Chapter

On Advising Government

Kaushik Basu

in Prelude to Political Economy

Published in print September 2000 | ISBN: 9780198296713
Published online November 2003 | e-ISBN: 9780191595943 | DOI: http://dx.doi.org/10.1093/0198296711.003.0007
 On Advising Government

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This chapter analyses the economists’ practice of giving advise to governments. It identifies a scope to the task of advising governments, which may have to be done differently from the current method. To make room for advice that will not fall on deaf ears, it is necessary to move away from the Walrasian world to one in which information is imperfect and asymmetric. It argues that advice often takes the form of persuasion in reality, that social institutions work to align the interests of the adviser and advisee, and that moving away from the assumption that preferences are mutually known provides a new strategic dimension to communication where the communicator seeks to influence the belief of the listener about the communicator’s preference.

Keywords: economic advise; government; economists; faulty advise; Cheater’s Roulette; communication; persuasion

Chapter.  7108 words.  Illustrated.

Subjects: Microeconomics

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