Changing minds

Dr Eric Crampton
Insights Newsletter
28 June, 2019

Politicians have a lot of privileges, but one privilege that regular folks have over them is the freedom to change our minds.

In an interview with Meet the Press in 1970, economist Paul Samuelson explained his changing views on inflation to a journalist by saying, “Well when events change, I change my mind. What do you do?”

It is a hard problem for politicians because of a particularly strong ‘market failure’ in political markets: information asymmetries between voters and politicians.

If a politician changes her mind about a policy on which they campaigned, voters can have a hard time understanding why. Sometimes, it will be because the politicians received credible advice from officials that the policy was unworkable, ineffective or counterproductive. But sometimes it might be because the politicians have faced substantial interest group pressure blocking a beneficial policy.

In that case, how can the party’s supporters tell whether the position change was desirable or a sell-out? The task is even harder if, in opposition, the party had claimed that special interest influence prevented the government from adopting the opposition’s then-preferred policy.

It can be too easy for government to support bad policy against good advice, knowing the policy is rather less than ideal, because the cost of changing gears is too high – and a lot of work. Party supporters who have taken policy promises as emblems of their party’s approach have to be convinced why the change in policy provides better outcomes.

If it is hard to get out of a situation, then it is generally good advice to avoid getting into that position in the first place. Better resourcing of political parties’ policy units could help, and so too could an independent fiscal agency to cost out party promises before parties committed to them.

July may see two substantial and desirable policy changes.

A Kiwibuild refocus is in the offing, and is likely to shift the emphasis towards better regulatory and funding models to allow a more responsive construction sector.

And, if reports on the as-yet-unreleased draft report of the Interim Climate Change Committee are accurate, the government will have the opportunity to reconsider whether a 100% renewable electricity target is the most cost-effective way of reducing New Zealand’s greenhouse gas emissions.

Changing your mind is rarely easy, and is especially hard in politics. Politicians who follow Samuelson’s advice should rightly be lauded.

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