Policymaking Beyond Economics.

• Author: Murray, Phil R.

Thinking like an Economist: How Efficiency Replaced Equality in U.S. Public Policy

By Elizabeth Popp

Berman

329 pp.; Princeton University

Press, 2022

Ever feel frustrated with the quality of policy analysis from an economist's perspective? Consider picking up Elizabeth Popp Berman's Thinking like an Economist. The author is a sociologist who teaches organizational studies at the University of Michigan. Her book documents the rise and proliferation of economic perspectives in the way government officials make policy. As you may imagine, her perspective is quite different from the typical reader of this journal. An economist who reads her book may realize that the state of policymaking could be worse and may even chuckle at how influential economic ideas have become.

Berman uses the phrase "economic style of reasoning" to describe how economists see the world. She focuses on microeconomics. According to her, two principles are key: First, this way of thinking "maintains a deep appreciation of markets as efficient allocators of resources." Second, she continues, "the economic style places a very high value on efficiency as the measure of good policy." Her characterization is reasonable.

Economic style of reasoning / The author asks two questions that guide her history of policymaking. The first is, how should government make decisions?

Economists working for the RAND Corporation used "systems analysis" to answer this question. The approach com bined operations research and cost-benefit analysis to solve problems. RAND economists set up the Planning-Programming-Budgeting System (PPBS) at the Defense Department under secretary Robert McNamara in the early 1960s. Berman describes the method as follows:

PPBS began by specifying the broad goals of an agency or office; identifying the various programs that might be used to achieve those goals; quantifying, to the extent possible, the cost-effectiveness of those alternative programs; and then using that information as a guide to budgeting. President Lyndon Johnson ordered the adoption of PPBS to make decisions throughout his administration. Although government agencies neither wholeheartedly nor widely embraced it, the author credits the system for establishing the economic style of reasoning in the executive branch. From there, Congress based the Congressional Budget Office on the economic style, and university departments of public administration around the country taught it to their students.

Political goals / Berman tells stories about how economists think without teaching readers how to think like an economist. This is no textbook. It is a history filled with names, dates, and agencies.

That brings us to the second question guiding her history, how should we govern markets? Early on, government officials regulated...