Dysfunctions in economic policymaking: simple stories, complex systems and corrupted economics
This essay is focused on ways in which complexity in economic systems is addressed in policymaking and in particular on the over-simplifications that frequently occur in assessments. In doing so it touches on a range of matters that are relevant to the central concern. These include the monopolistic nature of public decision making and the limitations that this entails, the tendency for private interests to achieve undue influence in the use of this market power, the induced subservience of economic reasoning to these interests (corrupted economics), and the institutional disorder that can be created as a result.
It is organised around three questions: Are there reasons to expect a systematic policymaking bias against giving due consideration to complexities and uncertainties in the evolution of economic systems? Does any such systematic bias matter much? If it does matter, can anything be done to improve policymaking performance?