Friday, 27 July 2018

Treasury needs economists

If you hated economists and wanted to punish them by throwing a dart at a group of Treasury analysts, odds are you wouldn't hit an economist even if you did hit somebody. 

I run through the numbers in this week's print edition of the NBR, following on from a couple of OIA requests. I'd asked Treasury about the qualifications of people employed at Treasury as analysts, senior analysts, principal analysts, and senior managers. UPDATE: the NBR piece($) is now online, along with Nevil Gibson's take on it.

Independently, but potentially as result of mutual commiseration about the state of the world, the Taxpayers Union put in a request looking for the proportion of new graduate analysts with economics qualifications.

Here's the current state of Treasury.
At the Analyst level, 19 have a qualification in economics or finance, 14 have another qualification, and the qualifications of 34 are unknown.

At the Senior Analyst level, 14 have a qualification in economics or finance, 34 have another qualification, and 45 are unknown.

Among Principal Analysts, the qualifications of 12 are in economics or finance, 12 have another qualification, and 11 are unknown.

Economists have stronger representation among senior managers: 23 have a qualification in economics or finance, 15 have another qualification, and 17 have an unknown qualification.

Treasury has eight staff at those levels known to have a PhD. Of those, two are economists (a Senior Analyst and a Senior Manager), one is a sociologist (Principal Advisor), one is an accountant (Senior Manager), and four have a PhD in “Major Not Specified”.

In any case, it appears that the New Zealand Initiative, with a total staff of fourteen including administrative staff, includes more PhD economists than the entire New Zealand Treasury – but perhaps it only appears that way because smaller organisations are more likely to know the disciplines of all of their staff members’ doctorates.

A separate OIA request by the New Zealand Taxpayers Union showed that four of 24 hires at the Analyst level last year had an economics qualification. Among those hired last year with an Honours degree or higher, two of 14 had an economics qualification. That suggests Treasury has not been trying to boost capacity on the economics side, though it couldn’t rule out more senior hiring boosting economic capabilities. But the stock of trained economists at Treasury remains low. 
How Treasury's meant to manage building a brand new system for running budgets under the living standards framework, while handling its rather important day-job tasks, and not really having that many trained economists around... I don't know. Treasury doesn't work in some kind of magic world without opportunity costs.

You'll have to pick up the NBR for the rest.

But check out this beaut visualisation of the problem that our excellent Joel Hernandez put together.

After the NBR went to press, I noticed another OIA that the Taxpayers Union had run. This is the qualifications list of the 2018 graduate cohort hired in.


Double-major undergrads, at least at Canterbury, ran a pretty thin version of the economics degree: principles-level micro/macro, intermediate micro/macro, then any four papers at 300 level. Double-major heading to Honours at least would be taking the serious papers.

The 2017 cohort was about as bad. The 2019 cohort's better, depending on how seriously you take the economics training of people doing double-undergraduate degrees with three majors. 10/15 had some economics in their degrees, but only 4/15 have Honours or better in economics or finance. Honours is the minimum training for a professional economist.

I expect to be following this up in more columns yet to come.

Oh - and don't pretend that this is some problem for which you can blame the Labour government. This mess very much started under Bill English's watch as Minister of Finance.

Update: the underlying OIA requests:


No comments:

Post a comment