CPB Netherlands Bureau for Economic Policy Analysis

CPB Netherlands Bureau 

for Economic Policy 

Analysis: an introduction 

by 

Dr Edwin van de Haar 

Executive Secretary

Outline 

Good morning! 

• History 

• Organisation 

• Stakeholders 

• Output 

Research areas 

Publications 

Reputation 

Centraal Planbureau 

2 

July 2011

History (1) 

• Founded in September 1945 by Jan Tinbergen 

First Nobel Laureate in economics (1969) 

• Legally established on 21 April 1947 

‘Publish regularly a Central Economic Plan (CEP)’ 

relevant for economic, social and financial 

policymaking’ 

•Confusing: CPB has never been engaged in central planning! 

After World War II government helped rebuild the country 

Also need for sound analysis of business cycles 


3 

History July 2011

History (2) 

• Independent analyses for economic policy 

=> CPB Netherlands Bureau for Economic Policy 

Analysis 


4 

History July 2011

History (3) 

• 1946 

• 1947 onwards 

• 1961 onwards 

National Welfare Plan 

Annual CEP published in the Spring 

MEV published third Tuesday of September 

• 1953 

• 1960s 

• 1970s 

• 1980s onwards 

• 2000s 

First econometric macro-model 

Keynesian expenditure models 

Supply-side models 

Applied models for microeconomic policies 

CGE modelling 

• Over time 

Policy analysis of broader economic questions 

- Energy, globalisation and climate change 

- Education, health and innovation 


5 

History July 2011

History (4) 

65 th anniversary in September 2010 


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History July 2011

History (5) 

• The CPB is unique in the world 

CBO in US 

» CPB is more grounded in economic theory 

IFS in UK 

» CPB is less scientific and better embedded in policy making 

German institutes 

» CPB has monopoly in forecasting 

» CPB has more advanced scientific methods and output 

•Recent initiatives in the aftermath of the economic crisis 

UK Office for Budgetary Responsibility (OBR) 

EU president van Rompuy: ‘all EU countries should have a CPB’ 


7 

History July 2011

Organisation (1) 

• Agency of Ministry of Economic Affairs, Agriculture and Innovation 

Budget 

Personnel policy 

Outside requests need Minister’s fiat 

Yet: independent research, in the 

interest of government & parliament 

• Access to confidential information 

Budgets 

Policy initiatives 

• Funding 

Bulk is funded by Ministry of Economic Affairs 

10-20 percent project finance by ministries, EU and others 

No paid assignments from third or commercial parties 


8 

Organisation July 2011



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• People 

- 120 full-time positions (135 persons) 

- 70 percent academic economists, large share with PhDs 

- budget approximately 11 million Euro per year 

- Director appointed by council of ministers for 7 years 

• Central Planning Committee (CPC) 

Installed by law as an advisory body 

Independent members: scientists, business men, trade unionists, 

government representative from the Ministry of Economic Affairs 

• Evaluation every five years 

Scientific: international (led by Hellwig [2010], Zimmermann [2005]) 

Policy relevance: national (led by Borstlap [2007], Bakker [2002]) 


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Organisation, tasks, and activities July 2011

Stakeholders (1) 

• Government and ministries 

Tradition of coalition governments 

Policy analysis for almost all ministries 

» Member of councils of advice on e.g. social-economic issues, 

environment, infrastructure, innovation, education and health 

» CPB Director is member of the Social Economic Council 

• Parliament and political parties 

Answering economic policy questions 

Economic analysis of election platforms 


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Stakeholders July 2011



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• Scientific community 

Scientific tools and models are used for policy analysis 

Reputation depends partly on academic quality of output 

Recruitment 

• General public 

Media 

Tax payers 

• Independence also means … 

Responsive to needs 

Pro-active in formulating future needs 


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Research areas (1) 

• Short and medium-term forecasting 

Quarterly publication of short-term macroeconomic forecast 

• CEP (spring) 

• MEV (Prinsjesdag or ‘budget day’). Two-way: CPB’s economic forecast 

includes the budget, budget includes CPB’s economic forecast 

• shorter updates in June and December 

Charting Choices (analysis of election platforms) 

