The Economist as Adviser

• Author: Courtney Blackman
• Pages: 349-369

THE ECONOMIST AS ADVISER

349

This paper shares with would-be economic advisers my

observations on, and lessons from, more than 40 years of serious

study of the discipline of Economics, 14 years as a senior national

economic adviser, and another 15 years as an economic consultant

to central banks, governments and international institutions.

Two recent experiences have prompted my choice of this

topic, ‘The Economist as Adviser’. The first was an invitation by

the Eastern Caribbean Central Bank to address a group of young

central bank and government economists; the second was my

deep dismay that half-a-dozen American Nobel laureates,

including this year’s awardee, Professor Edward Prescott, could

whole-heartedly support President Bush’s fiscal programme that

refunded one and one-half trillion dollars to taxpayers, with the

wealthiest two per cent receiving about 60 per cent, which has

led to record fiscal and current account deficits and a collapsing

currency, and has thrown the US economy out of kilter.

As a former central banker, I have been particularly distressed

that the Chairman of the US Federal Reserve Board, Dr Alan

Greenspan, who had been a fervent champion of budget surpluses

during the Clinton presidency, and who had initially

recommended using the fiscal surplus to pay down the national

debt, could so quickly be transformed into a full-fledged

supporter of President Bush’s massive deficit-inducing tax cuts. I

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THE ECONOMIST AS ADVISER

THE PRACTICE OF ECONOMIC MANAGEMENT

350

therefore resolved to share the fruits of my training, experience

and reflection in the expectation that a significant number of

you will one day serve as economic advisers in governmental

organizations, and will hopefully behave in a more responsible

manner than your American counterparts. On second thought,

US economists might benefit even more than you from the

following remarks!

The paper first defines the discipline of Economics,

distinguishes among various categories of professional economists,

and zeroes in on the role of economic adviser. This is followed by

a description of the tools of economists. Third are musings on the

optimal academic and practical preparation of the economic

adviser. Fourth, we identify the three most common pitfalls in

the path of the economic advisers, especially those in the

Caribbean: ideology, politics and mathematics. Fifth, we focus on

two areas of particular concern for an economic adviser in

developing countries: strategic planning and programme

implementation. I conclude with general advice to the prospective

adviser.

What Economists Do

It is difficult to define ‘Economics’ in one sentence; my

favourite definition is therefore double-barrelled:

• Economics is the study of how men and women go about

the provision of their livelihood.

• Economics has to do with the allocation of scarce resources

among competing ends.

The first part of the definition establishes unequivocally that

economics is concerned with the welfare of people; the second

part directs our attention to the technical aspects of the discipline.