Brexit impact studies: the clothes of the emperor

The Government is struggling to avoid releasing the complete 58 ‘Brexit impact studies’.

David Davis mentioned that these existed ‘in excruciating detail’.  It was later claimed, in a manner that the government must have realised would be taken to be an attempt to avoid publication, that the studies did not in fact exist in the form in which they were requested.  Subsequently, we are to understand, the studies were compiled in a form that they were requested, but with redactions.

In part this is an exercise in principle, rather than a substantive one in exposing the impact of different kinds of Brexit.  The principle being:  If the government has figured out something of import that affects us, and how we judge their actions, then we have a right to know it, unless by knowing it we somehow harm our collective selves.

But those impacts are, in aggregate, known in so far as they could ever be known [nothing is certain of course, in conditional forecasting:  I don’t know how much weight I will lose if I give up pizza].

We have estimates from NIESR, IMF, OECD, Oxford Economics, Economists for Brexit, the LSE’s CEP, the Treasury, and others.  And we know what we need to know about these different groups’ competencies to decide what weight to put on them.

If that were all we needed to know, there would be nothing in the DExEU studies to find out.

However, this is not all that will be in those studies.  There probably is not another study that looks at the impact of Brexit at such a level of disaggregation, at how it impacts each industry and sub industry.  If all we wanted to do with that disaggregation was add it up, we would not be much further than we were, except perhaps having corroboration and refinement of the estimates already out there.

But these studies will highlight those hardest hit; and also those with most to benefit in a way that bucks the aggregate loss.

Political economy is full of stories of policies thwarted or imposed because the costs or benefits are felt highly unevenly, prompting those who have most to lose or gain to organise and get the best outcome for themselves.

Those hardest hit can use their number as leverage and as a rallying cry.  Those who have lobbied for Brexit and can be tallied in the ‘most to gain at the nation’s expense’ column can have their advice discredited.

I am sure it is partly for this reason that the government doesn’t want to release those impacts.

Even this aspect of the calculus – the distribution of Brexit impacts – is not impossible to guess in advance.  And it is ultimately knowable with, probably, as much accuracy as the analysis done by civil servants, if others outside the government were tasked with coming up with their own figures.  There is said to be material that is commercially sensitive redacted from the impact studies.  But I am sceptical that that would be of any great use for the economics.

But part of the motivation to force the government to publish, and part of the reason why it is resisting, relates to the disparaging of experts’ views on Brexit.

Although outsiders had told us all that Brexit was going to cost us, the government – except the Remainer Treasury, easily tarred as partisan – had not had to put it’s name to any numbers, and had thus far eased through with optimistic platitudes.  However, the real business of Brexit and government depends on numbers.  Impacts on government expenditure and revenue via the multifarious automatic stabilisers;  priorities for industrial policy and logistical government intervention:  all these require lots of numbers and government experts to produce them.

Once this material is out in the public domain, we can observe the government’s own experts confirming what we already know, roughly speaking.  And this isn’t just for show.

The final shape of Brexit is still up for grabs;  as is how far the government can push the strategy of contemplating a no deal in preference for a status quo transition.  The act of demonstrating to moderate, pro-Brexit forces how bad different Brexits will be, and where it will be felt hardest, and the risks run by no-deal brinkmanship could weaken resolve, make a smoother transition more likely, and moderate the deal struck at the endpoint. ‘We didn’t vote for this!’  ‘You knew this for months and had to be forced to tell us?!’

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1 Response to Brexit impact studies: the clothes of the emperor

  1. am says:

    #The original treasury impact study on a leave vote now in the bin. Of course they won’t do one again. Lots of economists signed up to this in a letter to the press but unlike the treasury they are still pretending they know what they are talking about.

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