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Comments on: Economic analysis and politics http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/ The Visible Hand in Economics Mon, 07 Jun 2010 15:43:38 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Cleversam http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-26202 Mon, 07 Jun 2010 15:43:38 +0000 http://www.tvhe.co.nz/?p=5063#comment-26202 Hello Matt excellent article, I am a big time fan of your site, keep up the superb work, and I will be a frequent visitor for a very long time.

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By: StephenR http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-26111 Mon, 31 May 2010 01:06:41 +0000 http://www.tvhe.co.nz/?p=5063#comment-26111 If I had to vote right now, I would struggle to pick anyone :

Weren’t you once leaning voting National because they wouldn’t change the Reserve Bank Act? Easy! ๐Ÿ˜€

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By: Matt Nolan http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-26057 Fri, 28 May 2010 22:05:18 +0000 http://www.tvhe.co.nz/?p=5063#comment-26057 @sigma1

Good points sigma – I have a friend who did honours level politics and is thinking about hitting up a masters at some point, and he also feels a great degree of cynicism. I’ve tried to get him to write on the blog, but he has been a bit busy ๐Ÿ™‚

@Andrew Coleman

Hi Andrew,

Interesting stuff. That is very true. I agree with your points on Rogernomics and Greenpeace. I would probably be less willing to give modern Greenpeace much credit – but the way they had changed views regarding animal welfare and the such is remarkable.

“but who also figures that economists who advocate living by the market should also fall by the market”

Agreed. Preaching the efficiency of the market while protected from all risks isn’t exactly a fair position to be in ๐Ÿ™‚

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By: Andrew Coleman http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-26010 Fri, 28 May 2010 08:14:56 +0000 http://www.tvhe.co.nz/?p=5063#comment-26010 Hi Matt
You might like to read
Ulrich Witt “Economic policy making in evolutionary perspective” Journal of Evolutionary Economics 13 (2003)

for a discussion of the potential role of economic analysis in developing policy. He focuses on the issue of the bounded rationality and limited attention of voters, interest groups and policy makers , and how the key to successive policy development is changing the beliefs of these groups about (a) their incomplete knowledge of the problems (b) the possible solutions. “Precisely because in the past attention has been directed to only some information, it may also be possible to discover hitherto ignored information and to change beliefs and perceptions over time, sometimes even dramatically.”

I suspect incomplete knowledge was especially true with government policy analysts during Rogernomics (and possibly with the highly politicised public sector during the recent recent Labour Government ), when broad or unfashionable viewpoints were looked down upon by policy agencies.

As much as I loathe Greenpeace for their dedication to publicity stunts and their wilful disregard of truth, one has to admit they are extremely good at focussing attention on otherwise ignored issues and at changing the parameters of debates so that society gradually changes its views and adopts approaches to the environment that are more sensible than earlier approaches. I tend to agree that this is a key to good policy making: a picture of a penguin on the end of fishing hook is worth a thousand papers on the optimal fishing quota for orange roughy, because it changes perceptions, and the changed perceptions lead to a search for a solution.

Andrew
who, for reasons of sunk costs, regrets that marketing policy is more important than economic analysis, but who also figures that economists who advocate living by the market should also fall by the market.

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By: sigma1 http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25979 Fri, 28 May 2010 04:35:40 +0000 http://www.tvhe.co.nz/?p=5063#comment-25979 @Matt Nolan

“because they care, and they donโ€™t understand that when you are pushing them to get a framework for their thinking you are trying to help, you are not trying to be โ€œevilโ€.

Ah, yes, yes indeed! I guess it is difficult for these people to imagine that while all of us have certain “axiomatic” beliefs, some invest much more of their “identity” good into the beliefs themselves, and others are much more interested in the process itself (perhaps, even invest their “identity” good into that process). Thus, it is both cognitively likely (and ultimately self-serving) to see a non-politically invested person as merely “part of the problem”. I myself have peculiar (to others) beliefs and the amount of times I have been accused of being a radical greeny or a uncaring right-winger…The irony is that I am a political “scientist” and yet I seem to always be being ‘intellectually’ discredited by my less, er, ‘politically aware’ but more politically active colleagues! No wonder so many people who study politics past MA level can’t stand party politics etc and retreat into nothing but cynical sniping from the bleachers.

