Communications as a Policy Tool
IMF Blog, May 22, 2019
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Bibliographic details
- Authors: Gerry Rice, Olga Stankova
- Published: May 22, 2019
Overview
- Authors: Gerry Rice, Olga Stankova
- Date: May 22, 2019
- Core message: Communications are increasingly seen as a policy tool in themselves; they can never be a substitute for good policies but are crucial for reforms to be understood, believed, and accepted by those they affect.
- Context: Applies across monetary, financial, fiscal, and structural policies; proliferation of social media increases expectations for transparency and accountability and raises the bar for policymakers to explain actions to a broader public.
Importance of trust
- Trust is a central theme and is vital to the functioning of any economy and to the success of reforms.
- Observations:
- Polls across multiple countries show a long-running and deepening decline in trust in institutions and experts.
- Contributing factors cited: the global financial crisis, increasing inequality, political polarization, and a lack of sincere attention to the needs of the public.
- Communications role:
- Communications can play a central role in restoring and maintaining trust.
- Rebuilding trust is difficult; communications perceived as manipulation or “spin” may further erode trust.
- To be successful, both policies and communications must be trustworthy.
Learning from experience
- Principle: Communicating effectively means learning from experience and calibrating communications to fit distinct policy areas.
- Policy-area contrasts:
- Monetary policy:
- Communications often occur within a well-established policy framework.
- Communications play a central role in managing inflation expectations.
- There is a large empirical literature on how such communications work.
- Financial stability policy:
- The framework is still developing.
- Less is known about the most effective way to communicate.
- A key challenge is finding the right degree of transparency to avoid destabilizing financial markets.
- Fiscal and structural policies:
- Political economy considerations—“who gets what, when, and how”—are often at the forefront of communications.
- High premium on both listening to and persuading the public.
- Example: Brazil was a pioneer in public participation in the budget process, which has spread throughout Latin America; in many countries it is now required by law to listen to and consult civil society organizations on budget priorities.
- Crisis situations:
- In a crisis, action may be required simultaneously in many policy areas.
- A coordinated approach to communications, with mutually supportive messages, can help maintain confidence and reduce the ultimate costs of the crisis.
New communications capacity
- Imperative: Continuously upgrade communications capacity, harness new technologies, and use multiple channels with many different paths from sender to receiver.
- Goals:
- Reach audiences directly, with less intermediation—especially important where specialized economic media are still developing or a particular political agenda may dominate.
- Use behavioral insights and ethically apply techniques such as audience segmentation, facilitated by social media.
- Craft messages that connect with and are relatable to intended audiences’ needs and interests, tiered by channels and content.
- Example: Bank of Jamaica has begun an innovative communications campaign to explain the benefits of price stability, including through social media, as well as TV and radio advertising using Jamaica’s popular reggae music.
Key takeaways and policy implications
- Communications complement but do not replace sound policy design.
- Trust-building is essential and fragile; communications must be perceived as sincere and not manipulative.
- Tailor communications strategies to the policy area—what works for monetary policy may not work for financial stability or fiscal policy.
- Invest in communications capacity: technology, multiple channels, audience segmentation, and behavioral insights.
- Coordinate communications across policy areas in crises to support confidence and limit costs.
- Learn from country experiences and institutional practices to inform communications strategies.
Source: Communications as a Policy Tool, IMF blog page by Gerry Rice and Olga Stankova, May 22, 2019.
Content in this bundle
- 2019 Edelman Trust Barometer Global Report 2