Avatar of admin


Europe between Planners and Searchers

March 28, 2013 in Economics

By Dalibor Rohac

Dalibor Rohac

In his 2006 book, The White Man’s Burden, William Easterly makes the distinction between “planners” and “searchers” in economic development. Planners like to believe they already have the answers to big questions of economic development, which they often see as simple engineering problems, waiting to be fixed by enlightened political elites.

In contrast, searchers display more humility both in the choice of questions they attempt to address and the answers they provide. Searchers try to address local, context-specific problems, instead of coming up with a “Grand Theory of Development,” and are willing to accept that answers might arise from the bottom up, through experimentation, and trial and error.

Although Easterly’s interest is in economic development, the distinction between planners and searchers is at the heart of many public policy disagreements. And in spite of appearances, the planners versus searchers dichotomy is not an ideological distinction. Some free-marketeers are keen on particular one-size-fits-all solutions (think about proponents of the gold standard), and there may well be people on the political left who understand the idea of context-specificity and local knowledge.

In fact, there is a place for both. Hayek once famously wrote, “this is not a dispute about whether planning is to be done or not,” but rather a dispute about whether it “is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.” Individuals, firms, and governments do—and should—plan. A problem arises, however, when the limits of planning are not recognized and when it is expected that the planner always has a correct answer to any policy question.

We’ve yet to see the final bill for the ideological blindness of European planners.”

Hayek devoted his life to explaining the pitfalls of one instance of such hubris—the command economies of the Soviet Union and Eastern Europe. While in no way commensurable with the atrocities of communism, the ideological commitment of European political elites to the European integration project may well enter history books as yet another illustration of such bloated self-confidence.

Europe has a long-standing “planning” tradition, which the European integration process has mirrored. This intellectual undercurrent encompasses the belief that governments should play an important role in the economy, but more importantly the belief that European countries need to move towards a political union. A corollary is the notion—implicit in European policy debates—that Europe’s problems require a common European response.

Though initially prompted by an ambition to enlarge …read more
Source: OP-EDS

Leave a reply

You must be logged in to post a comment.