ABSTRACT
Policymaking all too often results in consequences that are different from its most immediate intended purposes. This is due to three main causes. One is that much economic analysis, when it is indeed used as a basis for policymaking, is of an excessively partial equilibrium nature and, consequently, fails to account for the complex iterations and feedback mechanisms among variables that appear, at first sight, only distantly related. Another is that policies are often defined in response to the political pressures of specific constituencies with narrowly defined and myopic interests. Consequently, the existing policy package is constructed piecemeal, with little global consistency. Finally, policymaking is commonly formulated as short-run responses to urgent economic or political crises. Little thought is given to the long-term consequences of these policies and to their consistency with other active policies defined in the context of previous crises.
