Why Economic Policy Did Not Pass Over to Other Countries or Survive
Specific circumstances had favoured the emergence and flourishing of the discipline of economic policy in Scandinavia, the Netherlands, the United Kingdom, Italy and a few other countries.
After all, these countries shared some common features distinguishing them from other countries: the weight and left-wing orientation of the ‘intelligentsia’ as well as of the political parties supporting the governments or of some strong opposition parties and institutions (such as trade unions), together with the idea that public happiness should be served by a ‘visible hand’. To these we should add another circumstance for Italy: an idealistic epistemological attitude of the Italian scientific community, the importance at the time of the Marxist and Catholic credos - which are both pro-government - and the relevance of civil society.To illustrate why the idea of economic policy did not pass over to other countries - and indeed did not survive in the countries where it flourished for some time - multiple explanations can be offered. Reference could be made not only to the absence of features similar to those listed in Chapter 1 but also to the strength of the bureaucracy (including the status of the central bank) in some countries. This may ‘insulate policy from various political pressures, although it may also limit the influence of outside economic theorists over policy’ (Pekkarinen 1988: 5), which could explain why a theory of economic policy did not develop in France or Germany. A reason for the scarce attention to long-term planning (and then to an ingredient of the core) in some countries might be tied to the importance of the Nordhaus political business cycle and the political aspects of policy, at least in some countries, such as the United States, Canada, Japan and, possibly, Germany, in contrast to the Scandinavian and other countries mentioned earlier. However, on the one hand, this explanation would not fit all situations, such as e.g. that of France; on the other hand, there appears to be no reasonable explanation for rejecting the remedy suggested as optimal by Nordhaus (1975:189) in referring to a ‘planning framework’.
The only possible explanation is that in most of the countries where economic policy did not develop, as well as in those in which it was in progress, either the orientation of people in favour of markets, political pressure or both also were really very powerful in intellectual circles, merging with the developments of economic theory, as we will discuss later. In fact, these developments at least partly questioned the preconditions for the existence of an economic discipline. I discuss them in the following sections.
2.2