Ideas for policy wonks

Ideas matter. And to paraphrase Keynes, those who consider themselves exempt from theories and ideas are in fact dictated, perhaps even enslaved, by ideas of one thinker or another, regardless of the quality of the idea, or the obscureness of the thinker.

Yet as Adil Najam of Boston University noted in his recent talk at Pakistan Institute of Development Economics, Pakistanis have a general tendency to look down upon discussion on ideas, often labelling such discussions as intellectual mumbo jumbo, devoid of reality, when in fact, as Adil noted, “theory is not an opposite of action”.

Titled 10 books for policy walas, Adil’s talk was a fun and an important summary of elementary airport reads that both policy wonks and even average readers ought to read. Indeed, more valuable than his insights from those ten books was his compassionate appeal to read: out of every 100 Pakistanis, about only 6 have got 12 years of education, and if they are not using that advantage, then it’s a disservice to their own self and to the society.

Some of the key messages from his talk revolved around humility and doubt, which in turn should also lead to inclusiveness in policymaking. But two key learning notes stand out in particular, in relation to Pakistan’s current state of economic affairs.

While discussing Rachel Carson’s Silent Spring, Adil emphasised on the importance of taking evidence from all the sciences. This is an underappreciated problem in Pakistan.

Pakistan’s policy makers tend to have a macro obsession, relying more on price signals than getting under the hood to fix structural affairs. Which then leads to the question of subject matter specialists, of which there is a clear dearth of. Neither the policymakers nor the country’s independent economists have a visible understanding of the subject-matter expertise. (See BR Research’s Macro obsessions, Dec 3, 2019)

For instance, sans rare exceptions the entire flock of livestock policymakers and policy influencers in the country have a background in veterinary with a focus on treatment, whereas the development of that industry requires both academic and practical understanding of farm practice, animal breed, feed, preventive medicine and so forth.

Even stock market analysts at brokerage houses and asset management companies who are managing investments for their own benefit do not have sufficient understanding of the plant, machinery, equipment and ancillary affairs of the firms they give investment advice for. The universities in the meanwhile are producing a flock of public policy graduates – graduates who want to make or analyse public policy but they do not dive deep to understand real business dynamics, and instead find comfort in box standard grids of tariffs, taxes, ease of doing business.

The second key learning from Adil’s talk stems from his narration of a conversation he once had, as a young economist, with the great Mahbub ul Haq.

Adil recalled how he and his colleagues had questioned some of the methodological aspects of the Human Development Index (HDI) that Haq had created, to which Haq responded by saying something to the effect that the perfection of index methodology is not as important as it is to get the index out just so that countries start competing for good scorecards.

Not surprisingly, Haq was right. The HDI soon caught traction as comparative performance of political leaders of the developing world was put under spotlight, enabling citizens to question their representatives.  And this is the very reason why BR Research has been arguing for the need to have indices and rankings that help compare provinces’ performance in the sectors that lie under their domain. (See also BR Research's Doing business: beyond World Bank rankings, Oct 28, 2019, and Measuring FDI attractiveness, Jan 6, 2020)