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What economists should know about public policymaking?


  • Philip Arestis
  • Yiannis Kitromilides


Economists maintain that the study of public policymaking falls outside the scope of their discipline. How and why public policies are made should be studied by political science. Policy debates in economics take place within a generally agreed framework referred to in the paper as the 'optimisation paradigm'. There are two central assumptions: 1) there is a 'technocratic' relationship between economists and policymakers based on a separation of functions: policymakers provide the objectives of policy and economists the best instruments of policy; 2) public policymaking is and ought to be 'rational'. A detailed examination of both assumptions reveals that the optimisation paradigm has serious shortcomings. This conclusion is reinforced by the accounts of many economists who have had active involvement in public policymaking. The economist's policy paradigm is in need of revision, which will inevitably require a collective effort. We recommend a return to the 'political economy' approach in which economists will participate in policymaking as 'positive political economists' rather than technical experts 'divorced' from politics.

Suggested Citation

  • Philip Arestis & Yiannis Kitromilides, 2010. "What economists should know about public policymaking?," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 6(1/2), pages 136-153.
  • Handle: RePEc:ids:ijpubp:v:6:y:2010:i:1/2:p:136-153

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    References listed on IDEAS

    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, July.
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    3. Onaran, Özlem & Stockhammer, Engelbert, 2006. "The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis," Department of Economics Working Paper Series 1450, WU Vienna University of Economics and Business.
    4. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," Review of Economic Studies, Oxford University Press, vol. 9(1), pages 58-73.
    5. Peter Egger & Mario Larch & Michael Pfaffermayr, 2007. "Bilateral versus Multilateral Trade and Investment Liberalisation," The World Economy, Wiley Blackwell, vol. 30(4), pages 567-596, April.
    6. Egger, Peter & Larch, Mario & Pfaffermayr, Michael, 2007. "On the welfare effects of trade and investment liberalization," European Economic Review, Elsevier, vol. 51(3), pages 669-694, April.
    7. Adrian Wood, 2002. "Globalization and wage inequalities: A synthesis of three theories," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 54-82, March.
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