Introspection

Rat in a Cage: A Convenient Journal

The reason why I started blogging was rather simple – I found it to be an ideal creative outlet and a convenient journal to track the flow of my ideas and the interesting things I found. I often find myself with many pent up ideas; ideas which are not as formal and lengthy as they are worthy of proper investigations and penned down as research reports (which would take weeks), but not as trivial as those that normally get chatted away on IM sessions - ideas that I personally feel to be tad wasteful to be forgotten.

What I didn’t expect, however, is that blogging (although I have only started blogging for a very short while) allowed much introspection on some of my beliefs and ideas. I mentioned about my Weltanschauung or worldview in my first post and how important it is for me. Looking through some of the seemingly disparate posts, coupled with some very helpful feedbacks, has somehow helped me to gain some clarity and coherence on the development of my worldview and that some of my separate interests and convictions are in fact part of a larger theme.

The World is a Vampire: Making Decisions

Personally, I am getting more and more convinced that three principles are absolutely crucial when it comes to decision-making, especially on matters pertaining to economic and public policies (although definitely not limited to these – I often find myself thinking along these principles when pondering on issues relating to management, people and relationship… and more). These principles are both interrelated and mutually reinforcing. With the reverse principles in parentheses, they are:

1. Humility (Hubris)

The first thing that is needed when considering issues such as public policy is to be humble of our knowledge. We need to appreciate firstly, that our existing knowledge, as vast as it is, is limited and many gaps exist. Secondly, we must never underestimate the complexity of the real world/situation, both in the breadth of interdependency and the dynamism of its evolving nature. Formal and established understanding, in the form of theories and existing literatures, should always be in the forefront, but local knowledge and more nuanced and specific understanding to the situation should never be ignored.

2. Flexibility (Dogmatism)

With humility, it is easier to have greater flexibility in assessing a situation and making decision. It also makes you less susceptible to dogmatism; advocating a certain school of thought, belief or conviction doggedly regardless of circumstances. When it comes to making decision on practical and specific issues, being an informed centrist is important – flexibility often dictates the success in assessing a situation, formulating a policy and implementing the decision. This is made more crucial in economics, development and public policy due to the nature of the current state of our understanding of how the real world works. Instead of a handful of simple and clear-cut laws that tell us what to do and what to expect, most of the time, we have a hundred competing tendencies and possibilities, of uncertain strength and, quite often, direction, with little guidance as to how to add them up. We can explain every fact many times over, with the result that there is very little left that we can both believe strongly and act upon (Banerjee, 2007). Thus, while it is important to identify higher-order principles involved at a sufficient level of generality, the challenge is to have the flexibility to fashion specific blueprints that are suited for the local context – that is to have decisions inspired by formal knowledge but grounded firmly on realities (Rodrik, 2006A).

3. Objectivity (Bias)

Alongside humility and flexibility, being objective is paramount in making decisions. Humans are naturally biased in their perception and particularly, most people with power are prone to overconfidence in what they believe in. Coupled with hubris and dogmatism, this often leads to the dangerous slide to self-delusion. Often, erroneous and misinformed policies are made and perpetuated by the inability to accept and appreciate their failings.

Objectivity is crucial for two broad reasons. Firstly, I am convinced that there is no single grand narrative that is able to provide an elegant and complete explanation to any particular issue, event or phenomenon, especially complex ones. Almost all the time, it is the collection of small tales that explains the whole story. Thus, any attempt to view any complex issue through the lenses of any single convention based on dogmatic conviction will prevent us from appreciating its subtleties and ultimately reduce our ability to comprehend the issue in its entirety as well as. The danger arises when this narrow comprehension is used as a basis to come up with remedies or policies. Secondly, objectivity allows us to effectively and dispassionately assess the efficacy and success of our implemented decisions without bias. Especially given the uncertainties and the limitation of our knowledge, it is absolutely crucial that a policy that does not work is recognised, accepted, discarded and replaced quickly (Rodrik, 2006A). Perpetuating an ineffective policy is not just redundant; it is also wasteful and could potentially exacerbate the very issue it is trying to address. Cliché as it may sound, learning from our mistakes is one of the best way to improve ourselves.

No doubt, my thoughts on this will definitely evolve further as I learn more and gain further experience in the future. That said, I am fairly convinced on the broad principles outlined above as desiderata in any decision-making process, especially pertaining to broad-ranging issues such as economics and public policy.

Elanor

References

Banerjee, A. V. (2007), Inside the Machine – Towards a New Development Economics, Boston Review.

Rodrik, D. (2006B), Goodbye Washington Consensus, Hello Washington Confusion?, Harvard University.

Rodrik, D. (2006A), What’s So Special About China’s Exports?, Harvard University.