Leading economists agree with the theory that the Brexit vote showed a disconnect between their discipline and the public, with a sizeable minority also backing the idea of “institutional change” for the profession.
The latest edition of the Centre for Macroeconomics’ monthly survey says that the referendum result “has prompted much soul-searching in the economics profession, which was nearly unanimous in anticipating negative economic consequences from a vote for Brexit”.
The CFM is a research centre that bills itself as bringing together “a group of world class experts to carry out pioneering research on the global economic crisis and help design policies to alleviate it”. It is chaired by Nobel prizewinner Sir Christopher Pissarides, Regius professor of economics at the London School of Economics, and its co-directors are Wouter Den Haan, professor of economics at the LSE, and Morten O. Ravn, professor of economics at University College London.
The CFM survey of a panel of prominent UK-based economists posed the question of whether “the economics profession needs an institutional change that promotes the ability to communicate more effectively with policymakers and the public at large and to make clear when economists have a united view?”
Of 41 panellists to answer the question, 44 per cent agreed or strongly agreed, while 49 per cent disagreed or strongly disagreed.
But the CFM survey analysis says that the results are still “remarkable” even though “opinions seem to be split”.
Comments in the survey show that many panel members who do not think institutional change is needed “still point out that there are problems in the relationship of the academic macroeconomic community with policymakers and the public at large”, the analysis says.
And it adds that it is also telling that “almost half of the panel members think that the problems are serious enough to consider a substantial change in how the profession is organised”.
The CFM analysis says that there is “the possibility that the issue is not (just) about communication. There is the possibility that economists are simply not in touch with the problems that UK citizens typically face.”
Panellists were presented with the statement: “Voters think that the preferences of economists do not align with their own preferences. (This includes the possibility that they thought that the predicted negative economic consequences would not affect them personally).”
They were then asked: “Do you agree this was an important reason for a majority of UK voters going against the near unanimous advice of the economics profession?”
Sixty-one per cent of panellists strongly agreed or agreed.
The CFM analysis concludes that one possible solution to make economics research more relevant “would be to form a non-partisan committee with a wide set of representatives who might outline research questions thought to be important. Universities could then highlight how effective they are in making progress on these issues.”
It adds: “As an additional incentive, government funding as determined, for example, by the Research Excellence Framework (REF) outcome could be made dependent in part on how successful universities are in doing research related to these priorities.”