Henry and the Academics

You know, you have to believe that Ken Henry really doesn’t understand academics at all when he publicly says stuff like this:

“Whenever an idea is ventured publicly by a person, whether that person is a policy advisor or whether it’s a government minister, there’s at least a handful of academics who will contest it,” he said. “I’ve seen it on both sides of politics – this is not a partisan comment at all – but for governments, government ministers who are seeking to get ideas legislated – it is unbelievably frustrating, incredibly frustrating.”

“It is a great strength of economics as a discipline. It is one of the things that as a young person I found very attractive about the study of economics, this contest of ideas. But I think there are occasions on which economists might, at least for a period, put down their weapons and join a consensus”…

Warwick McKibbin, appropriately sums up the position of we academics:

“I have enormous respect for Ken Henry, but he can’t believe that you should have consensus because it is better to have bad policy that everyone agrees with than eventually get god policy that will work.”

He goes on:

If the government won’t engage you behind closed doors then an academic has no other choice than to express their opinion in the public interest in public for the public to assess.

Warwick, like many, have opposed the Government strongly on many policies. And in so doing, he has added to the debate and in some cases there is arguably success in getting sense put in place. It is tough thing to do and it frustrates me to see it so derided.

But I want to add a few things here. First, let me tell you, praising the Government is as thankless a task as critiquing it. I was someone who fell behind the Government and wanted to get the ETS done and said so publicly in the face of criticism myself. I was someone who fell behind the Government and argued that we should pay attention to the evidence on FuelWatch and give it a go. And I was someone who, after years of critiquing their broadband policy, praised them when they moved in the right direction. And was I ever able to be brought in to help improve these policies (something they could clearly use)? No. Whenever I tried I was given the clear message that there are insiders and there are outsiders. Warwick is actually one of the insiders. I write blogs and occasionally newspaper pieces only to find the Government abandoning those policies that I supported for political and expedient reasons rather than on the basis of evidence. I find myself often wondering these days if it is really worth the effort to write long submissions to Parliamentary inquiries, conduct research in policy-relevant areas and stick my neck out at all only to wake up and find that we are all really just an annoyance anyway.

Second, this is isn’t a problem with just this Government. They are all like this. The Howard Government in the face of the clearest evidence that it was poor policy went ahead with the introduction and then increments to the baby bonus despite the strain that put on maternity hospitals. Where was Treasury then? How could it be that the mistake was made and then repeated two times with ample time and options to get around it? And I will continue to harp on me and fortunately I get to write textbooks so that our students can see what a broken evidence-based policy system looks like.

In the US, I can see that things are very different. The Government consults regularly with outsiders and genuinely solicits advice. I have seen it happen, not just here at Harvard but all over the place. In Australia, the aura is one of distance. Now I am not saying that Ken Henry or anyone else has to engage with me personally. Just being a professor commands no such right. But I would like to see him and the Government actually engage with some outsiders regularly rather than project the image of distance. But regardless, there is surely no right to consensus until the Government has earned it. They have far to go. If asked, I’ll gladly help. Otherwise, I speak my mind from the sidelines.

15 thoughts on “Henry and the Academics”

  1. That’s interesting because I have the exact reverse impression. Here in Australia I actually get to meet and talk with people in the policy process on a regular basis whereas in the US in both places (Boston and Albany) I’ve been the contact was extremely rare. But then I am in Canberra here.


  2. Interesting comment from David Stern, RE: consultation & living in Canberra. Is the location of our national capital contributing to our politicians’ and senior civil servants’ sense of splendid policy isolation? (Could be an entirely new line of discussion…)


  3. Being generous, perhaps Henry was asking academics to publicly show support for wider policy aims before attacking the details of a proposal.


  4. @LJKH,

    I see your point, however isn’t that a symptom of many public policy issues. You can agree that an RSPT (for example) is good on principle, but it is the specifics on the design and implementation of policy that actually need – and deserve – criticism. This is where there seems to be lack of information and informed comment.

