Government Economic Service - Introduction and Application Process
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The document provides information about the work of economists in the UK government. It discusses how economists work to improve market efficiency and equity through regulatory impact assessments and business cases for government spending. Economists evaluate existing policies and work across departments to apply economic theory to areas like taxation, welfare and industry regulation. The career progression for economists and application process for the Government Economic Service are also outlined.
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Government Economic Service - Introduction and Application Process
- 1. GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES UNCLASSIFIED
- 2. GES presentation •Economics of Government intervention •What economists in government do •Application process We won’t duplicate the information online: http://www.civilservice.gov.uk/networks/ges https://www.gov.uk/faststream GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Faith Bannier Intellectual Property Office Alex Shirvani Department for Business, Innovation and Skills
- 3. Economics of Government Intervention Government intervenes in the market for two reasons GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Efficiency Equity Making the optimum use of scarce resources Addressing market failures to create Pareto improvements Non-political: doesn’t make value judgement on what is right An ‘efficient’ distribution may involve considerable inequalities Redistributing resources to offset inequality Political: involves democratic judgement on what is ‘fair’
- 4. Efficiency interventions First rule of welfare economics: A perfectly functioning market will lead to a Pareto efficient outcome: •The right factor mix of inputs is used in production •The right things are produced, given existing inputs •Things are consumed by people that value them most We can’t usually get a ‘Pareto optimum’ but we can make Pareto improvements when we make markets work better GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 5. Efficiency interventions When markets work better the UK is better off •We produce more with the resources we have – GDP is higher •We make sure our input factors are utilised better – More people have jobs, and jobs better suited to their skills •We produce the right things (comparative advantage) – We can sell more exports •Consumers have greater choice – People buy things that improve their personal welfare GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 6. Efficiency GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 7. Market failures Sometimes free markets won’t achieve Pareto efficiency GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Imperfect competition Natural monopolies, transport, energy markets Externalities Negative: pollution, things with bad health impacts Positive: spillovers from R&D, social benefits from education Asymmetric information Healthcare, credit markets, insurance, quality/safety of goods Public goods National defence, street lighting, national justice system
- 8. Tackling market failures GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Information, education and advice Publishing league tables, crime stats, public education campaigns (‘talk to Frank’), labelling, advisory services Direct provision Government directly providing policing, armed forces, bird flu vaccine Economic instruments Taxes, user charges, subsidies, grants, tax credits, tradable permits, loan guarantees Regulation and legislation Regulation of rail fares/utility prices, compulsory motor insurance, trading standards, health & safety laws, banning tobacco advertising
- 9. Tackling market failures GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES http://www.ei-lat.ge/images/doc/understanding_policy_options.pdf For further information read the Home Office document “Understanding policy options”
- 10. Equity interventions A Pareto efficient outcome might not be seen as ‘fair’ It is Pareto efficient if one person has everything! Government may also intervene for reasons of ‘equity’ (ie redistribution of wealth) to tackle social deprivation •Free prescriptions •Extra money for schools in deprived areas •Fee incentives to encourage access to HE to students from less well off background Equity interventions depend on political/moral viewpoints GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 11. What economists in government do There are two main types of government intervention GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Regulatory Spending Westminster/devolved government/EU brings in, changes or scraps a regulation Economists look at the impact of the regulatory change (costs v benefits) This is called an Impact Assessment The Treasury allocates money at fiscal events (Autumn Statement, Budget, Spending Review) Departments bid for money from the Treasury to finance their spending projects Economists help put together Business Cases for these bids
- 12. Impact Assessments A regulatory change has benefits and costs Example: proposal to introduce minimum alcohol unit price GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/157763/ia-minimum-unit-pricing.pdf Benefits: improved health, reduced NHS costs, reduced alcohol-related crime, reduced lost productivity due to alcohol (total: £21bn per year), some businesses will gain (eg pubs if people substitute from cheap supermarket alcohol) Costs: higher prices to consumers, low income consumers especially affected, businesses face familiarisation, transition costs, exchequer may face reduced tax receipts
