A few months ago, I wrote a post on the role of “experts”, responding to a British journalist and author’s lament for the apparent willlingness of voters/societies to downplay, or even dismiss, the role of experts when it comes to making significant public policy decisions.

In his column in yesterday’s Sunday Star-Times, local economist Shamubeel Eaqub returns to the theme.

Experts are increasingly side-lined. Political leaders openly ridicule them and the public emphatically ignore their advice when voting.

Our public servants at Treasury must have identified – “yes, someone feels our pain” – even unusually taking to Twitter over the weekend to draw attention to Eaqub’s column.

I’m not sure when this golden age was, when “experts” apparently held sway with voters. I can’t think of a time in New Zealand, or British, history and although I know the modern electoral history of other Anglo countries less well (and those of continential European countries hardly at all) I struggle to think of examples in those countries either.

One can’t help thinking that Eaqub’s complaint –  and that of various other writers abroad who run similar lines –  is mostly that the voters, and politicians. aren’t endorsing the particular expert opinion favoured by Mr Eaqub.  I can understand that: I’d prefer my “expert” opinions on various matters were taken up and embraced by the voters and politicians.   But if they aren’t, it tells one nothing obvious about the failure of the system.  Housing, for example, is one of those topics on which both Eaqub and I have written on and thought about –  even if perhaps neither of us would count as high-level experts.  But we reach quite different conclusions on what bits of policy should be tweaked to solve the problem.  If I understand him correctly, he would emphasise tax reform, state-house building and no doubt some freeing up of urban density restrictions.  I’d emphasise freeing up land use restrictions (while protecting the rights of individual residents/owners to act collectively to protect their interests), and a marked cut in the target level of non-citizen immigration.  The Productivity Commission, a body with some claims to expertise in the area, goes as far as to favour allowing government agencies to seize private property, as one means of assisting.  Ongoing research and analysis can, and should, shed some light on the implications of each of these options.  In some cases, such research might even suggest that a particular option was unlikely to achieve the desired end, but the really hard choices aren’t likely to be resolved in battles of the experts.  They are often more about the sort of society/polity different groups want – including the respective roles/powers of the collective and the individual.  Perhaps theologians and philosophers might be some help there.  Economists aren’t likely to offer much.

Eaqub falls back quite quickly on the Brexit example.

In the UK, expert consensus was that Brexit would be bad for the economy. They signed open letters and argued their case in media. Well-known experts like Bank of England governor Mark Carney, warned of the costs of Brexit.

Less of a servant of government, rather more of a prince – but even he could not convince the voters.

I’m not sure that the Governor of the Bank of England, a Canadian banker temporarily employed by the British government (and by a Chancellor who was one of the leading figures in the Remain cause), particularly counts as a disinterested expert on the interests of the British people.  But lets grant that most economists, even those close to the specific technical issues, thought that Brexit would come at some economic cost (lower future GDP per capita) to Britons.    Those views weren’t kept secret, and they weren’t only expressed in abstruse language.  And a small majority of British voters nonetheless favoured Brexit.

When the Australian federation was being devised in the 1890s, there was a real possibility that New Zealand could have joined –  after all, at the time, New Zealand was just one among the various British colonies of Australasia.   At the time, the average New Zealander had much more in common with the average citizen of New South Wales or Victoria than, say, the average Briton today has in common with the average Italian or Pole (almost whatever measure of homogenity/heterogeneity one wants to use).    And yet economists at the time could quite easily have pointed to the potential economic costs to New Zealand from staying out of the federation –  including facing external tariffs on exports to Australia rather than being part of the free trade area, and loss of potential economies of scale in central government functions.  Those seem like quite plausible arguments, and yet our ancestors chose to take their own path, and not join the federation.   Perhaps even today we are poorer as a result, but I suspect most New Zealanders don’t regret the choice.  If economists today were to, as I’m sure they could, produce model results suggesting that New Zealanders would be perhaps 5 per cent better off by joining Australia, I’d be surprised if that result shifted public opinion much –  not because people despised expert economists, but because other things matter more to them in the choice to be independent.

But Eaqub does have an interesting take on the issue, in that he appears to think that much of “the problem” is with how experts –  and especially expert economists –  communicate.

They often focused on very specific issues that could only interest other experts.

Worse, a lot of their writing was in expensive journals, accessed and read mainly by other experts. Academics’ performance is often linked to their volume of publications in expert journals – it’s a self-reinforcing isolation cycle. The writing is often in obtuse and highly technical language, designed to exclude non-experts.

Except for a handful, most academics are invisible in public life.

