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Time to Learn How to Act 'Macro' while Talking 'Micro'

Sina Odugbemi's picture

One of the major features of public discussion around the current global financial crisis is that the language of macro-economics is dominant. Different theories of macro-economics are being used to shape policy prescriptions, and these prescriptions are being shouted at policy makers. I suppose policy makers have to take Macro-economics 101 in order to be effective in their roles. Which is fine. But what about citizens? Do ordinary citizens have to take Macro-economics 101 too? Or is the view that the opinions of citizens do not matter, that the crisis is the exclusive preoccupation of a policy elite in each affected country? What happens when public anger erupts over the management of the crisis, as we are beginning to see in several countries?

This is a broad area of concern. This is what happens whenever policy elites advocate one reform or the other in a language dealing with vast, aggregate figures and complex unseen processes. For instance, I grew up in an oil producing country in which public services were terrible and life was hard. Yet every now and again we would be told by foreign experts that the pump price of petrol had to go up, that there were 'hidden subsidies'. Even as an editorial opinion writer who attended many seminars on the subject, I still could not figure out how these 'subsidies' were calculated by the experts. And each time the pump price of petrol went up what was certain to happen was the human suffering,and that led to public anger, strikes, protests, riots and so on. For ordinary citizens, the supposed benefits were impossible to see.

Citing important work that he and his firm did in Slovakia, Jeremy Rosner draws the appropriate lesson in  a contribution to the CommGAP publication, Governance Reform Under Real World Conditions: Citizens, Stakeholders, and Voice:

'Act macro; talk micro. Leaders in many transitional governments often think and talk too exclusively in macro-terms. Unfortunately for their communications efforts, life is lived in micro-terms. For example, in Slovakia the dominant goal of the health care reforms was to reduce the debts imposed by the health care systems. This message did not resonate with the public because it just did not relate to people’s lives. Most citizens do not come in contact with the debts of the health care system, but, rather, with doctors and hospital beds and pharmacies. Naturally, quite a different set of concerns with the health care system surfaced during focus group discussions, but the government had not sufficiently addressed these concerns in its communications. By listening to the public through opinion research, and by doing more to look at the problem through the eyes of the citizens who are the consumers of the health care system, the government found the door opened to new lines of communication that could explain the micro-benefits of the health reforms. All this action requires looking through the other end of the telescope, to go from a “macro” lexicon to a “micro” lexicon.' (p. 395)

Photo Credit: Flickr User Jacob Bøtter


Submitted by s masty on
Happily, we have an active international economic forum on economics that is micro and macro. It is called the marketplace. In it, billions of people communicate every day in billions of transctions where they vote with their nyra or dollars or yen. In what nobel laureate F.A. Hayek called spontaneous order, this establishes priorities and values based on supply and demand. A billion people cannot be bested by a handful of even the smartest planners. Schooled in macro, planners learn in university to tweak their computer models to get the right outcome, when in the real world they are far less capable of tweaking the incentives to manipulate the decisions of multitudes. Increasing savings rates, to take a very crude example, is easier to do on a computer than across a nation or a planet. So the market tends to outguess and outperform planners. The market, said Hayek, is the biggest and most efficient communication system on earth, and it most tends to malfunction when subjected to illadvised or hamfisted planning. Bad money, and central banks pumping out credit, can confuse markets temporarily into making bad decisions, as we see recently, but they readjust. The readjustment comes harder when governments keep trying to cure a hangover with more gin. This is a parable for we communicators lest we get arrogant and stop listening/dialogue.

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