4 Apr 2014

Economics vs Politics, what can be done?

Aleks Acimovic writes:*

The combination of economics and politics is often a distant relationship that tries to achieve a middle ground but fails to do so. Economics gives a rational solution about scarce resources that often have empirical knowledge behind them. While politics has representatives (politicians) attempting to achieve an out come for the people they represent (society). Often the politics make promises that are just not realistic when you factor in the economics. For example, the Northern Gateway pipeline currently being proposed in British Columbia is creating controversy between what it is capable of doing and what it will actually do. Right away the NDP and Liberals are throwing their own ideologies around on a project they know little to nothing about. Yet they feel as if they are experts on such a topic. Often these two political groups put their own interests in front of the peoples and have little regard for the facts. I believe that these two forces should come together and try to overcome political tension by appointing an out of province review board of the project that can present unbiased ideas about what is really going on in the pipeline market. By doing so, both political parties will look competent in societies eyes. Those Does anyone on this blog have any ideas on how these two separate institutions can come together to strive to a single goal for the greater good of society?

Bottom Line: Bringing in a Third Party that is creditable will help society from a different perspective on projects.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.


Hranislav Djoric said...

I'm afraid that a third party will actually back fire in this situation. As you said previously, the parties work in their own interests that sometimes do not take into consideration the people's interests. I understand you suggest a third unbiased party to look into the actual details of the project (or projects), but won't the same thing eventually happen where the third party will have enough information to now form a bias opinion. And at this point, the third party goes on to work on their own interests on the subject.

I'm afraid the real way to deal with this is through better communication between economists and politicians. Politicians, as you said, rarely consider the economics of decision making. And if that is the case, then economists need to be even closer to politics then they obviously are now. If this can be achieved, perhaps politicians may stop worrying so much about popularity in the eyes of the masses and do things that actually benefit the masses (especially since we know that most of the public is rather ignorant on topics of this type... Never having all the information). This way the economics of each project/policy/proposal is taken into account, and if the masses are shown the benefits, then the politicians will keep their popularity. Perhaps there is a way to fix the problem you previously pointed out through methods like this?

Anonymous said...

It would seem rational for the parties to reject any review board. If you think about it from a political perspective, if the board is successful, an opposing party could assign the success to the review board come election time. But if the review board is unsuccessful, an opposing party could assign blame on those that ultimately made the choice, i.e. the NDP/liberals. Plus if the review board were to be successful, it might risk future control by the party system, which would reduce the role and power of the political office. in any case it seems to be a lose-lose scenario for a political party.

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