CPB Netherlands Bureau for Economic Policy Analysis

CPB &

Evidence Based Policy

OECD

9-12-2016

Laura van Geest

Centraal Planbureau

CPB History

• Established in 1945

• Jan Tinbergen first Director

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Profile

• Independent

• Bridge between academia andpolicy makers

• Economists

• Free in research agenda

• IFI and Productivity Board

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Governance

• Independent

• Ministry of Economic Affairs

• Secondary legislation prohibits any instructions

• HRM: Director fixed term appointment by Council of Ministers

• Director appoints all other personnel

• Fixed budget (max 20 percent external financing)

• Review Board

• Periodic External Review

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Stakeholders

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Topics

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Contributes to Evidence Based Policy

• Forecasts

• Policy Analysis

• Academic Research

• Guidelines

• Memos on request

• World Trade Monitor

• Promising Policies Series

• Costing of Election Manifestos

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Promising policies series: practical Tool Box

• Overview policy area

o Outcomes

o Benchmark (international)

o Existing policies

o Survey literature

• Policy options

o Menu of options

o Effects (trade offs)

• Labour market, Education, R&D,Housing, Mobility

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Charted Choices: assessing election manifestos

• Since 1986

• Scope gradually extended

• Offer to parties, no requirement

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Preparing the Agreement

10

Publications in seriesPromising Policies

(CPB, SCP, PBL)

CPB: Medium-termbaseline

Including sustainabilityanalysis

SBR-Committee of high-level civil servants

(including director CPB):advice on deficit target

and budgetary rules

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11

Preparing the Agreement

CPB analysisof the election

manifestos

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Lengthy Coalition Negotiations

12

0

1

2

3

4

5

6

7

8

19

45

19

46

19

48

19

51

19

52

19

56

19

58

19

59

19

63

19

65

19

66

19

67

19

71

19

72

19

73

19

77

19

81

19

82

19

82

19

86

19

89

19

94

19

98

20

02

20

03

20

07

20

10

20

12

months Dutch government formation

Length coalition negotiations Average

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09-12-2016

Coalition Agreement and Financial Annex

13

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14

The Coalition Agreement

CPB analysis ofthe CoalitionAgreement

• CPB updates its medium-term baseline on the basis ofthe Coalition Agreement

• Ministry of Finance updatesits multi-annual budget andsets outlay ceilings

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Costing of Election Platforms

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• Baseline scenario

• Party platform

• Assumption: party has majority in Parliament

Centraal Planbureau

Builds on regular work CPB, but

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• Many parties as opposed to 1 (the Cabinet)

• Many measures (for 4 years instead 1)

• Broad range of analyses at one point in time

• More novel, untested ideas

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Tools

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Costing of Election Platforms - Content

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• Ex ante budgetary effects

• Effects on macro economic variables in medium term

• Effects on purchasing power in medium term

• Effect on government balance and debt in medium term

• Effect on sustainable public finances in long run

• Effect on structural employment in long run

• Effect on income inequality in long run

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Costing of Election platforms, Pros

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• Reality check

• Comparability

• Improves technicalities in proposals

• Extends credibility to parties

• Starting point bargaining for new government

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Role of the CPB

Costing of Election platforms, Cons

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• Individual party proposals

– Constrain on political debate (e.g. legal feasibility)

– Bias in proposals

– Gaming

• Scope

– Too broad and process too burdensome, but also

– What is not evaluated gets less attention

– There is more than economics

• Models

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Comparative Chapter

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Party Chapter

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In Practice - 8th edition

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• 10 parties

• 2468 measures reported

size individual measure > 50 mln (= 0,008% of GDP)

• 3 months production time

• 60 people (+20PBL)

• 456 pages

Per party 14-18 pages with measures and 20 pages with results

Centraal Planbureau

Final Considerations

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• Focuses political debate on differences in policy view

• True assessment requires involvement of parties

• Broad scope of issues to avoid shopping / gaming

• In depth knowledge of government budget and forecasting

• Stakes are high: difficult to exclude parties, need to deliver

• You need to love to be hated