by Economics — a science in need of a realist methodology What enables and yet constrains research? What is both medium and outcome of research? What do researchers reproduce without even knowing it? What is supposed to unite researchers but may divide them? What empowers researchers to speak but is never fully articulated? What is played out in the routine of research but can never be routinised? What is the responsibility of all researchers but for which none has a mandate? The answer to all of these riddles is METHODOLOGY. What Pawson says is not only true for ‘evaluation science’. It does apply to science at large, and certainly also to mainstream economics, whose methodology — more than anything else — is at the root of its manifest failures. The field
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Economics — a science in need of a realist methodology
What enables and yet constrains research? What is both medium and outcome of research? What do researchers reproduce without even knowing it? What is supposed to unite researchers but may divide them? What empowers researchers to speak but is never fully articulated? What is played out in the routine of research but can never be routinised? What is the responsibility of all researchers but for which none has a mandate?
The answer to all of these riddles is METHODOLOGY.
What Pawson says is not only true for ‘evaluation science’. It does apply to science at large, and certainly also to mainstream economics, whose methodology — more than anything else — is at the root of its manifest failures.
The field of economics has long been hailed as a bastion of rationality and objectivity, offering insights into the workings of present-day complex economic systems. However, questions about the foundations of economics and its prevailing methodological approach have to be raised. Methodological progress presupposes a — as Donald Campbell once had it — “disputatious community.”
The fixation on constructing models showing the certainty of logical entailment has been detrimental to the development of relevant and realist economics. Insisting on formalistic (mathematical) modelling forces the economist to give up on realism and substitute axiomatics for real-world relevance. The price for rigour and precision is far too high for anyone who is ultimately interested in using economics to pose and (hopefully) answer real-world questions and problems.
This deductivist orientation is the main reason behind the difficulty that mainstream economics has in terms of understanding, explaining and predicting what takes place in our societies. But it has also given mainstream economics much of its discursive power – at least as long as no one starts asking tough questions on the veracity of – and justification for – the assumptions on which the deductivist foundation is erected. Asking these questions is an important ingredient in a sustained critical effort to show how nonsensical the embellishing of a smorgasbord of models founded on wanting (often hidden) methodological foundations.
My critique challenges traditional assumptions and argues for a more pluralistic and realistic understanding of economic phenomena.
• The problem of formalism
One of my key criticisms centres around the excessive reliance on formal models and mathematical abstractions within mainstream economics. The discipline’s preoccupation with mathematical rigour often leads to a detachment from real-world complexities, rendering economic models divorced from actual human behaviour. Economists should embrace a more open-ended approach that acknowledges the limitations of formalism and places a greater emphasis on empirical observations and qualitative analysis.
• Assumptions and simplifying idealizations
Many assumptions and simplifying idealizations underpin mainstream economic models — perfect rationality, market efficiency, and equilibrium — do not accurately reflect the messy realities of human decision-making and market dynamics. Economists must have a more nuanced understanding of human behaviour that acknowledges the presence of bounded rationality, social norms, and institutional constraints. By incorporating these factors, economic models can better capture the complexities of economic systems.
• Pluralism and interdisciplinarity
Economics should embrace a more pluralistic approach, drawing insights from various disciplines such as sociology, psychology, history, and ecology. By integrating diverse perspectives, economists can develop a richer understanding of economic phenomena and avoid the pitfalls of narrow and reductionist thinking. Complex problems require holistic and multidimensional approaches.
• Policy implications
Overlooking real-world complexities and relying on overly simplified models — typical of mainstream economics — can lead to seriously misguided policy prescriptions. A more context-sensitive and pragmatic approach to policy-making — taking into account the specific institutional, cultural, and historical factors at play — is needed. This shift in policy orientation can lead to more effective interventions and address the concerns of more or less marginalized communities that are often excluded from mainstream economic discourse.
• Advancing the discipline
While mainly posing challenges to the foundations of mainstream economics and the severe real-world limitations of its methodology, my critique also provides an opportunity for the discipline to evolve and grow. By embracing a more pluralistic and realistic framework, economics can address the criticisms and broaden its analytical toolkit. This would involve reevaluating many standard approaches, fostering interdisciplinary collaborations, and promoting critical engagement with alternative heterodox economic theories. Challenging the dominance of deductive-axiomatic formalism and advocating for a pluralistic approach also create space for a more realistic and nuanced understanding of economic phenomena. This is necessary if we want to reimagine economics as a discipline that is more in tune with the complexities of the real world and better equipped to tackle the pressing social and economic challenges we face today.