Economists' Influence on Public Policy: Market Failures vs. Political Constraints
Economists play a big role in shaping public policies because they use a common method called neo-classical economics. They often focus on balancing efficiency and fairness in society. Some economists believe market failures are the main issue, while others think political failures are just as important. A newer approach called political economics combines these ideas, recognizing the importance of both institutions and the intentions of policymakers. This can lead to more complex and less straightforward policy recommendations. Additionally, there is a discussion on how voters can sometimes make decisions that go against their own interests, which can lead to populism. The paper looks at how these ideas have influenced UK government policies over the years.