    As a side issue, since this involves policy discussions on taxing ‘super profits’ on immovable resources – I wonder when the penny will drop and people/academics start thinking about ‘super’ capital gains on another immovable resource – the family home and geared investment properties. I’m guessing that politicians will stay away from that policy discussion…


  5. The thought that Govt and Oppn may reach out to the most readily available academic to prop up a particular point of view does sound plausible. If it is true, then wouldn’t you then ask why Canberra is in a backwater, cut off from the broadband comms that connect the rest of the world? There are probably three or four ways to set off an alarm on Josh Gans’ iPhone. The proposition, of an antiquated model of connectivity, suggests any academic who wishes to be part of the national debate should sit by a fax machine.


  6. @ DP
    A side issue is that academics are on a hiding to nothing in the way they are reported in the media.
    The reportage of comments from Jack Mintz on the resource tax in today’s papers leaves you with almost opposite impressions on his overall view on the tax depending on whether you you read the Oz or the Fin.


  7. @LJKH

    Thanks for the reference to Jack Mintz. Interesting interview: seems to support the concept of RSPT but the devil is in both the existing corporate tax rate and the proposed new tax level. Mintz mentions the notion of risk-sharing and the 6% bond rate.

    Tim Colebatch from The Age has been one of the few local commentators to point out the (presumably postive) aspect of the Federal Government sharing the risks of development. You would think this aspect should influence the miners taking on projects with regard to the risk-return trade-off.


  8. Joshua

    I think you are missing the point of what Ken Henry was saying. He was not suggesting that economists should not critique bad policy. He was suggesting that too often economists get caught up debating the relative optimality of alternative policies (different types of ETS, carbon taxes, etc), when all of the alternatives would be welfare improving. The ensuing debate then gets used by enemies of any reform (witness the ETS debate), which then gets politicised, which then makes it difficult for any reform to go ahead at all.

    The RSPT debate is proceeding in the same way. It is almost certainly superior to the current regime for taxing (charging for the right to extract) resources. However, there are obviously a range of alternatives, with different economists have different views on the strengths and weakenesses of those alternatives. So, we get a messy public debate that muddies rather than clears the waters, and economists getting used by lobby groups that simply want to kill any increase in taxation levied on the resource sector.

    You also shouldn’t mistake a lack of public comment by Treasury officials criticising government policy, for their failing to present views interally on the strengths and weaknesses of different policy proposals. Treasury are there to give advice to the government of the day. The government decides what to do with that advice and is free to ignore it. The civil service is then obligated to implement the policy.

    I also find your comments about the quality of US policy making more than a little bizarre after watching the debates about health care, emissions trading and financial reform unfold there. Perhaps more economists have been consulted but you could hardly argue that the consultations has yielded much in the way of high quality public policy.


  9. Labor Outsider,
    I agree with the politics of what you’re saying, but the job of an academic should not be influenced by the political environment of the day. Academics are ‘truth-seekers’, so to speak, and politicians are professional compromisers and coalition-builders who try and bridge the differences between competing values. In many ways these jobs are mutually exclusive.
    Asking academic economists to put aside their empirical disagreements and back the Government of the day because that would be the most politically effective way of passing a welfare enhancing policy, is anathema to the very concept of academia.


  10. ‘[T]oo often economists get caught up debating the relative optimality of alternative policies (different types of ETS, carbon taxes, etc), when all of the alternatives would be welfare improving. The ensuing debate then gets used by enemies of any reform (witness the ETS debate), which then gets politicised, which then makes it difficult for any reform to go ahead at all.’ – Classic divide and conquer tactic.


  11. Labor Outsider really nailed it. It is one thing to constructively engage on welfare-improving reform, it is another to allow yourself to be an instrument of opponents of (any) reform. I’d also add that there are certainly ways for academics to contribute to policy formulation in this country (although I’ll concede I personally get frustrated with the relative weight given to academic input). Indeed, I think it should be pointed out that the Henry Tax Review consulted numerous academics, as well as running at least one conference.


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