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How Can Economists Change the World?

Sina Odugbemi's picture

Economists dominate international development, and, in the case of the World Bank, well, that is an instance of full spectrum dominance. In an article in Public Choice (2010) 142:1-8, titled 'Persuasion, slack, and traps: how can economists change the world?', Bryan Caplan has some bad news as well as some good news.

The bad news is a restatement of the argument of his The Myth of the Rational Voter (Caplan 2007): "I argue that economically inefficient policies survive by popular demand. The public systematically misunderstands economics - and probably many other policy relevant subjects - leading voters to support policies contrary to their best interests. I also  maintain that the public's misconceptions are, in a sense, wilful. Most people embrace political and economic beliefs on the basis of their emotional appeal, not dispassionate analysis."

 

Now, I don't entirely buy this because I think it is too sweeping a claim about how public opinion works, and the drivers of political behavior, but I am reporting. What matters here is that Caplan argues that his is not a counsel of despair. He says that while voters might be irrational it is possible to persuade them by throwing all sorts of things at them: facts, logic, the way arguments on public policy are framed, the values that policy promoters appeal to, and even the choice of words.

So, how can economists change the world? Apparently, they have to start finding 'the best way to communicate the insights of economics in a compelling way.' Caplan is scathing about the 'lamentable rhetorical habits of economists', which is an elegant way of saying very few economists speak or write English.  So, he has three suggestions for economists:

  1. Highlight the contrast between the popular view and basic economists in stark terms.
  2. Explain why the latter is true and the former is false.
  3. Make it fun.
     

Caplan says that: 'Most economists simply aren't trained to win over a broad audience. When they enter the public forum, they go head-to-head with practiced demagogues. To successfully compete here, economists need new skills.'

I disagree that the public forum is dominated by demagogues; again, this is too sweeping a claim. But it seems clear that many economists simply refuse to think about public opinion and how it affects the policy process, whatever the country. Which is why we have the near-universal preference for technocratic solutions that avoid the public, or politics, even when it is clear that public support would be necessary for development results to be achieved. Economists, especially those working in international development, might want to consider Caplan's suggestions. The full article is worth reading.

 

Photo Credit: Flickr user viking_79

Comments

Submitted by s masty on
in his 1974 nobel speech, f.a. hayek savaged economists for their insistence on making decisions based only upon what can be measured when human behaviour is far more complex. Google his short speech and read it. He said that economics, an imperfect or soft science, apes the hard sciences without sufficient hard data. then, to paraphrase, they slam the policy suitcase, and cut off all the sleeves and neckties that do not fit. he could have been describing the world bank and other agencies. yes, sina is right that bean counters and technocrats - however bright - are often deaf to the need for communication and, if not deaf, often incompetent communicators. but hayek's deeper problem remains unaddressed. in the more limited sphere of development economics, a partial solution is to include stakeholder research - a function of communication - into project design in order to help identify attitudes that may not easily be turned into metrics that can be simple but also simplistic.

Submitted by E Wilson on
Good discussion, very important topic. Too much solution, too little persuasion on the problems -- economists and those who work in places like the World Bank don't realize how much they are solution-bias. Unlike the politicians who live in the real world where voters demand answers to questions. So many times economists assume that everyone else, and even the public, understands the research data and has a concept of the problems and trends the experts see emerging. So they talk solutions as if people understood the urgent needs. I always advise starting from the premise that the world needs to understand what is worrying the experts, and feel it viscerally, before they will consider a solution that changes the status quo. You need to talk about why people won't have anything to live on in their old age before you launch a new social welfare program. Some of my best friends are economists but.....

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