Electoral Promises

This piece appeared in the September 2002 edition of the ZEWnews.

It is surprising how thoughtless politicians have been in proclaiming quantitative targets despite bad experiences — for example when they talk about the number of the unemployed persons having been targeted by some measures for promoting integration into regular employment, or regarding the level of certain contribution rates to the financing of social security systems. In most cases, achieving these targets is not or at least not entirely under the control of policymakers. Thus, even the promised effectiveness of these measures is merely an assumption.

Understandably, citizens have been growing weary of such promises. The former government aimed to cut the number of the unemployed in half and determine the exact number of unemployed individuals, which had been stagnating at 3.5 million persons. As is well known, neither of these promises were fulfilled. However, this clear breach of promise did not keep, for instance, the Commission for Modern Services in the Labour Market (“Hartz Commission”) from proclaiming this past summer that they would cut German unemployment in half, thereby reducing unemployment in East Germany by at least 20 per cent — if their proposals were put into practice. When these numerous (electoral) promises – the majority of which are the result of complementary economic policy action — are taken at face value, this raises the question as to whether there are sufficient unemployed persons to justify the plethora of assurances from policymakers. But in all seriousness, does this not jeopardize the credibility of sound economic policy strategies?

I agree that such striking figures are the best way to guarantee powerful headlines — a vital tool for policymakers. Economists doing policy advising have also been unable to resist the temptation of increasing their name recognition by means of catchy numbers whilst trying to banish any potential doubts by arguing that the values are the result of computer calculations. After all, a computer can never be wrong. But is there a person left in this profession who still uses pen and paper to make calculations? The fact remains that honesty in the sense of modesty is the best policy, since the majority of people are more open towards this kind of conduct than one might expect. We can make clear to the public that even well-founded calculations are only statements of probability with a considerable margin of error, which only apply if there are no other factors interfering with the variable in question. People will understand that (economic) policymakers are only partly responsible for misery on the labour markets, since, for example, the parties of a collective agreement are responsible for taking the leading role in the efforts to combat unemployment. These parties also have a great influence over global economic development, which means that while there are ways for economic policymakers to make an impact, these options are rather limited. Voters will then also accept a greater scope for discretion when it comes to quantitative targets, provided that policymakers present a clear economic policy strategy that does not fall short of addressing unpleasant measures. What is certain is that it requires courage to make these statements.  So why don’t we – politicians and economists – indeed show some courage and try to be modest in an open and therefore also relatable manner when we give interviews? There is no need to reject well-founded calculations by calling them “a reading of tea leaves”, as has been recently happening.