Expertise and institutional design in economic committees

Abstract

In this paper, I consider the problem of selecting and justifying a lost of principles of expertise as part of a methodology of expert judgment in economics. I argue that a methodology of expertise, trying to list and justify a number of principles of expertise, is in need of a theoretical background against which to select, evaluate, and weight each of the principles. I explain by means of case studies why problems arise for lack of such background, using the Bank of England’s Monetary Policy Committee and the Council of Economic Advisors as examples. I then make a proposal for a categorization in ‘types of committees’ and ‘types of expertise,’ and use it to evaluate some of the principles of expertise that have been previously suggested in the philosophical and economic literatures.

Keywords:

• expertise
• principles of expertise
• methodology of expertise
• economic methodology

Notes

No potential conflict of interest was reported by the author.

1 ‘Institutional design’ is used here in a non-technical sense. Institutions are loosely defined as ‘formal and informal rules, enforcement characteristics of rules, and norms of behavior that structure repeated human interaction’ (North , 1989, 1321), and in the context of this paper the institutional design applies to those formal and informal rules that regulate the interaction of experts in committees.

2 For reasons of space, an appendix providing the original statements of the principles, as well as the complete lists for each author, could not be given in this paper. The interested reader may contact the author to request the Appendix.

3 There can certainly be disagreement on whether the Boskin Commission’s task was in fact a complex one or a simple one, depending on whether one looks at the commission’s official mandate or at the set of problems it was dealing with in reality. I cannot address this problem in the limited space of this paper, but, in describing the Boskin Commission, I follow the interpretation that is shared to a large extent by Reiss (2008).

4 On this, see Bureau of Economic Analysis (2009), Section 2.1: Production Boundary.

5 Source: the Bank of England’s official website, http://www.bankofengland.co.uk/monetarypolicy/Pages/framework/framework.aspx.

6 The minutes of the MPC meetings are made available on the Bank of England’s internet website within six weeks from the day of each meeting – http://www.bankofengland.co.uk/publications/minutes/pages/mpc/default.aspx.

7 That this is the kind of expertise required in the Boskin Commission seems confirmed by one of its recommendations: ‘The BLS [Bureau of Labor Statistics] needs a more permanent mechanism for bringing outside information, expertise, and research results to it’ (Boskin et al. , 1996).

8 Because the definition derives from the previous analysis of the concept of evidence I refer the reader to Reiss (2008, chapter 1) for further clarification of the definition.

9 For example, members of the FOMC, the US equivalent of the Bank of England’s MPC, receive a Beige Book, which summarizes the US current economic conditions, mostly in form of interviews and anecdotical evidence, and a Green Book, which contains in-depth analysis of the economy, the typical economist’s ‘raw data’: tables, graphs, statistics, and other technical reports. Similar reports and summaries of data are given to MPC members in the days preceding each monthly meeting.