Even when decision makers are happy to consider expert advice and analysis, they may take decisions which appear perverse to others, including their advisers. This is often because have very different incentives and objectives to those of their advisers.
At its simplest, advisers should be incentivised to design policies that work, that are properly planned and that are well resourced. But decision makers - whether senior executives or politicians - will often want rapid results at minimum cost.
Equally obviously most decision makers are strongly incentivised to impress their senior colleagues or impress voters at the next election. They particularly hate media criticism, fair or unfair. For private sector executives, a policy success is one that gets them a juicy bonus, or gets the head hunters calling. For politicians, a policy success is:
- a policy around which their party can unite,. A good examples was the Brexit referendum
- a policy which dissuades existing supporters or floating voters from switching to other parties. Good examples were
- Jeremy Corbyn’s decision not to vote against the income tax cuts announced in the Conservatives’ 2018 Budget, and
- Tony Blair’s “Tough on crime, tough on the causes on crime".
- a policy which asks “Which side are you on?” in order to cement the support of existing supporters or floating voters. Such policies are very hard to reverse. Good examples were
- Mrs Thatcher’s ‘Right to buy’ and more recent ‘Help to buy’ policies, and
- policies aimed at pensioners such as the state pension triple lock and free TV licences.
Remember, too, that powerful people seldom have the time or inclination to understand the detail. Much of their decision making may be based on intuition and gut feeling, and this can make sense if they are highly experienced and aware of current developments inside or outside their organisation. It is much more dangerous, of course, if they are attached to half-remembered and possibly long discredited theories.
Finally, decision makers (and often their advisers as well) may find it very difficult to recognise that their plans are going wrong, because they will then be associated with what will be characterised by others as a mistake or a failure.
(Most, if not all, of the above problems particularly affect politicians who have short time horizons because of the electoral cycle and because they may be reshuffled. They will almost certainly not acknowledge that a policy has failed for fear of suffering political or career damage. This inhibits learning, of course.)