Economics and the public policy process: What can economists do?∗∗

Revision of Invited Paper, NZAE Conference, University of Waikato, Hamilton, New Zealand, August 24–26, 1992.

Abstract

The potential for economists to contribute to the public policy process is explored. There are opportunities for improvement in public policy, and for economists to contribute to this process, as long as the political process is not perfectly coordinated. Traditional welfare economics and public choice theory, which hold that there is slack in the political process, imply that there is ample scope for economists to contribute to economic reform. Chicago political economy, on the other hand, holding that the political process is efficient in the sense that existing programs are superior to available alternatives, implies that there are no opportunities for economists to contribute to economic reform. In sharp contrast, it is argued here that economic ideas have consequences and that opportunities for economic reform abound because of information and incentive problems that are endemic in the collective choice process.

Notes

Revision of Invited Paper, NZAE Conference, University of Waikato, Hamilton, New Zealand, August 24–26, 1992.

Department of Agricultural and Resource Economics, North Carolina State University.