Economics as serviceable social knowledge: Philosophical investigations on the policy relevance of economics in post-pandemic society

Academy of Finland Research Project

In the aftermath of the 2008 financial crisis, social scientists, the public as well as economists themselves questioned the ability of economics to predict, explain and provide solutions to pressing economic and social problems. The economic crisis caused by the Covid-19 pandemic is more massive in its scale and global reach, and it is likely to have long lasting effects on society. With the new challenges that the post-Covid-19 world is likely to present, concerns about the capacities of economics to provide reliable policy advice become more urgent than ever.

The philosophical challenge is to understand and evaluate the potentials and the limits of economics as a serviceable social science. Our project takes on just this task.

By drawing on insights from philosophy of science, economic methodology, public policy studies, and social epistemology, and in contrast to most earlier research on policy relevance, which focuses on narrow conceptions of evidence-policy relations, the project advances a richer framework for the assessment and advancement of the policy relevance of economics. The account pays close attention to the complexities and dynamics of the policy making process; unpacks the different elements and relations involved in different instances of science-policy interactions; gives heed to the disciplinary practices of economists; and argues that policy relevance and policy goals are sensitive to changing social and economic conditions, interdisciplinary dynamics, and extra-disciplinary conditions.

The project then uses this account to investigate three crucial aspects of the discipline: (i) the roles economic models play in the policymaking process, (ii) the relation between the different dimensions of the policy process and the methods of causal inference and evidential techniques that economists use, and (iii) the influence of the social image of economics on its epistemic and institutional authority in interdisciplinary relations and in policy contexts.

The severity of Covid-19 as a test case for economics and the power of the conceptual and theoretical tools we bring to bear will guarantee novel insights into economics’ capacities and limitations. This will be very helpful to economics itself, other disciplines, those considering using the insights and advice from economics to guide policy deliberations, as well as to society at large.