Assumptions, travel and public policy: A year as a consulting Economist

2019 was the first year I worked full time as a professional Economist. The two main industries I provided advice on were science and education. I’ve taken some time to distil my experience into five themes that shaped the year, with the aim to track how my perspective changes over time.

Theme 1: You are often left to your own devices, and more often left to your own assumptions.

Assumption setting is one of the main expertise areas of an economist, however I have been surprised by how few assumptions had been developed [normally by government] when analysing a problem. Things that seemed fundamental had not been considered, and a general decision analysis / hypothesis based problem solving approach was extremely rare.

I got very good at making assumptions based off highly limited information (and I realised that it’s part art, part science).

Theme 2: Travel is a tool, not a way of life.

The travel count for work this this year: 28 flights, 5 main cities:

BNE>SYD>BNE x 4

BNE>MEL>BNE x 3

BNE>CBR>BNE x 4

BNE>HBA>BNE x 1

The novelty of travel wears off very quickly, however the ability to maintain close relationships with friends from different cities is something I am extremely grateful for.

While the upside of expensed meals and flash hotels is some fun stories to tell friends from back home, the more realistic counterfactual is missed nights with loved ones, and a LOT of long lonely late night Uber rides on your lonesome.

Theme 3: For all it’s issues (and there are many), Australia remains a lucky country

The resilience of the Australian economy (based on our resources, institutions, and established export markets) is profound, and extremely rare compared to comparator countries.

While we need to diversify quickly into advanced ‘knowledge exports’, our fundamentals (e.g. mining, higher education, and finance) are the envy of the world. We shouldn’t rest on our laurels here, but we should seek to export more of what we do well, and transition towards an output mix that will be suitable in a 2050 economy.

Theme 4: Some public servants are among the hardest working people I know

I was frequently surprised by the level of talent, tenacity and grit within government in Australia. For all the criticism that the public services gets from politicians, media, and the average punter, I saw some extremely talented teams all united around making the country a better place. I used to believe the phrase ‘exciting opportunities within government’ was an oxymoron — now it’s something I know to exist.

Theme 5: There are a lot of problems no one has paid attention to yet

While university level economics teaches you to be an expert in building theoretical models from first principles, in practice I almost always chose not to reinvent the wheel.

In conducting numerous literature reviews and meta-analysis of international best practice, I was consistently stunned by just how little information there was on some of the biggest public policy problems of our time. Part of this is the speed in which case studies become redundant (e.g. publications or approaches from 5 years ago are no longer relevant), however a large part is just that there is a deficit of clever minds focusing on projects involving large scale, generational change. I hope this mismatch of problems and expertise narrows over the coming years.

So, what’s the is the ‘so what?’ for 2020? We’ve got some big opportunities coming up (e.g. implementation of COP25 recommendations, shifting export mixes and an unprecedented restructure of the public sector). Where Australia will land on this, I wouldn’t hazard a guess. Watch this space. It’s going to be an interesting year.

@cfcoverdale

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