The Disregarded Economist, Barriers to Economic Policy Implementation Opinion Piece By: Eric Alberts
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n the United States, citizens have the opportunity to participate in their government and influence policy decisions through voting. It’s not often that you hear someone critique this basic premise of our government. On paper, it is perhaps the best system in the world. But a small addition to my first statement reveals a problem that is not often discussed: in the United States, citizens have the opportunity to influence policy decisions through voting, even if they have absolutely no understanding of the policies about which they are voting. An area where this has become an increasingly prevalent issue is in the world of economics. Economic policy decisions are crucial to battling issues such as the climate crisis. Through economic policy, we can shift incentives and correct market failures by applying costs to the destruction of the environment. There are decades of accumulated knowledge and proof of efficacy of certain environmental-economic policy solutions, yet many of these policies have never come to fruition. It’s like giving a student all the answers to an exam and them still answering questions wrong. A classic example is carbon-pricing
policies. In general, carbon-pricing policies incentivize the development of green energies by putting a price on a firm’s ability to pollute. This idea was first introduced in 1973 by British-born engineer David Gordon Wilson, who proposed a tax on large, polluting firms’ CO2 emissions. Since then, carbon-pricing has moved to the forefront of economic research. In accordance with economic theory and decade’s worth of data from small-scale implementation, economists have essentially reached a consensus on these policies: they are both effective (reduce emissions) and efficient (cost-effective). However, small-scale implementation of these policies is not enough, and international coordination and stronger policies are needed to reach acceptable emissions standards. Carbon-pricing policies, unfortunately, are just one instance of economic academia being ignored on the political stage. So, what exactly is the barrier between economic knowledge and policy implementation? I argue that there are two main factors: economic illiteracy and the political economy. Survey studies show that the majority of the adult population has a basic understanding of
economics, but struggle when it comes to specifics and policy implications. Voters make decisions based on their preconceived notions about what certain economic policies are trying to achieve, which are oftentimes completely misguided. For example, in a 2019 survey conducted by Hunger Free America, over 70% of self-identified Democrats supported increased federal spending on the U.S. food stamp program, SNAP. However, economic research indicates that the most effective policy at reducing hunger is direct cash assistance, or Universal Income. By voting for politicians who support increased spending on SNAP, these voters are unknowingly upholding a program that has proven to be ineffective in comparison to programs in other developed nations. Economically illiterate voters view the problem too simply: food insecurity is a major problem in the United States, so increased spending on the current nutritional assistance program must be a desired policy. The issue is that this is not the best policy; The U.S government has the capability to be much more effective at reducing food insecurity. This example illustrates
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