Thursday, 9 June 2011

Negotiating truth

Tom McDonnell: The FT makes an important point about the supposed independent country assessments produced by bodies like the IMF and the OECD.

These are 'negotiated' documents and consequently are not independent.

Worth bearing in mind the next time you hear a journalist reporting, or Government minister boasting, about a positive forecast or review.

Or indeed claiming that a 'programme' is on track...


Michael Burke said...

Useful reminder, Tom.

We could also judge their assessments in the light of reality too. So, in July last year the IMF's assessment was that the Irish economy was poised for recovery,with a resumption of growth expected in H2

and that the then government's efforts to cut spending had already started to build confidence

"some of that confidence-building is already occurring, offsetting, in part, the short-term contractionary effects on the economy".

Tom McDonnell said...

It is difficult to have much confidence in these documents. Of course the IMF also famously praised our banking sector and our regulatory regime in 2006.

As to intellectual coherence. In one document they talk about spending cuts increasing confidence (remind me which units confidence is measured in) and around the same time they produce a major piece of research debunking expansionary fiscal contraction.

It is easy to see why Governments hate the Ratings Agencies: they cant doctor the analysis.