Goodness knows what will happen in 2019. Most of us have learnt to give up making predictions, but at least anniversaries continue to crop up as expected and on time. This year the Institute for Fiscal Studies will turn 50, so please forgive me if I turn introspective just this once.
As it happens, the pages of The Times are the best place to start our 50th birthday celebrations, for it was this newspaper, on April 10, 1967, that devoted the whole of one page — and they were big pages in those days — to a “charter for the taxpayer” written by the four individuals who went on, two years later, to found the IFS. Dismayed by the “half-baked” proposals for tax reform put forward by James Callaghan, chancellor at that time, they determined that a new organisation needed to be set up to provide an independent source of expertise in tax and fiscal policy and to bridge the gap between “academic economists with no practical experience” and those writing the actual finance bill.
From those slender beginnings, the IFS has grown to the (still rather slender) organisation it is today. I’ll spare you the history lesson. I’ll even spare you the economics lesson. Instead, I think it’s worth asking a rather odd question. Why do organisations like the IFS exist at all?
After all, there are thousands of economists and many thousands of other social scientists employed by UK universities, and thousands more in government. One of the great changes since the late 1960s has been the enormous expansion of the social sciences both as academic disciplines and as professions within the civil service.
Yet far from leading to a withering of independent think tanks and research institutes, the need and demand for what they do has grown. There remains a yawning chasm between the work of most academic social scientists and the work of government. The cultures, the incentives, the values are utterly different, the mutual incomprehension often astonishing to behold. CP Snow, himself both an academic and a senior civil servant, as well as a scientist and novelist, wrote in 1959 about how the lack of communication between two cultures — the scientific and the artistic — was holding back advances in western societies. It is not absurd to suggest that the gulf between the cultures in government and in academia is having a similar malign effect.
Of course these are different worlds with different objectives, and of course there are multiple exceptions to this general rule. But both worlds remain far too insular. Too many policymakers are focused only on the short term and are shockingly ignorant of advances in the research world. Too many researchers are dismissive of the needs of government and equally ignorant of the policymaking process. As a result, the two communities are far less than the potential sum of their parts. There is little movement between the two. University departments rarely hire on the basis of experience within government; senior academics rarely move into government.
The result is that there remains plenty of space for organisations looking to span those worlds. That means placing equal value on a deep understanding of academic research, literature, data and methodologies on the one hand, and on policy priorities and the reality of the policymaking process on the other.
More openness within government also would make a huge difference. It employs thousands of economists, statisticians, social researchers and others carrying out good and important work. They are constantly analysing data, building and running models and advising ministers. In many areas of policy, more analysis happens within the relevant government department than the totality of analysis carried out by all external bodies. Yet little of it ever sees the light of day and when it does it is often wrapped in a party political blanket. That is a dreadful waste of resource and another drag on the quality of public discourse and of public policy, as are the continued barriers to accessing even basic data. Innovations like the establishment of the independent Office for Budget Responsibility are valuable in large part not only because they make independent judgments but also because they are so much more open with data and analysis than traditional government departments.
It should be obvious why independent analysis is needed to hold government to account. The reason why that has to happen, at least in part, from outside the university sector is more complex. Part of it is about role, focus and incentives. Part is to do with culture and willingness to engage in communication. But there is a deeper and more fundamental barrier to universities as organisations playing the role of trusted intermediary, of objective holder of government to account.
We rightly prize academic freedom. Individual academics have considerable latitude to express views and interpret results as they see fit. Individually they can, and some do, build trust in themselves and in their own brand. But precisely that freedom makes it much harder for an entire university to do the same. There are many disadvantages to being a small, financially insecure, uni-disciplinary research institute, but one great advantage is that capacity to build a single culture, brand and, hopefully, reputation for trustworthiness.
So I remain as convinced today of the need for, and value of, organisations like the IFS, as did its founders just over half a century ago. In fact, I’m sure both that we at IFS could and should do more, and that there is a need for many more such institutions, if our policy and politics are to be better informed, debated and progressed over the next half-century.
This article was originally published in The Times and is reproduced here with full permission. Paul Johnson is director of the Institute for Fiscal Studies. Follow him on @PJTheEconomist.
Authors
Paul Johnson
Paul has been the Director of the IFS since 2011. He is also currently visiting professor in the Department of Economics at University College London.
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