THE PERFECT POLICY ADVISOR IN AN

IMPERFECT WORLD

by
Dr. Ohan Balian
2009

1
 Table of Contents

I. Major differences
II. A portrait of the perfect advisor
III. Policy arguments and best
practices
VI. Dissemination strategy
V. Key strengths and weaknesses

2
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Guidelines for the enhancement of research
use

Conditions under which research could be useful

 Research dealing with critical decisions (e.g.
forecasting techniques in predicting rates of
growth)
 Strong competitive pressures
 Techniques providing accurate signaling functions
 High accountability of the government agency
 Income distribution issues

3
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Guidelines for the enhancement of research
use

Recommendations to bridge gap between

research and policy making
 Learn about the history of the issue
 Target recommendations to groups that are
responsible for decision making
 Present recommendations at the right time i.e.
when they are most likely to receive attention.
Generally, best to get into the debate early
before positions harden
 Learn everyone's interests and arguments
 Think like an economist but don’t write like one
 Keep it simple by using simple examples 4
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Guidelines for the enhancement of research
use

Recommendations to bridge gap between research

and policy making (contd…)
 Explain which group will be affected by your
recommendations instead of talking about
“welfare losses or gains”
 Take implementation and administration into
account. Don’t propose solutions that are too
optimal but too complex or costly to administer
 Emphasize a few crucial and striking numbers.
Use numbers to decide the number of people
affected (say 30% of the population) rather than
aggregate monetary values 5
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Guidelines for the enhancement of research
use

Recommendations to bridge gap between research

and policy making (contd…)
 Try to get access to the same sources of general
information as the policy maker such as
newspapers, internet sources, etc. since these
sources of information influence their decisions
 Be economical with the use of economics! Apply
economic analysis only to problems where it is
relevant
 Discount for political demand – i.e. sometimes the
optimum solution is not feasible for political
reasons – use second best solutions
 Dare to be quick and dirty! i.e. some analysis is
better than none even if its done at the “back of 6
the envelope”
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Differences in the logic of policy makers and
policy analysts

Differences in objectives
 Policy makers focus on distributional factors
(i.e. winners and losers) whereas
economists focus on efficiency issues
 Policy makers define goals in quantitative
terms (e.g. reducing traffic congestion by
20%). Economists define goals in financial
terms (e.g. investing in infrastructure with
marginal cost/revenue concepts)

7
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Differences in logic of policy makers and
analysts

Differences in measuring achievement of

objectives
 Policy makers look at the number of people
affected rather than financial costs and benefits
 Policy makers also assess performance in terms
of inputs rather than outputs – e.g. number of
new hospital beds rather than improvements in
health quality
 Policy makers weigh losses more heavily than
gains. A policy that helps 500 people and hurts
500 people is NOT neutral - It produces 500
enemies!
8
• MAJOR DIFFERENCES BETWEEN POLICY
MAKERS AND ADVISORS
Differences in logic of policy makers and
analysts

Differences in decision making criteria and means

of influence
 Policy makers use sunk costs to justify further investments
since this reflects the amount of credibility of the policy
makers, and the expectations of the project
 Policy analysts use opportunity costs by looking at
alternative uses of funds
 The issue of compensation is critical for policy makers. They
must ensure that losers will be compensated (with
mechanisms in place to do so), whereas for economists its
more of an afterthought
 Policy makers favor rules and regulations mainly because
(normally) they have backgrounds in law (especially in the
US); they try to affect policy through prohibitions and by
redefining rights and duties. Economists tend to emphasize
economic incentives, specifically by manipulating
incentives
9
II. A PORTRAIT OF THE PEREFECT ADVISOR

1. Clarity in reasoning and presentation

 Economics is becoming increasingly
technical with concepts like consumer
surplus, deadweight losses, and
substitution effects
 Economists have to compete with other
disciplines and analytical tools
 Not enough to be able to speak clearly and
rapidly. The policy advisor must also be
politically correct
 Need to develop a very good sense of
psychology and strategy

10
II. A PORTRAIT OF THE PEREFECT ADVISOR

2. Recognition of the policy maker’s need for

solutions
 Policy makers realize that economics is a
complex subject
 However, they must be presented with a
clear description of the stakes and risks
that they face
 They will accept these risks only if they
understand the reasoning behind the use
of a specific policy
 In other words, the policy maker must
understand that a problem can have
different solutions depending on how
consumers and investors behave
(expectations), multiplier effects, etc…

11
II. A PORTRAIT OF THE PEREFECT ADVISOR

3. Honesty
 Give advice – not advocate!
 Even though an adviser might have his
or her own view, he must be faithful to
his discipline by providing unbiased
evaluations
 Must be able to admit ignorance and
mistakes
 Must be able to recognize controversies
 Be a good salesman, not a ‘snake-oil’
salesman
 Policy makers (politicians) can easily
detect who is honest because very often
they are not!
12
II. A PORTRAIT OF THE PEREFECT ADVISOR

4. Recognition of the limits of economics

 Recognize that the policy
maker may be anti-economics
 Economics deals with efficiency
issues whereas public opinion
requires equity/fairness issues
 I guess this is why this slide is
limited!

