Economic Considerations in Language Policy Francois Grin




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Economic Considerations in Language Policy

Francois Grin

Grin, Francois (2006): Economic Considerations in Language Policy. In: Ricento, Thomas (Ed.): An Introduction in Language Policy. Maiden/Oxford: Blackwell. S. 77-94.

Economic considerations in language policy constitute a relatively new development. Traditionally, policy discourses about language have tended to rely on one of three main perspectives: a legal one, in which language policy often takes the form of the enunciation of language rights in given contexts; a culturalist one, in which languages are mostly seen as manifestations of culture, confining policy to a set of measures affecting corpus or, at best, support for literary creation or publication; and an educational one, focusing on language teaching.

By contrast, economics is not often thought of as a discipline relevant to language. This situation has changed in recent years, as a result of an evolution taking place on two distinct planes. On the one hand, a certain degree of interest in language matters has always existed in the economics profession, resulting in the progressive development of a small but exciting body of literature raising questions that prac­titioners of language generally omit. On the other hand, an increasing number of specialists in language issues have come to realize that the types of policies they often advocate have economic implications. These congruent (though not necessarily converging) concerns have so far led not to a unified economic theoretical perspective on lan­guage, but nonetheless to the development of a range of interrelated propositions on language policy. This chapter offers a critical review of this set of propositions.

The first section lays some of the conceptual groundwork by reviewing the field generally known as "language economics" or "economics of language." The second section presents the main strands of research in language economics. The following section turns to the economic approaches to language policy and argues that the latter must be seen as a form of public policy - just like transportation policy, environmental policy, etc. The final section highlights some key findings of language policy evaluation in economic perspective.



What is the Economics of Language?

Several authors trace the emergence of language economics back to the publication of Jacob Marschak's paper on "Economics of language" in Behavioral Science (Marschak, 1965). Surprisingly, relatively few scholars since then seem to have been concerned with proposing a formal defini­tion of the field. Confining ourselves to edited books on language economics, we can quote Vaillancourt (1985, p. 13), who characterizes publications in the field as "writings by economists on language ques­tions"; Breton (1998, p. iii), who talks about "topics related to the inter­connections between languages ... and the economy"; and finally, in his introduction to a collection of reprints of 20 papers by different authors, Lamberton (2002, p. xi), who eschews any definition, but starts out by stating that the field "merges with the economics of information."

Given the relative lack of formal definitions, I keep using one pro­posed elsewhere (Grin, 1996): "The economics of language refers to the paradigm of theoretical economics and uses the concepts and tools of economics in the study of relationships featuring linguistic variables; it focuses principally, but not exclusively, on those relationships in which economics variables also play a part" (p. 6). This definition points to the three main lines of inquiry in the economics of language, namely:


  1. How do language variables affect economic variables (for example, do language skills influence earnings)?

  2. How do economic variables affect linguistic variables (for example, do the relative prices of certain goods affect patterns of language use)?

  3. How do essentially economic processes (such as constrained utility maximization) affect language processes such as language dynamics?

The very notion of an economic perspective on language raises a number of epistemological questions regarding the delimitation of academic disciplines, in relation to their application to language issues. For the purposes of this chapter, it will be enough to state the spirit in which economics is invoked here. No issue is, per se, "sociological," "linguistic," "political," or "economic"; rather, almost every issue presents sociological, linguistic, political, and economic dimensions. The corresponding disciplines offer complementary angles from which an issue can be looked at, and depending on the issue at hand, the

contribution of any particular discipline can be major or minor. This also applies to economics, which can contribute to the study of language issues through insights or conceptual tools that other disciplines do not provide.

Let us also note that this chapter focuses on the contributions of mainstream economics. This merely reflects the absence of research work on language issues from the perspective of non-mainstream (e.g., Marxian) economics. Likewise, this definition does not cover the rather different area of "the language of economics" whether from an economic (McCloskey, 1990) or linguistic (Henderson, Dudley-Evans, & Backhouse, 1993) perspective.

