Dissent is a sterling asset
Sir Alec Issigonis, the designer of the Mini and the Morris Minor, once declared the camel to resemble “a horse that was planned by a committee”. He has a point: this column wasn’t written by a committee either.
The risks of committee thinking were highlighted in 1972 by the psychologist Irving Janis in his famous analysis of the role of “groupthink” in the Bay of Pigs fiasco. Groupthink is the tendency of committees to congeal around a particular point of view, reassured by the fact that everybody agrees with everybody else, and nervous about expressing dissent.
A more abstract demonstration, if a powerful one, was delivered in the 1950s by the psychologist Solomon Asch. Asch showed his experimental subjects four lines and asked them to say which two of the four were of equal length. When the hapless subjects were surrounded by actors pretending to be doing the same task, and blatantly delivering the wrong answer, many of the real experimental subjects fell in line with the group, and expressed clear signs of stress as they did so.
But don’t knock the humble committee too much. Get it working in the right way, with the right people, and you have a powerful institution. The risk of committee thinking, as Janis and Asch demonstrated, is that – paradoxically – a group of people may end up considering fewer alternative points of view than a single person. Surely that’s not inevitable.
Groupthink is not usually a topic for economists, but the fact that much monetary policy is now made by committees has attracted their attention. Christopher Spencer of the University of Surrey studied the behaviour of the Bank of England’s monetary policy committee, which has five “internal” members, chosen from the bank’s staff, and four “external” members, appointed for one or two terms from elsewhere. Spencer found that external members were much more likely to dissent from the majority opinion.
Stephen Hansen and Michael McMahon recently published research that attempted to disentangle the reasons for the dissent. It could be simply that external members have a dovish bias towards cutting interest rates, which is why they tend to be out of step with the majority. Or it could be that they are more sensitive to market conditions – more “expert”, perhaps. Hansen and McMahon believe, based on an analysis of when external members dissented, that both of these things are true.
Hansen and McMahon worry that dissent might not be terribly helpful – if it is based on a dovish bias, or if external members are simply dissenting to gain a reputation for intellectual superiority, then that might be something to worry about.
I (ahem) disagree. It’s easy for an economist to undervalue dissent for the sake of dissent. Irving Janis argued that someone should always play the role of devil’s advocate, and different people should play the role at different times. (Alas, the Catholic church, which invented the idea in the late 16th century, abolished the office in 1983.) Asch’s experiments showed that if there was a single dissenter in the room, the experimental subject was far more likely to resist social pressure and pick the correct pair of lines. This was true even if the dissenter himself was also wrong. What mattered was that he said something different.
So let’s hear it for dissent. The Bank of England has had its own dissenter for a few months now: throughout the summer, Andrew Sentance was in a minority of one in consistently voting for interest rate hikes. He’s an external member, nearing the end of his final term on the committee: the perfect conditions for healthy disagreement. I have no idea whether Mr Sentance is right, but I am glad he’s there.
Also published at ft.com.