Which Policies Should Have Priority?
Every day, policymakers around the world face a dizzying array of choices. The more they spend on, say, education, the less there is to run hospitals, fight pollution, or boost agricultural productivity. Lobby groups, activists, and the media promote certain causes – solar panels, the Zika virus, closing tax loopholes immediately – while less fashionable issues, like nutrition or non-communicable diseases, can slip beneath the radar. And most countries’ politics have proverbial “third rail” issues – policies or programs (say, state pensions) that are so sacrosanct that any policymaker who touches them faces instant political death.
Part of the problem is that when governments invest in economic analysis, they tend to do so for one policy at a time, asking simply: would this be cost-effective? Yes? Let’s do it.
But what if policymakers looked at a range of options simultaneously – comparing bridge-building with spending on school textbooks – to figure out where first to direct any additional money?