The absence of academic economists in public life has been filled by bank economists. Their brand of simplistic and high noise commentary on the to-ing and fro-ing of the economy, is the public understanding of economists. Rather than the more complex social and political aspects that relate to economics.

I have some sympathy, and probably many people do.   Whether it is the PBRF here, or similar mechanisms abroad,  the incentives seem to be to publish as many papers as possible, cited as often as possible, in technical journals –  however small the potential advance of knowledge might be.    Those reforms were well-motivated –  most reforms are – and probably did deal effectively with people like one Victoria University academic I recall from student days, who wasn’t much of a teacher and didn’t seem to have published anything in 20 years.  But they have had undesirable consequences.  I recall being on the organising committe a few years ago for a well-resourced conference The Treasury and the Reserve Bank were promoting, looking for authoritative insights on New Zealand’s long-term economic underperformance and threats to its macroeconomic stability.  We were commissioning papers, and offering a reasonable amount of money to potential authors.  We ended up with some pretty good foreign authors, but didn’t get a single substantive submission/proposal from a New Zealand based academic –  apparently, in part because for papers on some of these intractable issues, we couldn’t guarantee subsequent journal publication.

I think it is a shame that we don’t, at present, have much contribution to New Zealand public debate from academic economists –  although I’m less sure it is true of other disciplines (for good or ill, think of public health, climate change or child poverty).   There have been times in the past when it was different, but it isn’t clear that public policy –  or the interests of voters in deferring to “experts”  –  was much better/different then than now.

One of Eaqub’s other concerns is what “experts don’t take account of”

Experts’ increasing irrelevance has much to do with their tendency towards insularism. Their awful communication – they talk to each other in anachronistic and technical language – excludes a large majority of society.

Their theoretical models exclude obviously real-life things like politics.

In some areas no doubt, but his sweeping dismissal seems far too broad –   and gives no weight to the importance of trying to make issues tractable.  And economists have developed whole literatures around notions of “government failure” and difficulties people (including voters) have in getting those who notionally work for them to pursue the interests of the principal.  Our Reserve Bank Act is just one example of legislation influenced by a recognition that neither officials, politicians, or voters are saints or angels.    We have models like the Open Bank Resolution arrangements explicitly because expert advisers recognised the politicial incentives governments typically face in the midst of crises.

Towards the end of his column, Eaqub argues that

We have to understand that the role of the economist and expert is as a citizen and advocate for our society. Not simply as hired guns to advise political leaders or as technocratic rulers.

But I’m struggling to know what he means, or  at least how realistic his aspiration is.  I’m sure that all the so-called experts have the best interests of their country –  or perhaps the wider world –  at heart.  But they also approach issues with their own predispositions and background, typically have to feed themselves and their families, and have their own career interests to look to.   Who funds “experts” –  and especially in a small country?  Mostly, the public sector.  Who provides fora and venues within which expert voices, talking expertly, are heard?  Mostly the public sector.  Even in a US context –  with a rich hinterland of well-endowed universites and think-tanks –  I’ve read arguments previously about how much easier, and well-rewarded, it is likely to be to be producing research on monetary issues that is well-received at the Federal Reserve (with its huge body of researchers and network of conferences etc) than to step outside that mainstream.  It isn’t impossible to take an alternative view, and produce alternative results, but it results in a skew towards work supporting the interests and priors of powerful state agencies and their managers.  The process becomes self-selecting over time –  those disinclined to produce results supportive of the interests of the incumbents tend over time to go and do something else with their lives.  On policy issues,  (as distinct perhaps from a expert plumber, or expert oncologist) so-called “experts” –  all too often, even then expert on very narrow points –  are not, as a group, some disinterested group that citizens can, or should, rely on for guidance.

In a US context, for example, it is well-recognised that there is a massive imbalance among academics –  less so in economics than many other disciplines –  in favour of Democrats.  I’m not sure if there are comparable data in New Zealand, but it would be surprising if the picture were so very different.  We shouldn’t suppose that people’s political preferences, and the instinctive preferences that lead them one way rather than another, don’t also shape the sorts of issues they research, they questions they ask in framing that research, and even how they interpret and frame their results.

I’m not suggesting anything corrupt or inappropriate at an individual level, simply highlighting some of the ways in which the rise of big government-   often championed by technocrats and related “experts” – can become self-reinforcing over time.  All too often one technical problems begets proposals for yet more technical, intrusive, solutions –  doing so feeding the inclinations of the academic “experts” and the bureaucratic administrators.  If the public ever become suspicious, and unconvinced that the bureaucratic solutions are well- aligned with their own interests, there is little reason why they should be inclined to defer to the preferences of the same “experts” who helped devise what no longer satisfies them.