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By: Matt Nolan http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25975 Fri, 28 May 2010 04:01:18 +0000 http://www.tvhe.co.nz/?p=5063#comment-25975 @sigma1

Nice comment.

I definitely find what you are saying appealing. Deep down I do believe it is a lack of will that prevents politicians, policy analysts, and society from getting an idea of “how things work” and “what we can do to move in that direction” – not a lack of ability.

However, in some areas of policy I’ve found that there is the will – but there is a seeming unwillingness on the part of some people to actually think about how things function. To describe things in neat, yet arbitrary, black and white moral boxes – often unrealistic ones (in the way where necessary assumptions are obviously violated). This reminds me of the first sort of person you are talking about.

I find these people extremely frustrating – because they care, and they don’t understand that when you are pushing them to get a framework for their thinking you are trying to help, you are not trying to be “evil”. In the end, these people get funny policies in their head and try to push them through government without any actual “understanding” going on.

As a result, it is the people with the will to do something that scare me the most really ๐Ÿ˜›

*Hopefully this rant was actually related to what is going on here – it is in my head, but by 4pm on a Friday I get tired ๐Ÿ™‚

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By: sigma1 http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25974 Fri, 28 May 2010 03:54:09 +0000 http://www.tvhe.co.nz/?p=5063#comment-25974 When I used to work in policy the one thing that annoyed me no end were experienced policy makers using the “in political reality” throw away line. Often I suspected it was a tactic to discredit any policy that one did not “like” by appeals to authority – internal politics.

But let’s assume this is not the case and indeed the policy makers were merely rationally looking out for “politically optimal” solutions to a policy problem. What still frustrated me was the fact some took issue with even doing the “pure” policy analysis first and foremost – as if by knowing the “optimally optimal” solution (so to speak) we would somehow undermine the politically optimal one.

I never understood this.

I was always pragmatic enough to step back from the initial analysis and admit it might not be politically optimal, and try and work within certain restraints. But I always wanted to understand the optimal solution (within my own bounded rationality). Something to do with understanding the fundamental drivers that would lead to a certain type of “good” being achieved. However you “tickle” those drivers, you still needed to know what they were.

It seemed that the cognitively easy route was always to do something that was minimally better than before, but annoying to the least amount of people. It seemed the primary good of any policy process was political optimization rather than efficiency optimization (as long as there was some sprinkling of that).

I was never blindly intellectually idealistic – I just believed policy makers, and politicians always had much more power to create their own political realities than they often realize.

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By: Matt Nolan http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25967 Fri, 28 May 2010 02:57:26 +0000 http://www.tvhe.co.nz/?p=5063#comment-25967 @Eric Crampton

I agree with this. I discussed my own trials and tribulations with this here:

http://www.tvhe.co.nz/2010/01/05/evolving-blog-focus/

I struggle to trust myself with more than one hat in honesty – but it is hard to make that clear. And as a person we have to put on a bunch of hats to make a decision – which is annoying.

As a result, I’ll remain idealistic and yell at people for daring to do what is optimal when wearing the second hat for now – I see it as a foil to my position defending economists.

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By: Eric Crampton http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25963 Fri, 28 May 2010 02:52:34 +0000 http://www.tvhe.co.nz/?p=5063#comment-25963 @Matt: It’s good to wear many hats. Round one ought always be the pure economics hat. Next re-run things wearing the pub choice hat. Then, re-run things wearing a personal evaluation hat. Trick is to be clear about which hat you’re wearing…I try to do that, but maybe it isn’t always clear enough.

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By: Matt Nolan http://www.tvhe.co.nz/2010/05/28/economic-analysis-and-politics/#comment-25962 Fri, 28 May 2010 02:47:42 +0000 http://www.tvhe.co.nz/?p=5063#comment-25962 @Eric Crampton

I see I see.

Are you suggesting I am an idealist. I like that.

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