Economic Reasoning and Social Policy

Abstract

There is growing consensus that in the 21st century, broad based economic growth with social harmony would be difficult to pursue without progress in social development. This paper focuses on how incorporating economic reasoning in social policy analysis and discussions could assist in improving design, implementation, and assessment of social programs and schemes. Such incorporation could contribute to better societal outcomes and effectiveness of social policies. The paper provides three inter-related frameworks, for thinking about household welfare, for generating fiscal space, and for diagnosing overall economic growth, or for sector specific constraints, which could be applied to specific contexts of social policy. Their application could assist in pursuing social policies in a more systemic and integrated manner, with requisite understanding of the trade‑offs involved in social policy choices.

Note: This paper was presented as Keynote Address to 12th East Asian Social; Policy (EASP) Conference, "Social Policy and Governance in East Asia" in Singapore, July 30-31, 2015.

Keywords: social policy, economic reasoning, household welfare, fiscal space, growth diagnostics