In this think piece, ASI executive director Tom Clougherty reacts to each of the policies contained in the Lib Dem-Conservative coalition agreement.
In this study, Liam Ward-Proud analyses the accuracy of Treasury budget forecasts for GDP growth by comparing them with the ensuing growth. Examining three different types of forecast, some key trends are found in relation to the correlation, absolute errors and a bias towards overestimation in the sampled forecasts. The consequences for fiscal planning are then spelled out and a solution for mitigating the damage of inaccurate forecasting is put forward.
In this think piece Liam Ward-Proud examines two Congressional bills, one passed and one under Senate scrutiny, for their proposed reforms in relation to ‘too big to fail’ firms and the regulation of ‘alternative investments’. It is found that on neither issue do the bills get it right; in fact, the Senate bill manifestly enshrines the principle of taxpayer guarantees, showing no commitment to competitive markets. Both bills contain what are argued to be misguided and potentially futile attempts at regulating hedge funds and private equity dealers.
This briefing calls on the next government to pass an Economic Responsibility Act, which would place legally binding restraints on government’s fiscal policies. Specifically, it would: (1) cap government spending at one-third of GDP; (2) cap the budget deficit at 3% of GDP; (3) cap the national debt at 40% of GDP; (4) require that off-balance-sheet obligations were fully calculated and openly stated; and (5) allow government to borrow only to invest in capital projects, not to fund current expenditure. This briefing also recommends that new rules be introduced to limit government’s ability to raise taxes.
This think piece by economist David Simpson examines Gordon Brown's economic record, arguing that failures in the Labour government's monetary, fiscal and regulatory policy are responsible for the financial crisis and recession that have hit the UK economy over the past three years. As a result, says Simpson, the UK is condemned both to an effective standstill in the provision of public services and to increases in taxation that will affect all families, not just the rich.
In An international development policy that works: Why the Conservative Party should rethink its commitment to development aid Sam Bowman argues that the UK Conservatives have failed to propose the radical policy overhaul needed to make the Department for International Development (DFID) an effective body. He suggests scrapping the pledge to spend 0.7% of national GDP on international development aid each year, and focusing instead on private donations, economic migration and unilateral tariff reduction.
This think piece by ASI fellow Tim Worstall critically examines the National Equality Panel's 'Hills Report', with particular emphasis on its treatment of wealth inequality and the gender pay gap. He argues that not only have the report's authors directly ignored Office of National Statistics guidelines on how to measure the gender pay gap, but that they have also hugely overstated income and wealth inequality in the UK by failing to take account of the effects of the welfare state.
According to this briefing paper, proposals to introduce a new ‘bank levy’ would do little to correct the problems in the banking sector, and act as a distraction from other, more pressing reforms. Politicians ought to reject populist calls for new taxes and punitive regulation and instead focus on a few key issues: breaking up the nationalized banks; ensuring greater transparency and more honest accounting; requiring tougher capital and liquidity ratios; mandating living wills so banks can be run down in an orderly fashion; and moving derivative contracts onto regulated exchanges.
Government support for the arts is currently provided as a subsidy to producers. This system suffers from four major problems: it relies on an expensive bureaucracy; it distributes subsidies unequally between regions and income groups; it distorts producers’ incentives through corruption, politicisation and arbitrary criteria; and it reduces competition, innovation and efficiency. This paper proposes a new system for arts funding: consumer-side subsidies delivered as vouchers to all citizens, which would alleviate the four problems outlined above, and better fulfil the central objectives of art funding.
In The Broken University, education expert James Stanfield examines what is seen and what is not seen in the UK higher education sector. In contrast to the conventional wisdom, he finds no compelling evidence to suggest that public subsidies to higher education have any economic benefit. Moreover, Stanfield convincingly argues that once its hidden costs and unintended consequences are taken into account, government intervention in higher education is doing far more harm than good, and is holding back the development of one of the UK’s most important service sectors.