13
II. A PORTRAIT OF THE PEREFECT ADVISOR

5. Competence
 Be comprehensive and competent although
evidence that not much beyond pricilpes101
textbook is needed for policy advice
 The perfect policy adviser must also know what is
not in the textbooks:
 what are the current controversies
 which previously popular ideas have been
rejected?
 which ideas are currently in fashion?
 whom to ask to obtain the latest information?
(think-tanks, researchers, advocacy groups)
 In sum, the closer is the advisor to frontline
research, the more he/she is comfortable with the
above

14
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)

 Rule 1: Forget about trying to convert

your adversary
Unless debate is highly intellectual,
very difficult to change one’s stand. In the
rare occasion when it happens, the change
of position has occurred not because of
highly powerful arguments on your part,
but because your opponent has changed
his/her position because of a “shocking
revelation”. Only then you can use your
arguments to reinforce the defection.
15
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)

 Rule 2: Pay great attention to the agenda

of the debate
He who defines the issue and sets the
priorities is well ahead of the argument.
For example, is the global war on
terrorism the result of globalization or
US aggression in the face of 9/11?
Always try to set the agenda of the
debate based on what's happening
around you using your intuition. 16
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 3: Preach to the converted
To strengthen the commitment of
those on your side. This will bind
them more securely to the policy
and make them more effective
spokespersons. Never give the
opportunity for your policy/cause to
be misrepresented by a weak
spokesperson.
17
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 4: Never forget the uncommitted
The vast majority (the silent majority)
usually form the bulk of those affected
by a certain policy. Remember, the
ultimate objective is to achieve public
support of a specific policy through
influencing public support. What works
best with opponents such as originality
and ridicule does not work with the
uncommitted who are likely to be
impressed by good sense, decency, and
fairness.
18
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 5: Be aware that you are addressing
multiple audiences
You need to decide whether you want
to make a broad appeal or target a
specific group. Either decision (or even
some balance) may be correct depending
on circumstances. Policy makers
understand this and this is why their
statements are usually vague. Intellectuals
(or economists!) on the other hand regard
all who are not intellectuals as
unimportant and this can make your
‘victory’ very costly.
19
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 6: Be prepared to go around the
block many times
When there is a good point to
make, keep repeating it. Again,
intellectuals are afraid that
repetition can make them boring in
the eyes of their peers. Success in
ideology is a matter of power and
will.
20
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 7: Shave with Occam’s razor!
Know what you can afford to
sacrifice! For example, if you wish
to argue that the US is the most
democratic society, there is no
need to also deny that it is also the
most violent. In other words, don’t
waste time and effort on trivial
issues. Concentrate on what is
essential to your case.
21
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 8: Be careful in your use of examples
and historical analogies
Don't distract with too many
illustrative examples and historical
events. Your audience may
concentrate on the factual content of
the particular example you’re
illustrating and will ignore the
original point you were trying to
make. Analogies are very useful but
use them sparingly.
22
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 9: Avoid trading in motives as an
alternative to rebutting the opposing case

Always try to answer the arguments of

the opposing view irrespective of whether
his motives are good or bad because
motives are irrelevant to the soundness of
an argument. Discuss motives only at the
end (and not in the beginning) when facts
have been established and weaknesses
exposed.

23
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 10: Emulate the iceberg
Know more than what is
required to know about a specific
issue. This is important because
you will not know exactly what to
use on any given occasion.
Moreover, the fact that you have
good knowledge on an issue will
give authority to what you say.
24
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 11: Know your opposition
“He who only knows of his own
position knows little of that.” –
John Stuart Mill. Understand the
opposing view in its strongest
because unless you have
rebutted it at its strongest, you
have not rebutted it at all.
25
III. POLICY ARGUMENTS AND BEST
PRACTICES
Rules of thumb on how to win policy arguments
and influence debate (12 rules)
 Rule 12: Make sure that the position you
are defending is politically and morally
defendable

Being on the side of the

good and the true does not
guarantee success but,
ceteris paribus, it certainly
helps.
26
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Understanding the policy makers perspective

