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Intelligence and Economics - Two Disciplines With a Common Dilemma

Intelligence and Economics - Two Disciplines With a Common Dilemma



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Published by: Silendo on Oct 15, 2008
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Intelligence and Economics: Two Disciplines with a Common Dilemma
Ohad LeslauDivision of International RelationsSchool of Political ScienceHaifa University, Israelohad@idi.org.il
Paper Prepared for the Annual Meeting of the International Studies AssociationSan Diego, California, March, 2006
At first glance, economists and intelligence makers seem to operate in separate spheres,one dealing with economic problems, the other investigating security matters. Theeconomist works with overt data, while the intelligence maker's data may be secret. Theeconomist's estimations are based on quantitative and formal methods, while theintelligence maker often makes assessments based on speculation and 'gut feelings.'Despite this apparent dichotomy between economics and intelligence, an attempt to link them was made over thirty years ago. Harold Wilensky devoted a chapter of his book,
Organizational Intelligence
(1967), to this connection. He believed that members of thesetwo disciplines could learn from one another, and thereby improve their effectiveness inthe governmental bureaucracy. Although the importance of Wilensky's book is widelyrecognized, the interdisciplinary connection has not been pursued. This researchreexamines Wilensky's concept.The article focuses on the similarity between the economist's job and that of theintelligence maker vis-à-vis decision makers. These two types of professional advisorsface a similar dilemma in their work for the government: should they be loyal to theiremployers' -- the highest echelon of decision makers -- or to their professional ethics? Asimilar debate evolved in the literature of both economics and intelligence studiesregarding this dilemma. After introducing this debate, this article will examine how itinfluenced and was influenced by the Central Intelligence Agency (CIA) and the Councilof Economic Advisors (CEA). In the following section of the article, characteristicscommon to both disciplines will be identified; this helps explain why so similar a debateemerged in both spheres.
The decision maker- professional adviser interface: the traditional-activist debate
The relationship between the decision maker and the professional advisor is oftendescribed as 'the interface between power without knowledge and knowledge withoutpower' (Harkabi, 1984). On the one hand, the decision maker has the final word onpolicy, but he lacks the skills and information to choose the best policy. On the otherhand, the professional advisor has no power to compel a specific decision; but he has abreadth and depth of knowledge about the situation not possessed by the policy maker.
This imbalance creates a question regarding the main duty of the advisor. Is his highestduty is presenting information and its consequences according to his professional judgment; or is it focusing on suggesting a preferred policy to achieve the decisionmaker's goals. Ideally, there is no conflict between the two duties. After all, the advisorcould assist the decision maker both in analyzing the current and future developmentsand in choosing the best policy to cope with it. This is true, as long the advisor and thedecision maker share the same views. Let us imagine a situation in which the analysis of the professional advisor is inconsistent with the view of the decision maker. By persistingin presenting his analysis, the advisor may run the risk of becoming
 persona non grata
inthe close circle of the decision maker. In this case, the advisor would keep his duty in thefield presenting his professional opinion, but will loss his duty in the field of policy. Onthe other hand, if the advisor will adjust his opinion to the views of the decision maker,he might retain impact in the policy field, but will lose his ability to express hisprofessional analysis of the situation.Scholars in both fields -- intelligence and economics -- were quick to acknowledge theseconflicting duties. Two approaches eventually evolved: the traditional doctrine and theactivist doctrine.
 The traditional doctrine
. This doctrine claims that the main duty of the high rank professional advisor is to present his professional analysis. This task can be doneproperly, only when the advisor avoids entering the policy field. As John Huizengatestifies, "Intelligence people must provide honest and best judgments and avoid intrusionon policymaking or attempts to influence it" (Church Committee, Book 1: 266-7).Many intelligence scholars have taken this approach, among them Sherman Kent (1966),Yehoshafat Harkavi (1984) and Michael Handel (1987). Economists like Alan Peacock (1992) and Charles A. Schultz (1996) also embrace views that can be identified with thetraditionalist doctrine. 
The activist doctrine
. Against the traditionalist's view, the activist doctrine claims that themain duty of the advisor is assisting the decision maker to choose the appropriate policyto his goals. Accordingly, the advisor should be actively involved in the entire decisionmaking process. Furthermore, he should be aware of the objectives of the decision maker,
There are many names to this debate in the area of intelligence study e.g. the 'objective-actionable' debate(Westerfield, 1996). For another description of this debate see Hulnick, 1987; Betts, 2003. Descriptions of this debate in economics see: Heller, 1966; Stewart, 1989; Coats, 1981.

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