After four decades in the classroom, a George Mason University macroeconomics professor is putting theories into practice that could change the economic future of Scotland and the lives of its 5.5 million citizens.
Andrew Hughes Hallett is one of three commissioners on the Scottish Fiscal Commission, “sort of like the Congressional Budget Office but with a bit more teeth,” he says in his office at the Arlington Campus of George Mason’s School of Policy, Government, and International Affairs. The commission’s work—an intensive study of how money moves to and from public coffers in Scotland and in England—will help shape the debate when Scotland’s citizens vote on September 18 to become a sovereign state again, or not.
The scope of the opportunity is not lost on the professor.
“Very few economists who work at universities ever have their hands on an economy for real,” he says. “On paper and in books it’s all abstract. I know what I’m talking about in that context. But I’ve never actually done it.”
When his work is done in Scotland, he will return to Mason with an exceptional set of high-level experience to pass on to his graduate-level students. Regardless of the outcome of the September referendum, he says, “you get your hands on the economy and actually run it. This is not normal; it usually only happens with central banks.”
“Hughes Hallett’s appointment showcases the real-world impact that leading policy scholars can have on major public policy issues,” says acting dean of Mason’s policy school Mark Rozell. “Mason policy students learn not just academic theory, but the practice of public policy from some of its most important thinkers and practitioners.”
There is another benefit to Mason regarding his appointment as a commissioner: a higher international profile. Hughes Hallett joins commission leader Lady Susan Rice, the managing director of Lloyds Banking Group of Scotland, and Campbell Leith, a macroeconomics professor at Glasgow University.
“I’m afraid Scotland is not as big as, say, China, which would get a lot of attention,” he says with a laugh. “But [the appointment] is at an interesting time in Scotland because it’s come just at the moment of the independence vote.”
Economists are essential in developing the framework a newly independent nation will live by, Hughes Hallett says, “because economists can offer a much wider view, and because they are not tied to a particular political background.
“Of course, the policies have to come out of the democratically elected government,” he says, and while the commission can make predictions, it cannot make formal recommendations. “You can’t say ‘we think it would be wiser to follow this policy because I prefer the outcomes.’ But we play an important role as kind of a watchdog. If the fiscal policy is in the hands of your government and your government is the only organization policing the fiscal policies, they’re left in the position of judging the success of their own plans, and naturally they say how wonderful it is.
“In the case of Greece, for example, that leads to certain problems. Given the debt crisis in the last five years in many countries, both the European Commission and the International Monetary Fund insist on having watchdog organizations.”
So far the numbers Hughes Hallett and his co-commissioners have crunched indicate the Scottish economy would be far more robust if taxes were not split between Edinburgh and Westminster, if there was no Scottish payment to the United Kingdom’s interest on debt, if Scottish citizens didn’t have to subsidize pensions in England, and on and on.
And how does he think Scotland will vote in September? The economist says he has no idea, although his smile indicates how he thinks it should go.
“I wouldn’t be able to call that for the simple reason that you’re being asked the ‘once every 300 year question,’” he says with a wry grin. “It’s not predictable.”
Write to Buzz McClain at bmcclai2@gmu.edu.