Evidence-Based Dynamic Effects of Socio-Economic Policies in Public Budgeting

How and why has the estimation of dynamic socio-economic effects of policies shaped political decision-making? To address this question, the chapter first presents the prospects and challenges to a rationalist model of evidence-based policy. The chapter shows that criteria developed by the Ministry of Finance for including the dynamic socio-economic effects of policies in forecasting and budgeting have been important for which types of evidence are utilised in socio-economic policy decisions. Despite critiques of the evidence considered when estimating dynamic effects, it is argued that socio-economic policy modelling is a case of evidence-based policy in which evidence has successfully incentivised and shaped formal political decision-making.