The National Institute of Economic and Social Research (NIESR) is Britain's longest-established independent research institute, based in London. Founded in 1938 by a group of major social and economic reformers including John Maynard Keynes and William Beveridge, it carries out research into the economic and social forces that affect people's lives, aiming to improve understanding of those forces and the ways in which policy can bring about change.
Britain's longest-established independent research institute
NIESR describes itself as Britain's longest-established independent research institute, and its founding vision has remained central to its ethos for more than 85 years: to carry out research that improves understanding of the economic and social forces affecting people's lives, and of the ways in which policy can bring about change. The Institute applies expertise in both quantitative and qualitative methods to current debates, and seeks to influence policy through authoritative analysis. It brings together policymakers, academics, the media and other research institutes, playing a pivotal role in national and international policy debates. With a small staff of around 28 researchers supported by visiting and honorary fellows, and an annual turnover of approximately 3 million pounds, it is a deliberately compact institution whose influence far exceeds its size.
Origins in the 1930s
The foundation of NIESR was preceded by an initiative launched by Sir Josiah Stamp in the early 1930s. Stamp, who was President of the London, Midland and Scottish Railway, aimed to develop a central British research unit, funded from domestic sources, that would supplement and eventually replace the help given by the Rockefeller Foundation, then the primary source of research funds in the British social sciences. Stamp sought to build an increasingly large research effort in economics and related subjects, responding to a general feeling that the existing emphasis on theory needed to be balanced by an increase in applied research. He garnered support from prominent academics including William Beveridge, Director of the London School of Economics; Henry Clay, Economic Adviser to the Bank of England; and Hubert Henderson, Secretary of the Economic Advisory Panel.
Founders and early funding
In 1934 and 1935, Stamp, with the assistance of Noel Hall, attempted to secure funding from several trusts, including Halley Stewart, Leverhulme, Rockefeller and the Pilgrim Trust. The Halley Stewart trustees provided an initial grant of 600 pounds to explore the formation of an institute. The objective was a national organisation for independent economic research, since existing university developments, such as those at the London School of Economics, were not perceived as meeting the need. Beveridge became actively involved and suggested adding the word 'social' to the title, changing the proposed National Institute of Economic Research into the National Institute of Economic and Social Research. The Institute was formally founded on 2 June 1938, with initial support from the Pilgrim Trust, the trustees of the late Lord Leverhulme and the Halley Stewart trustees, and the Rockefeller Foundation matching their contributions pound for pound, totalling 10,000 pounds annually for seven years.
Radical independence
Independence is the defining characteristic of NIESR. The Institute is independent of all party-political interests and receives no core funding from government or any other single source. It is not affiliated to any single university, although its staff regularly undertake projects in collaboration with leading academic institutions. The Institute operates as a charity and is governed by a Council of Management, whose members function as a board of trustees. Funding comes through commissioned research projects from a variety of sources: government departments and agencies, the research councils, particularly the Economic and Social Research Council, the European Commission, charitable foundations and the private sector. Its governors are a distinguished and influential group who help extend the Institute's outreach and impact.
Research structure and themes
Institute staff are organised into three research groups: macroeconomics and finance; employment; and productivity, innovation and skills. Its macroeconomic and public policy research is structured around core themes that include the scope for active monetary and fiscal policies, the macroeconomics of climate change, productivity, regional regeneration, destitution, education and skills. Other research themes cover health and well-being, policy evaluation, welfare, migration, inequality, poverty and disadvantage, families, early years and early intervention, and employment policy and practice. This breadth reflects the founders' ambition: economics and social research pursued together, rather than in separate silos.
NiGEM: the global econometric model
One of NIESR's most important intellectual assets is NiGEM, the National Institute Global Econometric Model, which has been in use at the Institute for forecasting and policy analysis since 1987. NiGEM is a large-scale macroeconometric model constructed within a New Keynesian framework, with short-run nominal rigidities and forward-looking expectations. Most countries in the OECD are modelled separately, alongside separate models for economies including China, India, Brazil, Russia, South Africa and Indonesia, with the rest of the world captured through regional blocks so that the model is global in scope. Economies are linked through trade, competitiveness and financial markets and are fully simultaneous. The model is used not only by NIESR itself but by a group of more than 40 model subscribers, mainly in the policy community around the world, for economic forecasting, scenario building and stress testing. It has been used to analyse questions ranging from monetary and fiscal policy shocks to the economic effects of Brexit, US tariffs and exchange-rate movements.
The National Institute Economic Review
The Institute publishes the National Institute Economic Review, a quarterly peer-reviewed academic journal published by Cambridge University Press on its behalf. The first edition of the Review appeared in January 1959, launched by the then Director, Christopher Saunders, with Robert Neild as its first editor. The journal principally focuses on modelling and analysis, education economics, productivity and international economics, with each issue incorporating an overarching theme alongside topical commentary and forecasts. It is abstracted and indexed in services including Scopus, the Social Science Citation Index and the Science Citation Index, and its forecasts for the world and UK economies, produced using NiGEM, are among its most closely watched features.
Leadership through the decades
The Institute has been led by a succession of distinguished economists. Dr Martin Weale served as Director from 1995 to 2011, followed by Jonathan Portes, previously Chief Economist at the Cabinet Office, from 2011 to late 2015. Professor Jagjit S. Chadha took up the directorship in May 2016. The presidency has been held by figures including Lord Burns, from 2003 to 2010, and Sir Nicholas Monck, from 2011 to 2013; the current President is Professor Sir Charles Bean, former Deputy Governor for Monetary Policy at the Bank of England. Diane Coyle, Professor of Economics at the University of Manchester, chairs the Council of Management. The leadership reflects the Institute's position at the meeting point of academic economics and public policy.
London base and partnerships
NIESR is located in London, England, at 2 Dean Trench Street, London, and its official website is niesr.ac.uk. Although independent of any single university, the Institute works in close partnership with academic institutions. It is a partner in the Economic and Social Research Council's Centre for Macroeconomics and in The Productivity Institute, and it is responsible for the Productivity Commission. It also maintains close ties with Cardiff and Glasgow universities. Its researchers collaborate with governments, charitable foundations and international organisations, and its work is disseminated through reports, briefings, events and its podcast.
A continuing role in public debate
For more than eight decades, NIESR has carried out high-quality research on topics of contemporary interest or of relevance to business, academia and policymakers, prompting debate and informed discussion on economic and social issues. Its UK economic outlook reports, analyses of living standards, and evaluations of government policy are regularly cited in the national media and in Parliament. From its origins in the reforming spirit of the 1930s to its current work on climate macroeconomics, regional regeneration and destitution, the Institute remains what its founders intended: an independent source of evidence and analysis, free from party interest, dedicated to improving public understanding of the forces that shape people's lives.
