The human dimension of good economic policymaking

Ian R. Harper AO and Andrew Ramadge

Economic Analysis and Policy, 2020, vol. 68, issue C, 175-178

Abstract: Good economic policymaking requires the best possible economic advice. To be an effective adviser, a policy economist needs to remain credible, even under pressure. There is a gap between theory and reality; minding the gap can help policy economists determine which theories are more likely to work as a matter of practical policymaking. Adding the human dimension makes for better decisions by casting light on how people might respond to otherwise rational policy proposals. It is not sufficient for good policy outcomes that economists confer only with their professional peers. Citizens must be persuaded that the proposed policy reform is in the best interests of the community as a whole. Good economic policymaking should not underestimate the power of incentives to override moral and ethical restraint. Regulation is a poor substitute for culturally-embedded moral restraint. While it is possible to divorce the mechanical side of economics from its moral foundations, this is not the route to good economic policymaking.

Keywords: Economic policymaking; Practical policymaking; Human dimension; Moral and ethical restraint; Metropolitan Hospitals Planning Board; Australian Fair Pay Commission; Competition Policy Review; Reserve Bank of Australia; Wallis Inquiry; Hayne Royal Commission (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:68:y:2020:i:c:p:175-178

DOI: 10.1016/j.eap.2020.09.009

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