i The Main Lines of Research in Language Economics

A historical perspective

The economics of language, as an identifiable field of research rooted in economics but addressing language issues, dates back to the mid-1960s. Much of the early work in language economics is due to Canadian (particularly Quebecois) economists, and their papers analyze the French-English language issue; likewise, most US studies equate, to this day, "the economics of language" with the econometric invest­igation of earnings differentials between Hispanics and Anglophones. This "embeddedness" of researchers in their social and political context probably explains the three important stages in the early develop­ment of language economics, which well into the 1980s focused on the effects of language on labor income (Grin & Vaillancourt, 1997, pp. 44-5). First, many of the earlier contributions emphasized the role of people's native language as an ethnic attribute affecting their earnings - thereby raising the question of possible language-based discrimination. A second wave of contributions analyzed language (generally, though not always, a second language) as a form of human capital: this approach underpins estimations of the rate of return, for Hispanics in the United States, on competence in English. In a third wave, opened by Vaillancourt (1980), language was treated both as an ethnic attribute and as an element of human capital.

Other avenues had of course been pursued in parallel, discussing for example the meaning of language as a medium of international

trade (Carr, 1985) or as a criterion for the distribution of resources between groups (Breton, 1964; Breton & Mieszkowski, 1977), and by the early 1990s, the economics of language had also started to fan out in a broader range of topics, addressing for example language dynamics and minority-language promotion.

The main lines of research in language economics can be arranged in four main categories, three of which are briefly reviewed in the rest of this section. The fourth one, which is centered on language-policy evaluation, is discussed in a section of its own. A more extensive literature review can be found in Grin (2003c).

Language and earnings

This line of research, apart from being the oldest in language eco­nomics, remains the main one in terms of the number of publica­tions. It focuses on the effect of language skills on labor income (or "earnings"). This mostly empirical tradition uses survey or census data on self-reported language skills (in the first language [LI], L2, L3, etc.) and self-reported earnings to see, in line with human-capital theory, whether the former are predictors of the latter, controlling for other determinants of income such as education, work experience, or (data permitting) type of work. Proper data sets remain, outside of Canada, remarkably few and far between; accordingly, the most detailed studies use Canadian or Quebec data (see Vaillancourt, 1996, for an overview; or various contributions in Breton, 1998). Studies on other countries rely on survey data, including in particular on immigrant groups in the United States (e.g., Bloom & Grenier, 1996; Davila & Mora, 2000), Australia, (e.g., Chiswick & Miller, 1995), Israel (e.g., Chiswick & Repetto, 2001), or Germany (Dustmann, 1994), some­times in a comparative perspective, or on representative population samples (Grin, 1999, for Switzerland).

Far fewer are the papers venturing a theoretical explanation other than the human-capital model of the effect of language on earnings. Early models (Raynauld & Marion, 1972) invoke a deliberate strategy, by the capitalists in a dominant group, to channel the largest possible share of aggregate income to group members; Lang (1986) views un­equal earnings as the result of cost-minimizing strategies by owners of capital (most of whom are assumed to belong to one group) employing workers from the other group.

Language dynamics

Research proposing explanations for the decline or spread of languages varies considerably. Some focuses on minority languages, generally assuming speakers to be bilingual and to also know a majority language (Grin, 2002); other research focuses on actors' interest in learning or not learning another language, taking account of the costs and benefits of this decision. This line of work (Church & King, 1993; Dalmazzone, 1999; Selten & Pool, 1997) stresses one aspect of language that, from an economic perspective, has crucial analytical importance and sets it apart from standard economic goods. The more people use it, the more valuable it becomes, as a tool for communication, to people who already use it. This goes beyond non-rival consumption - a standard feature of public goods - leading some authors to define language as a "super-public" or "hypercollective" good (De Swaan, 2001). The "hypercollective" nature of language opens up some of the most challenging research avenues in language economics, but it does contain numerous pitfalls. For example, it has been used by some to defend, on allegedly economic grounds, support for the teaching of majority languages (Jones, 2000). However, the validity of this proposi­tion crucially rests on one assumption, namely, that language is only a tool for communication (sometimes relabeled a "communication technology"). Sociolinguists have known for a long time that this does not do justice to the complexity of language in human experience.



