Preliminaries

What was Tony Blair's economic legacy? Inferring the economic effects of government policy is never an easy task. We need to ask how things would have differed had policies been different. Posing that counterfactual faces challenges. There are many other influences on events, apart from what government does. Economic entities depend on choices made by countless households and firms, and these in turn reflect their resources, technologies, unobservable expectations and beliefs about future policy (and other aspects of their environment). None of these are set in stone. Then there is the speed of impact. Sometimes economic policy has quick effects. And some variables can overreact. Often, though, repercussions take many years to work out in full. This is especially true of government decisions that influence the supply side of the economy. Add to this the fact that figures we have for many of the key economic variables are measured with error and subject to regular revision. So the economic record for a recent period that we have to hand now may be seriously inaccurate, distorted by a host of other factors, and barely affected by what governments did or did not do within that interval.

Politicians claim credit when things go well. They seek scapegoats to exculpate themselves when they do not. So their own statements, and the briefings and announcements of their news managers, may give no sound basis for judgement.