27 thoughts on “Experts

    • It has been almost 4 years since the Auckland Unitary Plan was first notified in 2013. The last hurdle hopefully was when the the High Court threw out the Auckland 2040 and the Character society legal objections to the undemocratic manner in which the Independent Hearings Committee tossed out the single density of 29,000 properties as Auckland Council expert Planners pandering to the whim of grey power.

      However the Independent Hearings Committee left in place the volcanic sensitive zones of 57 sacred volcanoes under a new term called the Viewshaft. This is a visual height limit that limits heights in most of central Auckland where height and density is most required.

      Because of this prohibitive visual height limit on most of central Auckland , the metropolitan city concept was introduced that made Manukau, Albany, New Lynn, Sylvia Park as 18 level high rise dispersing high rise into what would normally be fringe cities where cheaper housing is traditionally built in most other normal concentric cities around the world. Most cities have a high density high rise central core where the land is the most expensive.

      Auckland has dispersed its high rise centric core into its fringe thereby creating a equally expensive Auckland from central to fringe.


  1. Michael
    Over the last few years Ive read a number of fascinating and accessible books about behavioral economics. At present I’m partway through Richard Thaler’s “Misbehaving: The Making of Behavioral Economics”.
    I’d recommend it to anyone who thinks that economists are smarter than the average politician or even voter. It’s a history of how behavioral economics confronted the “perfect world” economics that had grown up in the latter half of the 20th century.
    But the Efficient Markets Theory has survived Black Monday, Tech Wreck, GFC, and the behavioral assault … For instance, the EMT is still a foundation stone of the NZ Commerce Commission’s regulation of natural monopolies.
    In other words, I think the points you make about Shamubeel’s preference for experts over politicians are valid.
    But I don’t think the real issue is “expert V politician”. The real issue is creating a public debate which is actually informing for the public. You note the different solutions for high house prices offered by yourself, Shamubeel and the PC. Personally I think they are all valid, but any solution requires public support, which requires public education via an accessible debate.

    Liked by 1 person

    • Thanks Tim. I largely agree. Experts – economists or other – are often helpful on quite narrow technical points. But even that largely relies on drawing on an established and accepted base of knowledge. Once one gets beyond that base, differing experts will have often quite different perspectives – and that is a particular problem with economics. And economic experts are really no use at all on the issues of how society wants to run itself, and what its priorities are or should be.

      Re housing, of course one can also argue that one lot of experts got us into the mess in the first place.

      Liked by 1 person

      • To be fair to Auckland council planners, someone decided to put in place initially volcanic sensitivity and now a viewshaft height limit on 57 sacred mounts. There was a time when these mounts would have been levelled for construction materials. 3 kings quarry would not be allowed today as it carved out and levelled and dug a huge crater from what was likely a Maori Pa sitting on top.

        It is these precious mounts that prevent building a cheaper city and the preservation of the mounts also has resulted very costly infrastructure spending. We have put our high rise and high density 30 to 40 km away. Intercitycity rail is going to cost $20 billion plus plus and not the laughable $10 billion that Len Brown says that intercity rail would cost. The first estimates from Britomart to Mt Eden of $2billion by Len Brown is now looking actually more like $3 to $5 billion and Mt Eden is still within a 30 minute walking distance away.


  2. I wish to clarify that the tweeting of this article should not be interpreted as the Treasury taking issue with how our work is perceived by the public or any other audience. That never entered our thinking and was not a factor at all.

    We linked to the article solely because it stimulates an interesting discussion about the scope of economics and about economists’ communications and engagement. This comment from the article is a good example:

    “Critically, economists (particularly academics) need to reassert their presence in society as citizens. They should openly engage in debate with other economists, but not exclude the subject of their debate: society.”

    Bryan McDaniel
    Principal Communications Advisor
    The Treasury


    • Thanks for the response Bryan.

      For those who hadn’t read Eaqub’s whole article, here was his comment on the Treasury’s recent LTFS, and the former PM’s reaction to it.

      Economists are increasingly side-lined. Our Prime Minister ridiculed The Treasury’s ability to forecast what will happen next week, let alone in thirty years’ time.
      This followed the release of long term projections to understand what would happen if we didn’t change our policy settings. An ageing population would bankrupt us because of rising costs of healthcare, superannuation and falling revenues from fewer young workers. Unless we change policies now and get on top of the situation now.
      As a servant of government, The Treasury could not effectively negate the criticism. As a servant, government economists are less ineffective in their ability to openly argue their case and the many uncertainties inevitably involved in something as complex as thinking about long term scenarios.


