you tell us a little bit about your academic background and how you started to work with economics of convention?

Batifoulier: I hold a master in econometrics and a postgraduate degree in Mathematical Economics and Applied Economics at the University of Paris 10 – Nanterre. In 1987, I began a thesis on statistical theory using Shannon’s information theory and log-linear modelling to exploit a large health database in order to analyze the reforms in the health sector. I was dissatisfied with the lack of theoretical underpinnings of my work and in search of an adequate economic paradigm. With Olivier Favereau’s arrival in Nanterre, I turned to the economics of convention. I met this new approach with the publication of the special issue of the “Revue économique” in March 1989. I defended my thesis under the direction of Olivier Favereau in 1991 and was recruited as associate professor at the University of Saint Quentin en Yvelines and then at the University of Paris 10 – Nanterre.

The specificity of my work is to propose an institutionalist approach applied to health economics. It became obvious to me very quickly that economics of convention is a particularly fruitful theoretical approach for analyzing the health sector. I think mainstream economics cannot deal with the health sector because the standard assumptions about rationality and market coordination are very disconnected from what a patient or a doctor really is. The health sector is an ideal topic for heterodox economics. Healthcare and social policy are strongly normative issues and economic analysis cannot ignore it. Because economic health policies are precisely one of those domains in which coordination, value judgments and normative considerations cannot be separated, the concept of convention is well indicated to understand the specificities of the health sector. To be convinced of this, we only need to note that one of the main objectives of the economics of convention is to endogenize values within coordination and to take the ethical resources of individuals seriously. Now, the health sector is precisely one of those domains in which values and the concept of ethics (medical, in this case) are omnipresent. The conceptual work on the concept of convention has provided matter for reflection in a domain that has often been criticized for being too applied and insufficiently grounded on theoretical foundations. In return, the conventionalist approach provides a pragmatic application to the theoretical analysis of a sector that is important in terms of both the resources engaged (notably financial) and the social and political stakes involved.

Cappel/Gonon: Could you tell us a little bit more about the specific EC concepts that were fruitful in your analysis of the health sector and maybe also describe an example of application?

Batifoulier: I use EC in two different ways. To deal with coordination, I mobilize the notion of interpretative rationality. To speak about regulation and to criticize the neoliberal policies, I rely on the notion of a common world instead of extrinsic incentives.

First, I tried to capture the coordinating capacity of medical ethics. The coordination between a doctor and a patient or between physicians depends on values in order to comprehend the interaction. This interpretation relies on a collective representation of references as EC shows, in other words a way of judging the situation and of judging oneself and the other party in that situation. So, for example, when a patient consults a physician, he knows that the doctor’s behavior is governed by deontological rules. To be applied, these rules must have a “hic et nunc” interpretation, considering both the collective formed by the patient and doctor and a wider collective consisting of the whole healthcare system; the whole allowing to evaluate the quality of the service provided (the length of the consultation or the level of fees, in particular). This understanding is not only cognitive but also evaluative, with the form of evaluation determining the importance of what the agent considers. Therefore, this interpretation won`t be the same on every occasion or in every place. That’s why we have to consider the plurality of possible representations and the impossibility of reducing medical ethics to a universal and invariable conception of ethical behavior. Ethics is neither immutable nor mechanical; it is very context sensitive.

Secondly, I mobilized EC to review the neoliberal economic policy in healthcare which considers that institutions are understood to be only incentives. I expanded this analysis on health insurance. By considering that health insurance is a problem because it leads to unnecessary consumption owing to the fact that it is by and large free, its existence is not under discussion, only its harmfulness. The consequences of this economic policy are immediate: we must reduce a person’s health cover and resort to healthcare that is more expensive. Making the patient pay is a fashioned strategy that is founded on mainstream theory in which the patient has no depth. He or she does not make judgments, only calculates. This completely self-interested individual does not fit in with a network of social relationships capable of directing his or her behavior, putting the brakes on his or her opportunism. This mainstream economic theory is a political and social creation without society. Consequently, it is the vision of social welfare and healthcare that is misrepresented. In this economics-orientated point of view, national insurance must be concerned with the calculation of individual risk, discarding the aim of a shared world.

Cappel/Gonon: You use EC to criticize neoliberal healthcare policy. How do you think could an EC-inspired healthcare policy look like?

