Thursday, 25 October 2012

The economic policy dilemma

Chris Dillow at the Stumbling and Mumbling blog (a blog well worth reading - think "The Standard" but with brains) sums up what he call the The economic policy dilemma with the Venn diagram given below
Chris argues that,
Whatever the cause, the fact is that there is a sharp trade-off between democracy and good economic policy-making.
And I agree.

But I'm willing to bet that while most economists would agree with Chris's diagram they would not agree on what goes into the left hand side of the figure. My view of "policies which are good" is likely to be very different from Chris's view of good policy. But, interestingly, we would both see our favoured policies, whatever they are, as unpopular. Which raises the question if all "good economic policies" are unpopular can we ever get anyone's version of good policy implemented? Does politics gut all economic policy, no matter whether "left" or "right", of all serious content? Are we doomed by the populist nature of politics to get crap economic policy no matter how we define good policy?


Anonymous said...

If we could go back 50 years, and have someone from the left propose policies, and someone from the right do the same, would any of the right's policies have ended up in the circle of policies which have been implemented?

Jeff W

homepaddock said...

This is very pessimistic. I'd have some intersection between the circles because some good policies are popular.

An example of this is the funding of maternity services to allow new mothers to stay in maternity centres until breast feeding is established should they choose to.

Paul Walker said...

@Jeff W My guess would be that watered down - to make them "popular" - versions of policies from both the "left" and "right" have been implemented. But the watering down is the problem.

@Homepaddock Not so much with economic policy. The economic circles really do seem to be non-intersecting.