Economic Policy

Formulation Process

November 5, 2021

By Itzel Angelika VARGAS SERRATA, 2021 GMPA Student(Public Management and Public Sector Reforms)

Economic Policy; How is it, and should it be, formed?

Practicality to minimize cons and maximizes pros in the economic policy making process is consider the main point by Deputy Minister Ilho Yoo; who summarized his lecture with three subsequent questions: “Is the market perfect? Yes! Under certain conditions, why do we need policy if so? Because market fails needs for income distribution and macroeconomic policy. Then, how should it be done? Practicality”.

Another Key factor highlighted during the lecture was the opportunity cost, defined as what will not be earned by taking a different decision; taking examples in Kobe Bryant and Rush Limbaugh which decided to keep on their careers, the first leaving behind the opportunity of a better higher education and the former the opportunity of running as a public official. In the case of policies, many groups of people in society can benefit from a policy while other groups of people will get harm and/or oppose the policy. The problem with carrying a policy is to deal with this harmonization; any kind of policy has those pros and cons, and a well-made policy has to minimize the cons and maximize the pros.

The Government was also highlighted by Professor Yoo due to the main three roles in regarding of economics. Income Redistribution (Welfare Policy) that became necessary after the great depression, Macroeconomic policy and Market Failure that happens when the conditions for a perfect market are not satisfied, however, this failure does not ensure the success of the government which can also fail.

Mr. Yoo wrapped his lecture by giving the participants some points to have in consideration in the Economic policy making, between those the followings: leadership should depend on the system, meetings should be actively used as well as dialogues with other groups and to have in consideration that Staffs’ opinions should be regarded highly in shaping details of policies. One particular advise for developing economies was also given: to fight corruption in order to improve the economic system which I particularly found very interesting to be the first step to take in order to achieve a better economic system. I am sure that those valuable words will stay in our minds and will be put in to practice when we return to our labor as public officials in our countries.