Policymaking for Posterity: Using the Four Ds to Help Build a Better Tomorrow

A New Working Paper by Harvard Kennedy School Professors Lawrence Summers and Richard Zeckhauser

Policy decisions made today can have profound effects on the realities of tomorrow – both political and economic – and how those decisions are made is critical. A new Harvard Kennedy School Working Paper, titled "Policymaking for Posterity," co-authored by Professors Lawrence Summers and Richard Zeckhauser, seeks to clarify how systematic analyses of long-term developments can inform the formulation of public policy.

“We believe that very long-run policymaking needs to be conceptualized differently than policymaking over shorter periods,” the authors write. “Equally important, we can never know what the future holds, but for the far future the uncertainties are massive.”

“Our goal is not to reach an ultimate conclusion regarding ‘the social discount rate.’ Rather it is to contribute to better policymaking for the very long run by identifying a range of considerations that should enter into society’s judgments about taking actions that will have important consequences for our relatively distant descendants,” they write.

Using climate change as a model, the authors conclude that “policymaking for posterity” must be formulating using the four Ds – discounting, disaster, distinction, and decision analysis.

“Economists and their fellow travelers have a comparative advantage for guidance on discounting and decision analysis. Scientists have deep knowledge on disasters, and can provide an assist on decision analysis. Philosophers and psychologists can supply insights on discounting and distinction,” Summers and Zeckhauser stipulate.

“Analyses that focus on merely one or two of the four Ds will be no more than a two-dimensional rendering,” they conclude. “Policymaking for posterity must be formulated for a four-dimensional world.”

Lawrence H. Summers is Charles W. Eliot University Professor. He served as the 27th president of Harvard University from July 2001- June 2006. From 1999- 2001 he served as the U.S. Secretary of the Treasury following his earlier service as Deputy and Under Secretary of the Treasury and as Chief Economist of the World Bank. Richard Zeckhauser is the Frank P. Ramsey Professor of Political Economy. Much of his conceptual research examines possibilities for democratic, decentralized allocation procedures. 

Read the full Working Paper on the Harvard Kennedy School website: http://ksgnotes1.harvard.edu/Research/wpaper.nsf/rwp/RWP08-040