On the Political Economy of Economic Policy Advice — With Applications of Environmental Policy

Abstract

It is a hardly disputable fact that one can get scientific reports in favour of (and against) nearly every policy a government wants to perform. One of the reasons for this is that economic theory is in many relevant cases so weak that it is possible for different economists to defend pretty contrary positions with the claim of scientific truth. This makes empirical research necessary. However, using the ecological tax reform as an example, it is shown that researchers can often easily obtain their 'desired' empirical results without (obvious) violations of the rules of scientific work. To detect such manipulations, a critical discussion of theoretical approaches and empirical results is necessary. Finally, we discuss how it is possible that despite all these problems the process of policy advice may lead to something like 'objectivity', why even economists who are not corrupt in most cases promote the objectives of their clients, and why economic policy advice is demanded at all.