Contributions to Economics

Sir James was awarded the Nobel Prize in Economic Sciences in 1996 with Professor William Vickrey of Columbia University, for their research on the economic theory of incentives when information is incomplete or asymmetric.

In their article in the Scandinavian Journal of Economics (1997) in honour of the Nobel Prize, Avinash Dixit and Tim Besley outline Sir James’ ‘revolutionary’ contribution to economics:

“The theory of information and incentives has revolutionized economics…Mirrlees has made pathbreaking contributions — arguably the two most important contributions — to the development of these ideas and methods of analysis. His Review of Economic Studies article [1971] on optimal nonlinear income taxation introduced a technique that evolved into the ‘‘revelation principle’’, which fully characterizes all policies that are ‘‘incentive compatible’’, or feasible under information asymmetry…His Bell Journal of Economics article [1976] on hierarchies and organizations played a similar role for the theory of the design of incentives to induce effort. He identified the precise way in which observable outcomes convey probabilistic information about the underlying unobservable action, and thereby clarified how rewards or punishments based on outcomes can serve as incentives to action.”[1]

Working with the Institute of Fiscal Studies at UCL, Sir James chaired the Mirrlees Review, which brought together a group of international experts to identify the characteristics of a good tax system for developed countries, to assess to what extent the UK tax system met those characteristics, and to recommend reforms to that end. The Mirrlees Review is a landmark in applied public economics and an internationally recognized blue print for comprehensive tax reform. The launch of the first volume of the Review in 2011 was instrumental for the UK Treasury Select Committee’s decision to launch an inquiry into the principles of tax policy. The research in the Review underpins the Universal Credit reform introduced as part of the Welfare Reform Act of 2012, and had a direct impact on its design.

Tributes

Professor Sanjeev Goyal, Chair of the Faculty of Economics said:

"James Mirrlees is well known as the author of some of the most luminous and influential papers in modern economics. For this work, he was awarded the Nobel Prize for Economics in 1996. But over and above his great intellectual achievements, Jim was widely respected and held in great affection for his generosity in mentoring young economists from all over the world. He will remain the model that every young economist should aspire toward."

Professor Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics whose doctoral thesis was supervised by Sir James said:

"James Mirrlees’ moral seriousness, allied to dazzling mathematical skills and an unerring eye for building minimalist economic models were reflected in some half-dozen articles that together constructed the theoretical foundations of public economics.

"To those of us who were privileged to observe his academic life at close quarters, it was also a source of amazement that he found it entirely right and proper to spend more time on his many students than on his own writings. He was unquestionably one of the most influential economists of the final quarter of the last century."

Professor Hamish Low, Professor of Economics, said:

“Jim’s influence over economists from across the discipline is unparalleled. This influence stems from a huge commitment to listening and discussing research with students, junior researchers and colleagues, a willingness to share ideas and a generosity with his time that has benefited all of us. This was alongside his own truly path-breaking research that changed the way we think about incentives and inequality. He is a striking role model for how academics can make a real difference.”

Professor David Newbery, Emeritus Professor of Economics, recalls his time studying with Sir James as an undergraduate at Cambridge in the 1960’s and transformation of economics teaching that Sir James instigated –

“I would sit in Jim’s lectures, awed by his ability to formulate complex problems, and then demonstrate the elegance of the solutions available, grounded in the mathematics I had learned but directed to really interesting applications. It was Jim that convinced me that my previous studies in mathematics could be put to practical use, and it was Jim who awakened an interest in development economics – I listened as he gave a talk to a War on Want lunch in Trinity where we heard of his work in India and I subsequently went to work in Tanzania.

“Jim joined the Faculty in 1963, shortly after Frank Hahn, who came in 1960. Together they introduced rigorous (but relevant) mathematical economics to undergraduate Faculty teaching, notably in the then separate special papers on advanced theory and mathematical economics. Jim’s lectures were pretty tough – separating hyperplanes, properties of convexity, the non-substitution theorem and the like – and the exam questions were more open-ended than today, perhaps posing a question that required the examinee to dream up and apply a model – less formal but more challenging. When Frank invited Peter Diamond as the youngest Overseas Fellow to Churchill, it was unsurprising that soon Jim and Peter were working on their theories of efficient production and optimal commodity taxation that hugely clarified the whole field of social cost-benefit analysis and transformed public economics.”

Professor Christopher Harris, Professor of Economics, said:

“I first met Jim in the fall of 1981, when I began my graduate studies at Nuffield College, Oxford. He had agreed to take me on as one of his supervisees. Supervisions with Jim consisted of weekly problem sets. Each set contained open-ended questions designed to develop the model-building skills of the supervisees. Thinking about these questions was tremendously rewarding, and I still remember discussing several of them with fellow students.

“Later on, as I began work on my thesis, Jim encouraged me to read and think about a series of recent papers. This process culminated in two ideas about dynamic games. At the time I took it for granted that Jim would understand what I was working on but, with hindsight, I find it quite staggering that a single individual could move effortlessly between "Project appraisal and planning for developing countries" at one extreme and theoretical work in a field in which he was not even a specialist at the other.

“And in all this I was by no means alone. Over his career Jim supervised countless PhD students, working on an exceptionally diverse range of topics, and followed their subsequent careers. He also took an active interest in the research of his younger colleagues, and was a constant source of encouragement to them.

“He will be sadly missed."

Dr Jeremy Edwards said:

“I met Jim in 1974 when I went to Nuffield College, Oxford as a graduate student. All Nuffield students were extremely fortunate to have very close contact with the Fellows, and so, although I was not an economic theorist, I got to know Jim fairly well. Jim was simultaneously kind and terrifying: kind, because he had a lot of time and encouragement for students whatever their interests; terrifying, because, despite his kindness, his mind moved so quickly that most conversations with him rapidly revealed that one had not properly thought things through. These same characteristics were also evident when he became a colleague in Cambridge in 1995. Jim was still very kind, but a bit less terrifying – probably because by then I had discovered that, like me, he was a great reader of detective novels."

Life and Times

Born in Scotland and educated at the University of Edinburgh and then Trinity College, Sir James came to economics by way of mathematics, and an interest in philosophy. He was a Wrangler during his mathematics’ degree at Trinity before pursuing a PhD in economics. Sir James was knighted in 1997.

Sir James served as President of the Econometric Society, the Royal Economic Society and the European Economic Association. He was elected a Fellow of the British Academy and an Honorary Fellow of the Royal Society of Edinburgh.

He was Visiting Professor at MIT, the University of California, Berkeley, and at Yale. Between 1968 and 1995 he was Edgeworth Professor of Economics at the University of Oxford and a Fellow of Nuffield College. He returned to Cambridge as Professor of Political Economy, a position he held until retirement in 2003.

His interest in Chinese economic development led to his appointment as Distinguished Professor-at-Large at the Chinese University of Hong Kong, where he was also Master of Morningside College from 2009.

Obituaries for the life and work of Sir James have been published in the Times (subscription), Financial Times (subscription), Scotsman, Washington Post, Herald, NBCN, Insider, Boston Globe, South China Morning Post, Fox, Msn, Yahoo, New York Times, The Economist, Neue Zürcher Zeitung (in German).

[1] Dixit, A. and Besley, T. (1997). James Mirrlees' Contributions to the Theory of Information and Incentives. Scandinavian Journal of Economics, 99(2), pp.207-235. https://onlinelibrary.wiley.com/doi/pdf/10.1111/1467-9442.00059