The technical competence of economic policymakers
Mark Hallerberg, Joachim Wehner 14 February 2013
The appointments of Papademos in Greece and Monti in Italy in 2011 are examples of leadership changes meant to bring more competent people into government. This column aims at understanding why governments sometimes appoint economic policymakers with economics training but often do not. It suggests that levels of economics education among finance ministers are substantially higher in new democracies than in old ones and that the appointment of an economics PhD as a central bank president is 22% more likely during a banking crisis.
The following quotations suggest that ministers who lack technical competence make bad policy decisions.
“I don’t know what George Osborne’s degree was in. It was certainly not economics.” – Alex Salmond, First Minister of Scotland.
“In case you are wondering, George Osborne studied history.” – BBC Radio Four Announcer1
Politics and economics
technocrats, central bankers, finance ministers