Language and economic activity

This somewhat heterogeneous category brings together research that studies the role of language in core economic activities like produc­tion, consumption, and exchange. For example, do people really prefer goods to be advertised and sold to them in their native language? Is productive efficiency affected by the choice and range of languages used in the company? Some argue that the relationship is positive, because linguistic diversity may allow for greater creativity, while others contend that diversity mostly gives rise to added communica­tion costs. Many of the contributions in this category are case studies, too numerous to discuss here. However, there also exists some valu­able (and regrettably neglected) theoretical work, such as Hocevar's (1975) examination of markets for language-specific goods, or

Sabourin's (1985) analysis of the "matching" process between the language profile of a job in a firm and the language profile of a worker.

It is important to point out that the production, consumption, and exchange of "language goods" (such as translation services, language learning materials, etc.) is not a core concern for language economics, because the economic processes operating are not necessarily different from those operating in the case of any standard good. Some com­mentators may dispute this point: for example, Lamberton's (2002) edited volume casts the net wide and includes a study on telephone interpreting services. Nonetheless, translation and interpretation can have profound meaning in language dynamics (Melitz, 2000) and language policy (Pool, 1996).

Let us also observe that, alluring as it may seem, the analogy between language and money is liable to create confusion rather than fruitful analytical insight, because language has, analytically, very little in common with either goods or currency as the object being exchanged.

The Economics of Language Policy Evaluation

Economics and policy evaluation

The economics of language policy evaluation constitutes an additional and increasingly active line of research. In what follows, "policy" refers to public policy, initiated and carried out by the state or its surrogates, although some of the considerations developed below can carry over to corporate environments.

Economic perspectives on language policy blend in almost seamlessly with a distinct, yet closely related, disciplinary tradition, namely, policy analysis (Dunn, 1994), which is, in turn, solidly anchored in political science. The extent to which policy analysis is, or is not, wedded to the "rational-choice" perspective of political science is a matter that will not be explored further here; however, it is certainly concerned with increases in welfare - the definition of which admittedly raises problems of its own. The basics of the approach are straightforward: ex ante, several policy options regarding language can be envisaged; each carries advantages and drawbacks, which can sometimes be reinterpreted as "benefits" and "costs" (albeit in a broad sense: see below), and

the policy option that should be chosen is the one that maximizes the difference between benefits and costs. Ex post, policies that have been implemented can be evaluated by identifying and measuring their benefits and costs, in order to assess which, out of a given set of policies, has proved most effective, least costly, or - combining both criteria - most cost-effective. Since this approach characterizes the economic- as well as the policy-analysis mindset, we shall, in this and the next section, use either phrase to denote the analytical underpinnings of studies in this area.

For the most part, these studies address issues of language status, while language corpus is largely ignored or taken for granted. This may be because the actual cost of coining new vocabulary or engaging in spelling reform is comparatively modest; by contrast, elevating a language to official status, or introducing another language as a medium of instruction in the education system, is likely to be a much costlier policy decision - and hence one that does deserve attention.

Language policy can be broken down according to its goals, as suggested by Kaplan and Baldauf (1997, p. 59 ff), who list 11 different categories. From the perspective of policy evaluation, such distinctions matter less than the principle sketched out above, namely, the weighing of the pros and cons of the options considered. Let us, somewhat roughly, define a linguistic environment as a set of demolinguistic, institutional, and sociolinguistic facts - all of which are facets of what Fishman calls (with hyphens), language-in-society. Language policy, ultimately, proposes movement from one given, existing "linguistic environment" to another, supposedly preferable linguistic environment. Therefore its object, instead of being a language in relation with others, may be linguistic diversity itself (Grin, 2003a).



The rationale for state intervention

To the extent that language policy is a form of public policy, another question that arises is why the state should intervene at all in language matters. One underlying assumption of mainstream economics and policy analysis is that the free interplay of market forces can be expected to result in the provision of an adequate amount of goods and services, at minimum average cost. There are, however, exceptions to this basic principle, and these exceptions, which give rise to what is known in the literature as "market failure," justify state intervention. Six main forms of market failure can be identified:



  1. insufficient information preventing actors from making the best decisions;

  2. transaction costs preventing actors from closing deals that would otherwise prove mutually advantageous;

  3. the absence of markets for certain goods or services - for example, there is no market on which future, yet unborn genera­tions could express their wish for a particular animal or vegetal species to be preserved;

  4. the existence of "market imperfections" (typically, monopolies or oligopolies), resulting in a sub-optimal production level for some goods, usually with an excessive market price for these goods;

  5. positive or negative externalities, that is, situations in which one person's (or group's) behavior affects other persons' welfare, without the loss or gain thus created giving rise to any form of compensation. For example, the fact that I drive a massive SUV causes pollution, which lowers the appeal and market value of houses located along the road; yet as a driver, I am not required to pay compensation to the people who live in and/or own these houses;

  6. the existence of public goods, which can be consumed by one person without reducing the amount of the good available to another, and whose consumption cannot be restricted to those who actually pay for it; the standard textbook example is public lighting. In the presence of super-public or hypercollective goods (see preceding section), market failure is even more likely.

