The most important paragraph in the IMF World Economic Outlook

68 words of wonkishness.

The IMF's World Economic Outlook (pdf) – a 230-page tome detailing predictions on nearly every aspect of the world's economy collated by the international organisation – always gets attention for the calls it makes.

The October edition downgrades expected global growth for 2013 from 3.9 per cent to 3.6 per cent, and also cuts predictions for China (down to 8.2 per cent for 2013), the US (expected to grow by 2.1 per cent in 2013, down from 2.3 per cent in July's prediction) and the UK (now expected to grow by just 1.1 per cent next year, and to contract by 0.2 per cent this year).

But the predictions are not the most important passages in this edition of the Outlook. Those are found in a short box-out titled Are We Underestimating Short-Term Fiscal Multipliers?

The fisc§al multiplier is the effect government spending has on GDP. Money spent by the government doesn't disappear – it is respent, again and again. If a teacher gets a pay rise, their consumption is likely to rise in line with it; if all teachers get pay rises, that increase in consumption may be enough to affect the aggregate demand in the economy. In an economy which isn't being stretched to its limits – that is, one without full employment, or serious capital equipment shortages – that increase in aggregate demand will result in an increase in GDP.

The existence of the fiscal multiplier is a matter of fact, but the magnitude of it is contested. And that's where the IMF enters the scene, on page 42:

The main finding, based on data for 28 economies, is that the multipliers used in generating growth forecasts have been systematically too low since the start of the Great Recession, by 0.4 to 1.2, depending on the forecast source and the specifics of the estimation approach. Informal evidence suggests that the multipliers implicitly used to generate these forecasts are about 0.5. So actual multipliers may be higher, in the range of 0.9 to 1.7.

Emphasis mine. When deciding how much to spend, governments have been assuming that every pound they spend increases GDP by 50p – but it may increase it by as much as £1.70.

The reason this is so very important is that fiscal multiplier is usually appealed to not when deciding how much to spend, but how much to not spend. When governments are planning austerity packages, they have to be wary of the fact that large cuts to government spending will inevitably cause a decrease in output, and so they either have to be prepared to take that hit, or come up with a reason why slashing spending will cause an increase in output through some other mechanism.

That is easy enough to do if you are trying to account for a fiscal multiplier of 0.5: you can make the arguments, which Osborne and Cameron rehearsed repeatedly, that the public sector is crowding out the private; that the government spending which is being cut is particularly inefficient; or that the confidence fairies will reward your thriftiness with growth.

When there is the chance that the fiscal multiplier is three times that, austerity becomes much more likely to involve damaging drops in output.

There was once a time when the government pegged its credibility to that of the IMF – back when George Osborne was proud about Britain's credit ratings, and the international community was behind his plans. Those days are gone, and have been since Christine Lagarde made her own attack on austerity. But the economists at the treasury may be more inclined to listen to the wonkish findings of the World Outlook than the political interventions of the fund's leader. We can only hope they are prompted to re-do the sums.

The IMF headquarters. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Tail docking is described as “barbaric” – so why did the SNP vote to bring it back?

The decision by the SNP to permit the docking of puppies' tails seems bizarre - until you consider the party's divided loyalties.

As Holyrood votes go, it probably doesn't get more emotive than the decision to lift the ban on tail docking - a procedure carried out on three-day-old puppies which involves crushing cartilage, nerves and bone without anaesthetic, and which campaigners have called "barbaric".

The reasoning is that these "working" dogs, flushing out animals to be shot on Scotland's vast hunting estates, can injure their long tails. The British Veterinary Association disagrees, saying the procedure inflicts significant pain and deprives dogs of a "vital form of canine expression". 

So why has the Scottish National Party, with its left-wing rhethoric and substantial block of left-leaning newer members, voted through such a deeply controversial proposal?

One clue is to be found in 2014-15 - not the independence referendum, but the push for land reform which followed it. The extraordinary concentration of land ownership in Scotland - around 430 families or companies own half of the private land - became a touchstone issue for independence campaigners. After September 2014, many transferred their enthusiasm to this issue, demanding a new bill that would kickstart land reform after a decade in the long grass.

This presented a real problem for the SNP. In its longheld tactic of appealing to both left and right, rich and poor, the land issue showed up the cracks. While the new First Minister made rash promises of "radical" reform in November 2015, her cabinet nevertheless included Fergus Ewing, a centre-right politician with links to the landed estates and rural lobby. 
 
Pictures of Ewing clad in tweed alongside gamekeepers at a PR stunt caused some of the party's new membership a twinge of unease. Unedifying rows over fracking, which highlighted Ewing's relationship with the Duke of Buccleuch, did not help. While much was made of the SNP's 56 MPs opposing fox hunting at Westminster, Ewing opposed a Scottish ban more than a decade before
  
Before the SNP made its unprecedented break into the Labour strongholds of the west of Scotland and central belt, the party's support was concentrated in the largely rural east. Perthshire, Banff and Buchan, Moray are places where people voted Tory in the past - and indeed, turned blue once more this June. Not that such a swing can be said to have come entirely from SNP voters. Nevertheless, it does highlights another side of SNP membership that is often forgotten about. "It's said that there are two SNPs," said Professor Ailsa Henderson, professor of political science at the University of Edinburgh. "An SNP voter in Govan is perceived to have a very different profile than another in Perthshire". 
 
This project to appeal to all Scotland - particularly noticeable during Alex Salmond's leadership - produces strange paradoxes, and this tail docking issue is just the latest. The rural lobby is strong, from gamekeepers' associations to hunting proponents to the powerful Countryside Alliance. The current government's proposal to reintroduce the practice didn't come out of the blue. As Green MSP Mark Ruskell explains, the lobbying began with the SNP's victory at Holyrood in 2007. The previous Labour-led "rainbow" parliament, with its seven green MSPs and six socialists, had introduced the Animal Welfare (Scotland) Act, banning the practice of docking as well as fox hunting. 
 
"The gamekeepers were furious," Ruskell said, "And the first thing they did was to lobby the new Scottish government". Ten years later, their wish was granted. "The evidence was rejected by professional bodies, but they still went ahead. It's been spectacularly misjudged," added Ruskell. The power of lobby groups at Holyrood has repeatedly been raised as a concern by campaigners and parliamentarians alike, with last year's Lobbying Act cricitised as being far too weak to ensure real transparency. Pressure from gamekeepers and shooting groups, Ruskell said, influenced the whole way the evidence was put together. One report was simply a survey of self-selecting shooting estates, describing the frequency of tail injuries. 
 
For its part the Scottish government defended the move by pointing out that the rules will still be more restrictive than in other parts of the UK. Only a vet can make the decision to shorten tails - "no more than the end third" - and it will apply only to spaniels and hunt point retrievers. "We have seen enough evidence that some working dogs are suffering tail injuries to make the case for the law being changed", said a government spokesperson. "Scotland is a nation of animal lovers and we take the welfare of our pets, animals and livestock very seriously." 
 
Reaction from SNP members online has been fairly damning, with some talking of leaving the party - though others have defended the decision. The next big showdowns in Holyrood on animal welfare are likely to be just as emotive: the use of electric shock collars on dogs, and the prosecution of wildlife crime (or, how to deal with the fact that poisoned, bludgeoned birds of prey keep turning up on grouse shooting estates). The latter in particular will test, once again, the direction of a party split between appeasing a land management lobby, and meeting the high expectations of its newer members. 
 

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