Batifoulier: EC can inform healthcare policy on at least 3 points:

First, EC invites to consider the plurality of professional values and get out of the dichotomy in which mainstream wants to lock and close the debate: the physician’s behavior cannot be generalized to the figure of the homo œconomicus. Professional commitment and the well-being of their patients are more a physician objective than self-interest is. Professional values govern the behavior of the doctor in diagnosing and treating the patient. We have to look at the plurality of professional values: liberal values as Hippocratic values. The values debate is one of EC’s messages. Liberal values have been historically controlled by the welfare state. Today, they are valued by neoliberalism (for example, many practitioners charge fees in excess), which leads to many inequalities of access to healthcare.

Second, in the neoliberal world, the hospital is now a laboratory of competition and has become very “inhospitable”, for the patient as for the employees. With EC, one can question the quality of care in the hospital: not to reduce it to an unambiguous definition and without prior deliberation. The standardization of care and the setting the medical work in protocol puts forward an “industrial” quality and deteriorated a “domestic” quality (by increasing the distance to healthcare) and a “civic” quality (by sacrificing the culture of public utilities). It is thus incorrect to say that the Hospital reform has improved the quality of care. It has developed some qualities, but has deteriorated others.

Thirdly, an aspect where EC can be mobilized is democracy in health. The question of the legitimacy of health decision-making is deeply related to the patient’s place in it. But he often seems to be ruled out of decisions. In terms of funding, the expenses that are very well reimbursed (or well supported) are not necessarily those that are medically justified. We should also draw the lessons of the development of private insurance, very unequal and inefficient, and recognize that we better control the expenditure by solidarity than by the market. There are many examples where the balance of power is not favorable to the patient. EC highlights people’s reflexivity and the type of collectivity to which we belong. This calls for the insurrection of the patient who has to reinvest in the different spaces of democracy to assert the right to participate in decisions that concern him or her in the first place and build the institutions that meet the most basic needs.

Cappel/Gonon: You are co-editor of the “Dictionnaire des conventions: autour des travaux d’Olivier Favereau“ published in 2016 (Presses Universitaires du Septentrion). In this “non-standard” dictionary, as you call it, scholars from different fields take Olivier Favereau’s work as their point of departure to explain EC concepts. Could you tell us a little bit more why this is a “non-standard” dictionary?

Batifoulier: The ”Dictionnaire des conventions” coordinated by Franck Bessis, Guillemette de Larquier, Ariane Ghirardello, Delphine Remillon and myself is a book in honor of Olivier Favereau. The form “dictionary” has imposed itself on us because a lot of scholars from different disciplines (75 authors from the younger generation to the older ones) wished to participate in this tribute. This is a “non-standard dictionary” because the book does not claim to explain all the concepts of EC but proposes a review of many contemporary debates in the social sciences starting from a conventionalist reading, that is, a non-standard point of view. The entries share a common spirit, highly critical of the mainstream economics.

Cappel/Gonon: How do you see the future of EC as an approach? Where will or should it be applied? What are its strengths, are there any weaknesses?

Batifoulier: Beyond the quality of the authors, this dictionary is, in some way, illustrative of the way of functioning of EC, which relies much on working collectives. The existence of collective works, which evolves with the different generations, is typical of the EC. Communities of work in the field of EC settle down with young scholars on topics as diverse as ecology, health, enterprise and the labor market, law and lawyers, social and solidarity economy, etc. The latest works focuses more on economic issues without neglecting the socioeconomic foundation of EC to not abandon the economics to the mainstream. The context in which EC evolves is also crucial in this trajectory. In France as elsewhere, a partial concept of economics, the neo-classical or mainstream approach, has become the established orthodoxy and monopolizes the legitimacy of economic analysis. The rejection of pluralism leads to the gradual disappearance of non-standard schools of thought. Resistance is brought by the Association française d’économie politique (AFEP), a professional association with the aim of defending and illustrating pluralism in economics since 2009. Because all AFEP members shared the same analysis and concerns, the elimination of pluralism has led the various heterodox approaches to seek more what brings them together than what oppose them. So, EC will be interested in topics that were initially introduced by other approaches (regulation theory, Marxist approach). Capitalism and its evolution is now an important issue of EC studies. In the same time, the traditional themes of EC (values, rationality, representations) are now resources for others. This climate is very stimulating for future research.

Cappel/Gonon: At last, what would you recommend for young scholars who are interested to work with EC?

Batifoulier: I think the current period is particularly challenging to commit to this research program. EC is carried by new generations (second and third generations) that do not only relay the initial project but also pilot it in different directions. The progression of the program, from generation to generation is strength. A young scholar easily finds his place. The economics of convention is supported by several major research laboratories, in France as elsewhere giving more opportunities. In short, go for it.

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