Linguistic environments exhibit many forms of market failure. For one, future generations cannot bid for the preservation of endangered languages. In a market mechanism, this absence from the bidding process means the same as if they did not care for these languages, which is quite a different matter. Externalities are also present, if, for example, a person's language learning (or non-learning) behavior affects the value of another person's language skills. In fact, it could be argued that almost every form of market failure occurs when it comes to the provision of linguistic diversity. However, it is enough to establish that only one type of failure is present to justify state intervention. Hence, from a policy-analysis standpoint, language policy z's justified, and the policy-analysis perspective provides a rationale for intervention. This point, which may seem obvious to some readers, deserves to be made, since there is no lack of voices, in the political debate, claiming

that languages should best be left to fend for themselves, going as far as to dismiss most language-policy interventions as harmful meddling.

Estimating language environments

The next problem is to select a policy among several options. In principle, policy analysts will have to identify and measure, for each of the options considered, different types of effects. The latter can also be defined as components of the net value of the linguistic environments that are expected to emerge as a result of choosing alternative policies. The conceptual and methodological difficulties of carrying out this evaluation in practice are, at this time, far from solved; nevertheless, the procedure can help to identify coherently distinct steps in an evaluation exercise.

The first and less arduous step is to estimate the net "private market" value of each policy option. This refers to effects that can be observed on a market and which accrue to identifiable individuals. For example, a policy requiring civil servants to be trilingual (instead of merely bilingual) will, all other things being equal, drive up the wage rate of trilinguals in society as a whole, at least in the short run. These gains, however, may imply costs (such as increases in taxes to cover the corresponding wage increases in the public sector, unless this effect has been compensated for by a drop in the wage rate accruing to monolingual and bilingual employees); such costs will have to be subtracted from the gains, in order to yield net private market value (which may a priori be positive or negative).

One should then attempt to move on to the estimation of social market value, which is the aggregate of private market values across all members of society. Unfortunately, aggregation will require a more complex operation than a simple sum, owing to the presence of extern­alities. If externalities are positive (or negative), social market benefits will exceed (or fall short of) the simple sum of private market benefits.

The steps just described for market value then need to be replicated for the much more complex non-market value - namely, the gains and losses associated with a change in the linguistic environment, but with­out these gains and losses being expressed through one or another ex­plicit market. These effects, which can often be described as "symbolic," entail direct gains or losses in satisfaction (or, in economic parlance, in "utility"). There again, these effects must be estimated at the individual level, and then aggregated to obtain social non-market value.

Non-market benefits and costs are perfectly legitimate concerns for an economic evaluation because, as we have noted before, economic analy­sis is not confined to material or financial questions. The psychological loss experienced when one's language is (formally or not) downgraded to a secondary position is a relevant form of cost; likewise, the pride that may be associated with the visibility of one's minority language in prestige domains is a relevant benefit. Obviously, estimating these non-market benefits and costs is extremely difficult and, to my knowledge, this has not been formally attempted yet. The most promising methodo­logies are likely to be found in environmental economics, in which a considerable body of experience has been developed in the evaluation of complex, non-market commodities, such as clean air or water.

For each policy contemplated, one would then compute the sum of social market and social non-market benefits and costs, yielding the overall net value; the policy that promises to give rise to the highest overall net value should, ceteris paribus, be selected.

The distributive dimension

The procedure that enables us, in principle, to define a policy as the "best" relies on a measurement of aggregate (social) welfare, encom­passing both market and non-market effects. This assessment focuses on resource allocation. However, moving from an existing to a pre­sumably better linguistic environment also entails gains and losses, and the question arises of who gains, who loses, and how much, as a result of the implementation of language policy.

