Abstract

The biggest challenge an economist can face is not answering a difficult theoretical question but introducing reforms and making the day-to-day policy decisions that will prove that a theory works. Often, however, the theory does not work. The next challenge, then, is to modify the theory or to keep trying to change the reality. Because in the real world, far from the ivory tower of academia and elegant models, political life is brutal. What matters is political power, not just logical arguments and statistical evidence. In a classroom or at a conference, it may be enough to be right and to be able to prove it in a scholarly way; policymakers, however, need a majority in the parliament and, more important, social and political support for reforms.