When Do You Get Economists as Policy-Makers?

When are “technically competent” economic policy-makers appointed? Our model considers when a specialist in economics is preferable over a generalist with more political skills (demand) and when such individuals are available (supply). We analyze educational and occupational background data for 1200 policy-makers from EU and OECD democracies since 1973. Eurozone leaders are unlikely to have an economics education. New democracies and presidential systems select more technically competent finance ministers. The longer a government is in office, the less technically competent are finance ministers appointed, with the reverse pattern for central bank governors. Left leaders appoint central bankers with more economics training than right ones, while finance ministers from right parties are more likely to have a financial industry background and less economics training. We also examine whether banking, currency, and debt crises affect appointments. There is some evidence for a link, but these findings are less robust.