This distributive aspect of policy tends to be neglected in economic analysis, under the all too comfortable assumption that if a policy does give rise to a net welfare gain, then gainers can compensate the losers. The problem, however, is whether they actually do so of their own accord, or if a compulsory compensation mechanism has to be built into the policy design for such compensation to occur. At the same time, the form and amount of such compensation needs to be determined, on the basis of a reliable and transparent identification of the transfers that arise without a compensation mechanism.

In order to clarify matters, let us consider just one example of such transfers. In the case of the European Union, the progressive, though presently not official, drift toward the dominant, or even sole, use of English as a working language of European institutions amounts to a massive transfer in the direction of native speakers of English, paid for

by everybody else. This transfer arises as a result of the fact that native speakers of English: (1) need not invest any time or money in learning other languages, since native speakers of other languages learn English; (2) may profitably invest the resources thus saved in other, growth-enhancing development strategies; (3) get a quasi-monopoly on the market for translation and interpretation into English, as well as on the market for English-language text editing and language teaching; (4) need not make any effort to make themselves understood in inter­national settings; and (5) retain a decisive edge in negotiation and con­flict, simply because it takes place in their own language, while others have to struggle in English - for them, a foreign language (Grin, 2004). By comparison with a system resting on the hegemony of one of the Union's official languages, many alternative arrangements can prove superior from a public-policy perspective, even if they appear to be costlier in terms of resource allocation (Pool, 1996). This result arises because such alternative arrangements do not carry negative distribut­ive implications. Alternatively, the transfers entailed by a system in which English enjoys a hegemonic position can be compensated for through various subsidy schemes from predominantly English-speaking members of the Union to all the others, in order to finance, for example, the latter's expenditure on English-language teaching (Pool, 1991; van Parijs, 2001).

The Practice of Language Policy Evaluation

Practical experience in language-policy evaluation remains relatively scattered and partial. However, it has been applied in recent years to an expanding range of cases (Chalmers, 2003; Grin & Vaillancourt, 1999; Grin et al., 2002), and in this closing section, I highlight some areas where this approach has yielded useful results.



Norms, outputs, and outcomes

As noted at the beginning of this chapter, much of the published literature assessing language policies is rooted in law or sociolinguistics. Therefore, policies have often been assessed in terms of the legal texts, that is, norms (for example on minority-language education) in which policies are enshrined, or in terms of the administrative measures taken,

usually relying, for a measurement, on the direct output of these meas­ures (for example, the number of new minority-language classes opened during a given calendar year). However, neither form of assessment tells us whether these legal norms or policy measures have been effect­ive. Actual effectiveness can only be measured in terms of outcomes further down the line. For example, if a policy aims at minority-language revitalization through the education system, the proper criterion for assessing the policy must be an indicator of revitalization itself, such as increases in language competence among the target population, or in actual language use. Thinking in public-policy terms helps to focus attention on truly relevant evaluation criteria.

Cost evaluation

The costs of language policies are largely unknown, and are liable to be the stuff of wild fantasies - usually in the form of cataclysmic expectations of uncontrollable expenditure if diversity-preserving policy measures were adopted. Where figures exist, they yield a sobering picture. Although the lack of data often prevents precise calculations, cost ranges can be estimated (Grin, 2004). For example, the sup­posedly prohibitive cost of translation and interpretation in European institutions numbering 15 member states and 11 official languages amounted to €1.82 per resident per year; translation and inter­pretation represented 0.8 percent of the European Union budget (corresponding figures for the expanded EU are not yet available).



The concept of counterfactual

One of the single most important concepts in policy evaluation is that of counterfactual (Grin, 2003b). This term does not refer to anything that would be contrary to fact; rather, it refers to "what would occur in the absence- of a policy," or, even more directly, to "the relevant alternative." For example, the added expenditure entailed by moving from a monolingual to a bilingual education system is much smaller than commonly believed. Where evaluations have been made, they point in the direction of a 3-4 percent range, because even if the education system were to remain monolingual, children would have to be schooled anyway. Therefore, only comparatively modest additional financial outlays need to be factored in. However, in line with the

procedure sketched out in the preceding section, we should broaden the range of effects (both market and non-market) taken into con­sideration. This means that the assessment of both the policy measure and the counterfactual should take account, for example, of the differ­ential effects they may have on school participation, graduation, and drop-out rates among the majority and the minority population. The true costs of the counterfactual (that is, in this example, of not engaging in a policy of bilingual education) can prove to be much higher than expected, thereby significantly heightening the attractive­ness of the bilingual education policy (Vaillancourt & Grin, 2000).