Medium term election forecast (MLT) 

World Trade Monitor 

• Long-run scenario studies 

Four Futures of Europe 

The Netherlands of 2040 

• Background studies 

The relation between productivity and export performance 

A meta-analysis of the labour-supply elasticity 


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Activities July 2011

Research areas (2) 

• Institutional analysis of specific sectors 

Intergenerational risk sharing in pension funds 

Tax subsidies for formal and informal childcare 

Market design of future health care system 

• Ex ante cost-benefit analysis 

Business district Amsterdam 

Large housing location including its infrastructure in Almere 

• Ex post evaluations 

A new organisation of social assistance 

EU enlargement 

Effectiveness of education policies 


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Output July 2011

Models (1) 

Production steps: 

1. Analysis of residuals & behavourial 

comparisons (theory) 

2.Exogeneous variables (international and 

policy) 

3.Data from recent past (Statistics NL) 

4.SAFFIER II computes 

5.Check plausibility with specialists: 

economic cycle, collective sector, 

public finance, labour market, other 

instruments CPB 

6.Iterative process: model sometimes 

“overruled‟ by specialists 

7.Technical meetings with ministeries 

(about specifics of policy proposals) 

8.Presentation for Cabinet + Publication 

Centraal Planbureau

Models (2) 

What is explained: 

(Mainly) determined by: 

• Economic growth (GDPvolume) 

• international cycle 

• Wages and prices 

• Labour market & 

unemployment 

• Collective sector (taxes, social 

security premiums, EMU rate) 

• public policy 

• Labour market: participation 

• Specific sectors: helath care, 

housing renmstals, gas prices 

Centraal Planbureau

How good are our projections (MEV, GDP)? 

6 % Lopend jaar 

5 

4 

3 

2 

1 

0 

-1 

-2 

-3 

-4 

-5 

71 75 80 85 90 95 00 05 10 

realisatie 

MEV_raming 

6 % Komend jaar 

5 

4 

3 

2 

1 

0 

-1 

-2 

-3 

-4 

-5 

71 75 80 85 90 95 00 05 10 

realisatie 

MEV_raming 

Centraal Planbureau

Election cycle (1) 

• CPB Mid-term forecast 

Includes an analysis of ageing and sustainability 

• Advisory Group on Fiscal Policy 

Gives advice on budgetary goals 

• CPB analysis of election platforms 

• Elections 

• Negotiations on new coalition agreement 

Ceilings for expenditure in real terms 

Deficits should be compensated 

Tax rates and premiums on revenue side 

Automatic stabilisation on revenue side 


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• Consultation on concrete policy proposals 

Consistency and plausibility check 

• Analysis of impact on 

Public finances, medium and long term 

Macro economy, purchasing power 

Topics: education and innovation, environment 

• Published before elections 

Informs public debate 

Base for coalition negotiations after election 

• Voluntary, no legal obligation! 

Tradition since 1986 

In 2010 all larger political parties participated 


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Publications 

Centraal Planbureau

Reputation 

• Generally accepted as an independent authority 

Policy analysis not only for government but also for opposition parties 

Broad portfolio of activities in many branches 

• Policy analyses free of charge 

Confidential: report directly to customer (e.g., political party) 

Publication after reference in public by customer 

• Focus on quality 

Scientific methods and tools 

Recruitment of the best graduates (also internationally) 

Academic and policy evaluation every five years 


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Reputation 

• Others about CPB: 

OECD (2010): “The CPB stands out as an institution that has over the 

decades become fully integrated into the policy-making process while 

retaining a solid reputation for professionalism and impartiality in its 

analysis” 

Professor Martin Hellwig (chair of last evaluation committee): “High 

quality at crossroad of academic research and policy.” 

IMF: “The CPB occupies a unique position in fiscal policy making in the 

Netherlands. (…) In such a situation, its independence and credibility are 

essential, and the IMF-mission fully supports the continuation of the 

current institutional set up.” 


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More information on 

www.cpb.nl 

Thank you! 

Centraal Planbureau

CPB Netherlands Bureau for Economic Policy Analysis

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