Is your fu­ture in the safest hands?

Belfast Telegraph - Business Telegraph - - Front Page - By Es­mond Birnie, Chief Econ­o­mist UU Eco­nomic Pol­icy Cen­tre @ul­steruniepc

Would ex­perts do a bet­ter job of gov­ern­ing Ni than our politi­cians, asks Es­mond Birnie

Who would you rather made dif­fi­cult de­ci­sions about your fu­ture — politi­cians or ‘ex­perts’? A num­ber of ar­gu­ments have been used to jus­tify a trans­fer of de­ci­sion-mak­ing power away from elected politi­cians to­wards ex­perts or tech­nocrats.

It is claimed that some de­ci­sions are too com­plex and have too long a time scale to be han­dled well by politi­cians. The UK has in­tro­duced a Na­tional In­fra­struc­ture Com­mis­sion (NIC) to con­sider what might be the very long term in­fra­struc­ture needs of the coun­try. The NIC has had some suc­cess in pro­duc­ing a list and iden­ti­fy­ing how much money would be needed. Gov­ern­ment still de­ter­mines which projects are ac­tu­ally funded (and when).

More­over, cer­tain par­tic­u­larly con­tro­ver­sial pro­pos­als such as ex­tra air­port run­ways in the South East of Eng­land are still stuck in the tra­di­tional plan­ning and po­lit­i­cal process.

Another ar­gu­ment is that de­ci­sion mak­ing by tech­nocrats re­moves the abil­ity of politi­cians to at­tempt to gain elec­toral ad­van­tage through short-run macroe­co­nomic ma­nip­u­la­tion.

In fact, 20 years ago the Bank of Eng­land joined the ranks of those cen­tral banks which are po­lit­i­cally in­de­pen­dent — this has im­plied there is a greater dis­tance be­tween gov­ern­ment and de­ci­sions about lev­els of in­ter­est rates. Politi­cians can still set the ul­ti­mate ob­jec­tives. There is now a de­bate about whether the Bank’s ob­jec­tive should re­main solely one of con­trol­ling in­fla­tion or should an al­ter­na­tive be used? For ex­am­ple, the growth of nom­i­nal GDP.

Some­times, the as­cent of the ex­pert has been a re­sponse to cri­sis. Mario Monti, de­spite never hav­ing held an elected po­si­tion, was el­e­vated from be­ing an eco­nomics pro­fes­sor to Italy’s Prime Min­is­ter in the midst of one phase of the eu­ro­zone debt cri­sis.

There is, of course, a North­ern Ire­land-spe­cific as­pect. De­vo­lu­tion in North­ern Ire­land did op­er­ate be­tween 2007 and Jan­uary 2017 but was cri­sis-prone in re­cent years and is now in abeyance.

Ex­pert ad­vice was pre­vi­ously sought on par­tic­u­lar is­sues, such as how to fi­nance the wa­ter ser­vice or how to re­struc­ture hospi­tal pro­vi­sion — though not then im­ple­mented.

It might be asked whether any re­stored Stor­mont might wisely de­volve some of its de­ci­sion mak­ing pow­ers to pan­els of ex­perts or could ex­perts even be an al­ter­na­tive to de­vo­lu­tion?

All that said, I think there are very strong rea­sons why we should be wary about mov­ing much fur­ther to­wards tech­noc­racy.

It has to be asked, who are th­ese tech­nocrats or ex­perts and would they nec­es­sar­ily im­prove the qual­ity of de­ci­sion mak­ing? As the reader might ex­pect, I gen­uinely be­lieve that univer­sity ed­u­ca­tion is a so­cial good. How­ever, his­tory sug­gests that aca­demics or peo­ple with doc­tor­ates or business ex­perts do not nec­es­sar­ily pro­duce bet­ter poli­cies. Pres­i­dent J.F. Kennedy, for ex­am­ple, brought some very gifted in­di­vid­u­als from academia and in­dus­try into his White House team, but in later years some of those in­di­vid­u­als such Robert Mcna­mara (for­mer pres­i­dent of the Ford com­pany) and Walt Whit­man (econ­o­mist) were key ex­po­nents of Amer­ica’s ever greater in­ter­ven­tion in Viet­nam. The plan­ning sys­tems of the for­mer Soviet Union and East­ern bloc were very well pop­u­lated with doc­toral sci­en­tists, econ­o­mists and statis­ti­cians, but that was not enough to make an ab­surd sys­tem work.

Some of the cur­rent po­lit­i­cal in­er­tia in North­ern Ire­land or, in­deed, the UK, gen­er­ally re­flects the ab­sence of po­lit­i­cal con­sen­sus. There are deep di­vi­sions for or against Brexit or about the rel­a­tive mer­its of en­vi­ron­men­tal pro­tec­tion ver­sus liv­ing stan­dards’ growth. Ex­perts and tech­nocrats will not be able to magic such a con­sen­sus into be­ing.

Des­per­ate times may re­quire ex­treme mea­sures, but the pos­si­bil­ity of an un­elected aca­demic econ­o­mist hav­ing po­lit­i­cal power thrust upon them, as hap­pened to Mario Monti in Italy, is prob­lem­atic. Monti lacked the po­lit­i­cal le­git­i­macy to suf­fi­ciently re­form the Ital­ian econ­omy and gov­ern­ment. To the ex­tent that out­side pres-

sure com­ing from the EU had con­trib­uted to his rise to power, that made this sit­u­a­tion worse.

A more fea­si­ble model is shown in the way that in the Repub­lic of Ire­land at the start of the bail-out/aus­ter­ity pe­riod, Univer­sity Col­lege Dublin econ­o­mist Colm Mccarthy was asked to re­port across the range of Ir­ish pub­lic ex­pen­di­ture — were there any ac­tiv­i­ties the Ir­ish gov­ern­ment should stop? In the end, the Ir­ish gov­ern­ment chose not to fol­low the de­tail of the Mccarthy re­port, but it has served the pur­pose of help­ing politi­cians (and the elec­torate) think more about the un­think­able.

By all means let us seek to have the best in­formed politi­cians and civil ser­vants pos­si­ble. This is where the uni­ver­si­ties and other venues for in­formed and ev­i­dence-based de­bate could be use­ful. Politi­cians do at least have the virtue of a mea­sure of ac­count­abil­ity — you can vote against them. Ex­perts may be harder to shift. As Churchill said 70 years ago, “democ­racy is the worst form of gov­ern­ment ex­cept for all the oth­ers”.

In next week’s Econ­omy Watch, we hear from An­drew Webb of Webb Ad­vi­sory

Pres­i­dent John F Kennedy used ex­perts in his White House team

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