    • Bryan, not taking issue is one thing. I hope taking notice is the other. It seems Treasury does not take issue nor take notice that perhaps they need more accuracy?


  3. Nice article Michael.

    Coming from a different field of medicine, we have an attitude to expert opinion. Expert opinion is better than anecdotes and non-informed opinion. But through experience, numerous expert opinions has been disproved or found to be dangerous in the past, when compared to well conducted clinical trials.
    In economics, there is a lack of humility, on the state of current knowledge and the ability to predict the future. Economist have a dismal tract record of predicting the stockmarket and economy. They like most of us, predict the future by looking through the rear-vision mirror.
    Expert opinions is exactly that opinions and not facts. Unfortunately, through ego driven self-importance there is often a deliberate blurring of the lines by many in the profession. There is lack of emphasis on the boundaries of our knowledge and the assumptions made.


    • Interesting perspective David. One useful thing (for their reputation) that economists could do is abandon forecasting.

      Sadly, at least for the big picture issues on which many economists (me included) opine, the option of “well-conducted clinical trials” doesn’t exist.


      • You are right clinical trial don’t exist in economics, that’s is why it is often called the ‘dismal science’.
        Not to fault economist too much as a profession, but there is a human need for certainty. Note the Winston Churchill quote, ‘give me an one-handed economist’.
        The media is often polemic these days, through the emphasis on advocacy journalism. It promotes those more of a trenchant mindset with good sound-bites and also omitts discussions of uncertainties and nuance.


      • Increasingly Board of Directors and as a consequence, Accountants in Australia are now being asked to place Climate Change forecasts into their business forecast modelling or face personal liability for the failure to forecast the effect of climate change on their businesses.

        Why should economists be allowed to get away with poor and totally inept forecasting?


      • Because no one can forecast the future (economics anyway). Economic forecasting is rarely more useful than being simply a scenario – numbers people can drop into planning spreadsheets, rather than shedding much light on what might actually happen.


      • The future is always uncertain but that’s no excuse not to forecast. That’s why when you are forecasting, the underlying assumptions need to be clearly written so that the reader can assess and critique those assumptions which usually leads to better and more accurate forecasts.


      • I agree that laying out assumptions and then outlining the implications of those assumptions can be useful.

        But if I toss a fair coin, I have no information that enables me to offer any meaningful forecast about the outcome of the next toss. Most meaningful economic forecasting can’t materially beat that standard, and not for the want of trying.

        Of course, statements about plausible ranges of possible outcomes are more feasible and, therefore, probably more useful.


  4. Your comment about government funding affecting the type and results of research being done reminds me a bit of the situation some years ago in Norway (I don’t know how much it has changed since the change in government). The previous left leaning government in Norway had an agenda to push, namely that men and women are equal and should be equally represented in all professions, and equally paid. As a result they were funding research by Norwegian academics to prove that men and women thought the same way and that the difference between men and women was solely in the physical body, not in the mind. This research ran contrary to research done by leading international academics that showed men and women think differently. There is a really good documentary about this on youtube (with subtitles) .


  5. I like this point you make, Michael:

    “…the really hard choices aren’t likely to be resolved in battles of the experts.”

    So many of our environmental disputes turn to this type of battle – and indeed such expert evidence is weighted highly by the Environment Court. Much of that evidence is an attempt to forecast/predict/quantify the future effects of a particular proposal. For example, we (society) spend enormous amounts of money and time arguing ‘the science’ of freshwater management – whilst in many catchments current and on-going degradation is not disputed. The underlying dispute is not so much about water quality, but about private property v public good rights – an ethics/values based consideration – nothing to do with science.

    David’s point about a lack of humility with respect to prediction/modelling is a good one – Shelia Jasanoff refers to predictive sciences as ‘technologies of hubris’ and that we need to move toward greater demonstration of humility wrt our ability to predict futures. Another academic author, Daniel Sarawitz, coined the phrase: ‘an excess of objectivity’ – suggesting that for any given values-based position in a policy/social choice (i.e., decision) being made, that most positions can be supported with robust science of the ‘right’ kind – depending on the assumptions made, the type of data collected, and the application of that data within a particular modeled framework. He notes that this is not a failure of science, but rather a reality of dealing with very complex systems.

    I’d like to see a move from a “battle of the experts” to a “battle of the philosophers” – that being a greater fundamental understanding of the philosophy of ethics and hence an ability for us all to be able to view our different problems from the three main ethical perspectives (teleology, deontology and virtue ethics) – as in many cases, our actions arising from those deliberations might be quite different, and perhaps the problems might become less intractable than they presently are.

