Public Managers and the Economists

DOIhttp://doi.org/10.1111/puar.12192
Date01 May 2014
AuthorLuiz Carlos Bresser‐Pereira
Published date01 May 2014
Perspective
Luiz Carlos Bresser-Pereira is
professor emeritus at the Getulio Vargas
Foundation in Brazil. He was minister of
public administration of Brazil in the f‌i rst
Fernando Henrique Cardoso administration
from 1995 to 1998.
E-mail: bresserpereira@gmail.com
Public Managers and the Economists 303
Public Administration Review,
Vol. 74, Iss. 3, pp. 303–304. © 2014 by
The American Society for Public Administration.
DOI: 10.1111/puar.12192.
Luiz Carlos Bresser-Pereira
Getulio Vargas Foundation, Brazil
In the public management literature, the
relationship between public bureaucrats and
politicians is an ever-present theme. As they both
def‌i ne policies, politicians and bureaucrats compete
as much as they cooperate in policy making. Top
public managers are policy makers, and the schools
forming them often call themselves schools of public
policy instead of schools of public administration.  e
choice is comprehensible. What is less understandable
is why public managers leave economic policy as an
exclusive domain of the economists. If public manag-
ers don’t passively accept the policies proposed by
politicians, why don’t they exhibit the same behavior
in relation to economic policies? And why don’t we
have a literature discussing the relations between pub-
lic mangers and economists?
e likely answer to my question is “because it is a
very specif‌i c science that only economists are able to
master; it is very abstract thinking full of mathematics
that we are unable to understand and discuss.” But if
economic policies are so complex, politicians would
also be unable to have a say on the matter and, even
more so, the people.  at would mean that we do not
live in a democracy but in a technocratic authoritarian
regime. Further, is this mathematical economics really
required to evaluate economic policies, or is the basic
economic theory that we f‌i nd in introductory text-
books and the information and debates that we read
in the media about actual economic policies enough?
My answer is that they are enough—not fully but
basically enough. While the two supporting meth-
odological sciences—econometrics and economic
decision-making theory—require a high level of
mathematics, good economics does not.  is is for
a simple reason: dif‌f erent from econometrics and
economic decision-making theory, which are meth-
odological sciences, economics is a substantive social
science; it deals with human beings whose behavior
can neither be predicted mathematically nor deduced
from axioms.  e correct form of def‌i ning laws
in economics is not sitting down in an armchair,
adopting some hypotheses, such as homo economicus
and the law of diminishing returns, and, from these
feeble foundations, formulating a system of models
centered on the general equilibrium model, whose
truth criterion is internal coherence and not realism.
e alternative method—the one that was followed
by Adam Smith, Karl Marx, John Maynard Keynes,
and Joseph Schumpeter—is to observe economic
behavior, look for tendencies and regularities, and,
once they are found, make generalizations, building
historical or empirical models. In other words, the
scientif‌i c method required by substantive sciences and,
in particular, by social sciences is not the hypothetical-
deductive but the historical-deductive method. As a
trade-of‌f , the general economic theory created with
the use of this method is not a theoretical castle in
the air but a body of knowledge with some predictive
capacity that educated men and women have no dif‌f‌i -
culty understanding and using to formulate economic
policies.
us, public managers who are not economists, but
who know some basic economics, are fully entitled
to discuss economic policies. More than that, given
that they are endowed with part of the power of the
state, they are required to do that. If their basic task
is to help politicians to def‌i ne policies, they are a part
of the political and technical process of formulating
economic policies. In the same manner that they have
views on education, health care, or security policies,
they must also have views on economics and eco-
nomic policy making.
Besides, economics is not just the science of how mar-
kets allocate or coordinate factors of production but
also of how the state participates in this task. In micro-
economic terms, markets are an excellent institution
to allocate the factors of production of the competitive
sector of a national economy, not of the monopolist
sector. Second, markets are unable to coordinate the
national macroeconomic systems. Such systems are
highly unstable, and they require an active and compe-
tent macroeconomic policy. Actually, economists may
Public Managers and the Economists

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