- 13. Business cases Establish the rationale for the spending (market failure) Build an NPV model of the expected value to the economy This will involve several assumptions – these must be underpinned by evidence (academic research/evaluations of similar policies) •Total economic costs: exchequer cost plus leveraged private spending •Expected returns on the investment •How much of the returns are additional (not displacement, deadweight, leakage, substitution) •Wider benefits: including spillovers, positive externalities GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 14. Policy evaluation Impact assessments and Business cases are examples of policy appraisal – done before the policy is brought in After the policy is brought in evaluation tells you how well it worked/is working Various evaluation techniques: randomised control trials, quasi-experimental methods, difference in differences Key point is establish the counterfactual (what would have happened if the policy wasn’t brought in) and estimate the difference, eg increased output, jobs, improved health GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 15. The Green Book GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES For further information on appraisal and evaluation techniques https://www.gov.uk/government/publications/the-green-book-appra Parts to read before the Economic Assessment Centre: -Chapter 3: Justifying action -Annex 1: Government intervention (explains efficiency/equity and gives you definitions of all the market failures) -Annex 4: Risk and uncertainty -Annex 6: Discount rate
- 16. Other things economists do GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Writing evidence papers Writing a published/unpublished paper on the evidence base for a particular theme Managing external projects Develop a research theme/evaluation, draw up an invitation to tender, assess bidders, award contract and manage the contractor up to publication Economic support for Ministers Written and oral Parliamentary Questions, briefings and submissions, briefing on pre-release statistics
- 17. Career path Assistant Economist (£26k-32k) - Rotate jobs every year in your department - After 2 years can move department - After 2 years may be opportunities for funded MSc Economic Adviser (Grade 7; £45k +) - No longer rotate jobs - Significant responsibility, lots of economics Grade 6 - Still an economist but more ‘strategic’ role Senior Civil Service GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 18. Application process Apply for the Economist option on the Analytical fast stream https://www.gov.uk/civil-service-fast-stream-how-to-apply GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 19. Economic Assessment Centre GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Go to the EAC Open Day Technical report 30 mins to type answer on pre-released question written for economists Plain English report 30 mins to type answer on pre-released question written for non-economists Short Answer Q’s 30 mins: 10 questions on variety of micro and macro Interview 20 mins: short presentation on answer to pre-released question (with follow-up questions from interviewers) 20 mins: questions on SAQs (to help you gain marks) 20 mins: question on your chosen specialised topic You will be given a pre-released question a few weeks before the EAC date
- 20. Fast Stream Assessment Centre UNCLASSIFIED Group Exercise 45 minutes : Discussion in a group of 5/6 to defend your policy option Policy Written Exercise 90 minutes: Read a pack of information and write a report to recommend one of two policy options Leadership Exercise 30 minutes to prepare: how you would lead a team to solve a problem 10 minute presentation, followed by questions. Interview 45 minutes: evidence of something you have done in the past, measured against competencies (Use STAR structure) GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 21. Application timetable Apply in either Round 1 or Round 2 You can only apply in one round per year, so if you are apply in Round 1 and are unsuccessful you have to wait till Round 1 next year, you can’t apply in Round 2 as well. * Dates may change! GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES Round 1 Round 2 Open for applications (next one Sep 2016) 1 Feb 2016 Application deadline 30 Mar 2016 EAC 18 May – 17 June 2016* FSAC 11 June – 22 July 2016*
- 22. Student placements The GES provides year-long sandwich student placements and 6 to 12 week summer internships To be eligible 50 per cent of your course must be in economics and you must be on track for a 1st or 2:1 First year undergraduates aren’t eligible Summer placement applications usually open December/January GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES
- 23. Find out more 1.Check out the GES and Fast Stream websites 2.Check out the Green Book and Understanding Policy Options • If you can’t access them online, email me for the pdfs 1.Look at the Economy part of the ONS website • Follow on Twitter / like on Facebook 1.Look for Nicholas Barr’s book The Economics of the Welfare State Contact for questions: faith.bannier@ipo.gov.uk alex.shirvani@bis.gsi.gov.uk GOVERNMENT ECONOMIC SERVICE Making economists better Making better use of economics GES