What does it mean to be influential? The Institute for Fiscal Studies

28 March 2016

Last year, Semana Económica, a Peruvian magazine, asked me to write a short article on what it meant to be an influential think tank -as part of a series of opinion pieces on their most recent power survey.

This is not as straight forward as one might think. Being influential isn’t a clear-cut state of things: it is not the same as being big or small; new or old. These characteristics have an inherent relativity to them but we can all make a  judgement -and we are all likely to agree that a 100 person think tank is big while one with a handful of staff is small.

But, influential? Who is influential?

In writing the article I kept coming back to a phrase used the the British media in the last elections (in 2015) to describe a London-based think tank (relatively old and medium-size): “The reputable IFS” or “the independent IFS“. This is how various media outlets referred to the Institute for Fiscal Studies, IFS, when quoting their experts or the think tank’s opinions.

Usually, the media refers to think tanks as “a think tank” so and so. And it often does this in a way that leaves you wondering if the label is being used in a derogatory way.

But in this case, it set the IFS apart from the rest by establishing that the think tank was “reputable” and “independent”.

Last week Simon Akam published a profile of the IFS for The Guardian. In it, he described how the IFS has become what he describes as the” umpire” of economic policy debates. How was it that no budget statement day is complete without the media turning to the IFS for its expert opinion?

The British policy community (with all its problems) is one of the most exiting, open, and informed  that I have come across. Policy announcements are never taken at face value. They are forensically dissected by economic editors, political editors, pundits of all sectors, the general public, NGOs, activists, think tanks, and the like. But something happens when the IFS, at least on economic policy, steps in:

“It is quite extraordinary in a way that it is regarded as the ultimate authority,” says Robert Peston, the former economics editor of the BBC and now the political editor of ITV news. “Basically, when the IFS has pronounced, there’s no other argument. It is the word of God.”

It is quite extraordinary not least because the IFS isn’t that old (it was set up in 1969) and struggled to find a space in the British policy community for much of its first decade in existence.

The IFS is economics heavy but not heavy on economics. It’s 60 strong team is made up of 40 full-time, and rather young, economic researchers. They are recruited straight out of undergraduate or master programmes rather than from PhDs. Senior researchers are mostly part-time advisers with multiple affiliations.

This team delivers one of the most effective think tank outputs possible: on budget day, the UK political establishment turns to the IFS for an evaluation of the government’s statement.

On Budget Day

The IFS, according to Akam, does not get any advance information. It has to wait for the Chancellor’s Speech just like everyone else.

But once the speech has been delivered the organisation goes into overdrive. One team looks at the big picture of the proposed spending. A second team focuses on distributional analyses of the budget. And a third team focuses on local government and devolution.

The Director and his Deputy oversee the process. They place calls to the Treasury to seek clarifications and check their facts. Why, you might think, would the Treasury answer their questions? Do they not fear their “ruling”?

One former Treasury official told me that there was always “an open line with a junior nerd at the IFS” on budget day, pointing out it is in the interest of neither side to get detail wrong.

The day finishes late -early in the morning of “The IFS Day”.

The IFS Day

It starts with the Today Programme (for non-Radio 4 listeners, this is the go-to-news programme every morning in the UK). Then by mid-day the IFS team is ready for a press conference with the UK political and media establishment -270 or so of them, according to Akam’s account of the last IFS Day.

The IFS turns a political event (one on which it has little or no influence what so ever) into an opportunity to set the agenda. This approach of targeting policy windows can be very effective for relatively small think tanks -especially those with a clear focus of expertise.

But being able to undertake excellent and quick analysis is not enough. According to Akam, the IFS’s formula also includes:

  • The IFS works with the media -and helps the media to do a better job. And as a consequence it is the go-to-think tank for the media on budget day and on any other occasion when economic policy expertise is needed.
  • The IFS focuses on the micro (microeconomics) thus avoiding the perils of big picture political statements. This has helped it to develop a strong view of being bang in the middle of all political debate. They are perceived as being data driven. This is alright as a strategy buy maybe not that good in terms of its contribution to the political debate. + On the upside, though, it means that the IFS’s messages are not just attractive for the well-informed pundits; the public can also relate to it. It speaks to them, too.
  • The IFS is not outside politics and maintains long term personal and profesional relationships with political and policy figures.