Joachim Wehner , London School of Economics and Political Science, Economists as Policy-Makers

Resume:

Finance ministers in the UK have never had an advanced economics education, while in democratic Chile they almost always have a PhD in economics. Why is there such variation in the use of economists as policy-makers – and why should we care? Based on joint research by Mark Hallerberg (Hertie School of Governance) and Joachim Wehner (London School of Economics and Political Science), the seminar introduces a dataset with unique biographical information about the educational and occupational background of 1200 political leaders, finance ministers, and central bank governors from 40 developed democracies from 1973 to 2010, as well as first results from an analysis of the forces of supply and demand for economists. The data show that left leaders appoint economic policy-makers who are more highly trained in economics and finance ministers who are less likely to have private finance backgrounds but more likely to be former central bankers. Finance ministers appointed during financial crises are less likely to have a financial services background. A leader’s exposure to economics training is also related to appointments. This suggests one crucial mechanism for affecting economic policy is through the selection of certain types of economic policy-makers. Next steps in the broader research project include assessing economists’ performance in office in both political and economic terms and the implications for political stability and economic prosperity.

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