    Liked by 1 person

  6. 5:47 PM Saturday Jul 14, 2012
    Shamubeel Eaqub says he tells his friends not to waste their money buying houses. “But they don’t listen to me.”

    The 31-year-old economist at the New Zealand Institute of Economic Research is a dedicated renter and has never wanted to buy his own house.

    “Houses are very expensive compared to renting.”

    This statement always comes to mind whenever someone mentions Shamubeel Eacub. Costly advice for those that paid attention to his expert rantings. Maybe a class action suit should be considered by those that actually paid attention.


    • 5:30 AM Tuesday Nov 6, 2012
      Shamubeel Eaqub of the NZ Institute for Economic Research said the latest Barfoot & Thompson figures – which revealed a record average house price of $618,707 – showed most buyers did not think renting was a viable alternative, yet it was better in the longer term.

      “Would you buy a loss-making business?” Mr Eaqub asked, pointing out that many house buyers did not factor in the huge losses incurred through paying off a mortgage, maintenance and other expenses.

      He repeats this expert error in judgement later in the same year.


  7. Remember the experts mega-hype of Yr2000 that would cause calamity and the collapse of society? Interestingly nobody ever says “well I was wrong and then explain how they made their mistake”.
    Similarly (other than myself) I never hear anyone saying they were sure Saddam Hussein had weapons of mass destruction and that on balance we ought to invade – but before that disaster that was the majority opinion.
    Whatever happened to the 364 economists who wrote a public letter to Margaret Thatcher?
    Weather forecasters are remarkably accurate but their biggest errors occur when they predict ‘it will rain tomorrow’ or the opposite.
    Now we have experts advising us on global warming – I remain skeptical not of their science but of their certainty (It was over 20 years ago I decided not to buy any property that was within 10m of sea level and it doesn’t matter if I’m still wrong).
    It is best to trust the experts who give a margin of error to their predictions. Then balance the risks: so buying a house could result in “nice profit” or “unable to pay mortgage” – asymmetric results. So for most young Aucklanders I’d recommend don’t buy unless you have plenty of cash (but nobody would call me an expert).


  8. Michael

    Clearly there is a lot of interest in this blog. Here is my 2 cents. The question of who should rationally evaluate an expert’s opinion is old, perhaps dates to the 5th or 6th century B.C. It has been cast as a dilemma in many Sophists writings, Greeks, …and it appears clear than a non-expert, e.g., a politician, could not possibly evaluate an expert’s opinion. A politician cannot evaluate a medical doctor’s opinion on a particular medical issue just like an economist could not evaluate a doctor’s specific opinion. That is why we resort to peers evaluation. When the government receives an expert opinion on a subject it should do what we do, sent it for an evaluation by peers, not to a bureaucrat, an non-expert…This reminds me of Professor Blinder when he became a deputy governor of the fed sometimes ago; he said there is a lot of uncle-asking around…i.e., guessing and non-expert opinions. For an expert’s forecast to be taken by others he/she must have a record to be right, say, X percent of the time or on average, i.e., has a reputation and a track record, and the forecast errors must be serially uncorrelated.


    • Yes, that sounds right Weshah, but in general I suspect that the range of significant things about which an expert opinion (even validated by peers) is useful to voters for is quite limited. Experts may be right that Brexit would come at an econ cost – altho even that depends, as always, on the counterfactual (eg will UK policy be better subsequently, will the EU hold together long-term anyway) – and it may be useful to know the (expected) price, but many will still choose to pay it. That doesn’t involve ignoring expertise, but valuing different things than those the economists chose to weigh in on.

      Liked by 1 person

  9. A belated comment on expert’s views on Brexit. Many who voted for Brexit knew and understood the ‘experts’ comments that their standard of living might go down outside the EU however they didn’t vote for Brexit to increase their standard of living. They voted to ‘take back control’. The experts were addressing the wrong issue. In England there was, and is, a general antipathy to control of the frontiers being conceded to Brussels, to human rights being determined in Strasbourg and so on. If the experts had addressed those issues the result might have been different. The experts weren’t ignored; the comments of experts on these issues didn’t receive the appropriate publicity so they weren’t even heard.


  10. I’m guessing you have read Christopher Caldwell’s ‘Reflections On The Revolution in Europe’ which makes it pretty clear that the Brexit phenomenon was blowback for a number of bad decisions by experts in the EU in the 50s, 60s and 70s. I can think of a lot of other examples where expert opinion overrode common sense with bad consequences, e.g. allowing banks to hold 3% ordinary equity leading up to the GFC, or the Town and Country planning act of 1947, or increasing spending per pupil by a factor of 4 with no evidence of an improvement in educational standards.


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