Conclusion

Let us, in conclusion, recall that although language-policy evaluation as described here has an important role to play, its limits must not be forgotten. The economic approach to language policy, despite its relevance, is in no way meant to dictate policy decisions or to displace other approaches. I have stressed, earlier in this chapter, that different disciplines provide complementary perspectives. This is also true when the issue at hand is language policy. By definition, language policy is an expression of a set of choices that society makes. As such, it remains an inherently political matter. The main role of economic considerations in language-policy research, therefore, is to help social actors assess the pros and cons of different avenues open to them, and to make principled and transparent choices.



Annotated Bibliography

Church, J. & King, I. (1993). Bilingualism and network externalities. Canadian Journal of Economics, 26, 337-45.

A formal model of language as a "super-public" good whose commun-icational value increases with the number of users, suggesting that majority- (rather than minority-) language learning may need to be supported to maximize allocative efficiency - this result, however, requires the assumption that language is nothing but a tool for com­munication. The paper also offers a good introduction to the concept of externality.

Grin, F. (2003b). Language policy evaluation and the European charter for regional or minority languages. London: Palgrave Macmillan.

This book, which includes two invited chapters by R. Jensdottir & D. O Riagain, is entirely devoted to the evaluation of minority-language protection and promotion, from the standpoint of public-policy analysis. It focuses on the meaning of effectiveness and cost-effectiveness as criteria for policy selection and design, and it is primarily intended as a handbook for decision-makers in language policy when they need to formulate a structured policy approach.

Grin, F. & Vaillancourt, F. (1999). The cost-effectiveness evaluation of minority language policies: Case studies on Wales, Ireland and the Basque Country. Monograph series, No. 2. Flensburg: European Centre for Minority Issues.

This text contains a causal model that formally connects policy decisions, direct policy outputs, language behavior, and final policy outcomes in terms of language revitalization. The theoretical model is applied to cost-effectiveness evaluations illustrating different types of policy intervention.

Pool, }. (1996). Optimal language regimes for the European Union. International Journal of the Sociology of Language, 121, 159-79. An exploration into six different models of language policy for multilingual organizations. Its main result is to show that, contrary to frequently held beliefs, there are no "obviously" superior solutions to this problem, and that the rank-ordering of solutions, even under appropriately identified costs and benefits, depends on priorities which have to be clearly enunciated - and adequately justified.

Vaillancourt, F. (ed.) (1985). Economie et langue. Quebec: Conseil de la langue francaise.

The first volume ever published entirely devoted to language eco­nomics, this contains in particular essays by Carr (1985) and Sabourin (1985) on issues that, some 20 years on, remain insufficiently explored and have potentially important implications for language-policy evaluation.

van Parijs, P. (2001). Linguistic justice. Politics, Philosophy and Economics, 1, 59-74.

This careful exposition and theoretical discussion of the distributive consequences of linguistic dominance, under the assumption that language is chiefly a communication tool, implies that the drift toward the hegemony of one language is a natural process. Therefore the focus

of policy evaluation is shifted toward the relative appropriateness of alternative compensation schemes.

Discussion Questions



  1. In what fundamental sense is language policy a form of public policy, just like policies affecting transportation, health, or the environment?

  2. Critically assess the notion that "language economics merges with the economics of information."

  3. Describe several instances of actual or potential language policy, and check for each case whether you can spot the presence of one (or many) forms of "market failure," thereby strengthening the case for state involvement.

  4. Provide examples of the non-market benefits and costs of granting partial official recognition to immigrant languages in countries like Britain, France, or the Netherlands. Which of these benefits and costs would you take into account in a policy decision, and for what reasons? Are there some that you might deliberately choose to leave out of your calculation? Why?

  5. Use the concept of counterfactual to develop a hypothetical policy case in favor of making Navajo an official language of some Southwestern states in the United States.

NOTE

The author thanks Francois Vaillancourt for helpful comments on an earlier version of this chapter. The usual disclaimer applies.



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