Andrei Shleifer

He was born to a Jewish family[7] in the Soviet Union and emigrated to Rochester, New York, as a teenager in 1976, where he attended an inner-city school and learned English from episodes of Charlie's Angels.[8] He then studied mathematics, obtaining his B.A. from Harvard University in 1982.[9] Following this, he went to graduate school in economics, acquiring his Ph.D. from MIT in 1986. As a freshman at Harvard, Shleifer took Math 55 with Brad DeLong; he has said that the course made him realize he was not destined to be a mathematician, but the experience gave him a future co-author.[8] Shleifer also met his mentor and professor, Lawrence Summers, during his undergraduate education at Harvard. The two went on to be co-authors, joint grant recipients, and faculty colleagues.[5]

He has held a tenured position in the Department of Economics at Harvard University since 1991 and was, from 2001 through 2006, the Whipple V. N. Jones Professor of Economics.[10] Previously, he taught at the Graduate School of Business at the University of Chicago and briefly at Princeton University.

Shleifer's earliest work was in financial economics, where he has contributed to the field of behavioral finance. He has also written influential papers on political economy, the economics of transition, and economic development, collaborating with his former colleagues in Chicago, Kevin M. Murphy and Robert W. Vishny. Their paper "Industrialization and the Big Push" was credited by Paul Krugman as a major breakthrough which ended a "long slump in development theory".[11]

With coauthors Rafael La Porta, Simeon Djankov and Florencio Lopez de Silanes, Shleifer has also made significant contributions to the study of corporate governance.

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.

The Clark medal citation described him as a "superb economist, working in the old Chicago tradition of building simple models, emphasizing basic economic mechanisms, and carefully looking at the evidence.... A recurring theme of his research is the respective role of markets, institutions, and governments."[12]

In 1994 Shleifer founded 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 has sold his ownership stake.[13]

During the early 1990s, Andrei Shleifer headed a Harvard project under the auspices of the Harvard Institute for International Development (HIID) that invested U.S. government funds in the development of Russia's economy. Schleifer was also a direct advisor to Anatoly Chubais, then vice-premier of Russia, who managed the Rosimushchestvo (Committee for the Management of State Property) portfolio and was a primary engineer of Russian privatization. Shleifer was also tasked with establishing a stock market for Russia that would be a world-class capital market.[14] In 1996 complaints about the Harvard project led Congress to launch a General Accounting Office investigation, which stated that the Harvard Institute for International Development (HIID) was given "substantial control of the U.S. assistance program.”[15]

In 1997, the U.S. Agency for International Development (USAID) canceled most of its funding for the Harvard project after investigations showed that top HIID officials Andrei Shleifer and Jonathan Hay had used their positions and insider information to profit from investments in the Russian securities markets. Among other things, the Institute for a Law Based Economy (ILBE) was allegedly used to assist Shleifer's wife, Nancy Zimmerman, who operated a hedge fund which speculated in Russian bonds.[14]

In August 2005, Harvard University, Shleifer and the Department of Justice 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 worth of damages, though he did not admit any wrongdoing.[10][16]

• Boycko, Maxim; ——; Vishny, Robert (1995). Privatizing Russia. Cambridge, MA: MIT Press. ISBN 978-0-262-02389-4.
• —— (2000). Inefficient Markets: An Introduction to Behavioral Finance. Oxford, UK: Oxford University Press. ISBN 978-0-19-829227-2.

• Faculty page at Harvard University
• Who's Scheifer
• Citation rankings
• Institutional Investor: How Harvard Lost Russia
• Book review in Finance and Development (An IMF publication) of "Without a Map: Political Tactics and Economic Reform in Russia" by Andrei Shleifer and Daniel Treisman