 Understand the policy maker’s objectives and
then cast your advice in a way that could achieve
these objectives
 But understanding the policy maker’s perspective
is not easy because of poor access to them.
Therefore, discuss his perspective with his direct
staff
 Policy issues come haphazardly. The major
concern for policy makers is to act first and think
later
 Generally, good economic advice is about
convincing others that short-term responses are 27
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Understanding the policy makers perspective

(contd…)
 Be aware that the policy making process is a
‘non-linear’ process of decision making where the
influence of evidence-based information is heavily
dependant on its perceived relevance to political
debate and public opinion
 The policy making process involves policy makers
considering independent information from their
departments/advisors, and judgments about
attitudes and political considerations
 A known fact of the policy making process is that
it’s a non-linear dynamic process where positions
change as a result of new information or because
of changes in personnel. 28
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Be solution oriented
 Provide the advice in a ‘solution-solving
manner’. i.e. “Your problem is due to A, B,
C. Here are 3 things – X, Y, Z, that you can
do.
 Provide clear costs and benefits of a
solution
 Come up with policy implications –i.e.
recommendations

29
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Be practical and pragmatic

 Compromise and be flexible (understand the
politics of the situation)
 Do not be discouraged if your advice is
regarded as the 2nd, 3rd or 27th best advice.
Still put forward your best solution

30
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Time your advice correctly

 Do it early, before positions harden
 Preliminary results of your findings are more
likely to have an impact than more concrete
results
 Remember that striving for policy change is a
long-term process

31
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Build credibility
 From the horse’s mouth!
 If policy makers know that you
don’t play underhanded games,
they will respect your advice
 Accuracy is more important than
originality

32
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of strategy

Never tell your target audience that they're

wrong!
 Policy makers don’t like to change
their positions on an issue
especially if they have publicly
expressed it
 The danger of not telling they're
wrong is that ‘bad’ policies would
not receive the criticism they
deserve

33
III. POLICY ARGUMENTS AND BEST
PRACTICES
Best practices for effectively communicating
economics to policy makers (strategy and style)

Matters of style
 Work on your general communications skill

 Be clear and brief

– Do not use jargon. Be comprehensive to economists and
non-economists alike
 Quantify the impacts of various positions
– Have data/evidence to back what you say your proposal
will achieve
 Relate your recommendations to the
government’s stated objective
– Policy makers tend to base their current decisions on
their past decisions. Know what were these past
decisions/solutions.
34
IV. DISSEMINATION STRATEGY
One-on-one

Meeting policy makers

 Adopt proactive strategy
 Identify and understand key opinion
leaders
 Identify and understand key civil
servants
 Monitor legislative and policy trends
 Inform them of your issues
 Brief your organization/institute on
emerging issues
35
IV. DISSEMINATION STRATEGY
One-on-one

Preparation
 Prepare an agenda
 Circulate highlighted papers in
advance
 Invite the right people
 Prepare meeting room and
equipment
 Clarify roles of chairperson,
secretary and participants

36
IV. DISSEMINATION STRATEGY
One-on-one

During meeting
 Get information
 Give information
 Establish policy information
needs
 Ask what, when, where, how,
and who
 Ask ‘why’ very diplomatically
 Be punctual
37
IV. DISSEMINATION STRATEGY
Policy Memoranda

Purpose and Format

 Inform policy makers
 What do I do next?
 Simple language
 Easy to read

38
IV. DISSEMINATION STRATEGY
Policy Memoranda

Content
 Identify key policy problems
 Discuss why a solution is needed
 Show consequences of inaction
 Identify key policy problems
 Discuss why a solution is needed
 Show consequences of inaction
 Explain research objectives
 Data type and data source
 Methodology
 Results
 Policy options and their consequences
 End where you started
39
IV. DISSEMINATION STRATEGY
Policy Briefs
 Focused
 Professional, not academic
 Evidence-based
 Limited
 Succinct
 Understandable
 Accessible
 Promotional
 Practical and feasible

40
V. KEY STRENGTHS AND WEAKNESSES
OF ECONOMICS IN THE POLICY
DOMAIN

Weaknesses
 Too isolated from other disciplines
 Too academic rather than pragmatic
 Often one-dimensional
 Liberal foundations are taken for granted
 Narrow proposed economic reforms
 Efficiency is at center stage
 Economics is perceived as self-evident in itself
 Tendency to under-emphasize non-quantitative
information

41
V. KEY STRENGTHS AND WEAKNESSES
OF ECONOMICS IN THE POLICY
DOMAIN

Strengths
 Provision of rigor that other disciplines lack
 Robust, testable, and comprehensive analytical
framework
 Logical applications of basic intuitive concepts
 Ability to integrate information from a range of
disciplines
 A sound and consistent theoretical framework
 Quantifying tradeoffs in a systematic way
 Very strong in the analysis of uncertainty
compared to other disciplines.

42