Economics and policy: beyond science and ideology

Abstract

The dominant conception of the relationship between economists and policy makers is one which sees economists as scientists, whose knowledge is, ideally, derived independently of the interests which motivate politicians, civil servants and the public. This paper challenges the effectiveness, practicality and philosophical foundations of this outlook and proposes an alternative approach to policy-oriented economics. Developments in the philosophy of science have revealed serious problems in this positivist methodology and these undermine economists' conception of their rflle. An alternative approach is proposed ? based on a realistic view of how economists hold and change their beliefs and recognition that encounter and engagement with practical problems shapes the research which is undertaken. Although this case is, primarily, advocated with arguments concerning the effectiveness of economics in policy debates, philosophical support for the approach can be found in hermeneutic theory and the recent revival of a realist philosophy for the social sciences.