Causal Mechanisms: A Potential Tool For Economic Policy?

Over the past few decades, philosophers of science and social scientists have debated about the role of mechanisms as a method of inquiry. However, the concept of mechanisms has received relatively little attention within the realm of economic policy. This thesis aims to defend the claim that mechanisms are a useful tool for economic policy-making. For this purpose, two main arguments will be presented. First, mechanisms are able to partly resolve the methodological problem of external validity by specifying the similarity in background conditions between the artificial and target environments of economic policies. Mechanism design seems to be particularly promising approach in this regard. Second, mechanisms have the ability to provide a preliminary understanding of the evidence that could be relevant for the effectiveness of policy interventions. Interpreted as causal scenarios, policy makers can use mechanisms as a tool in order to establish evidential relevance.