The Signal #10
When forecasts fail, who gets to imagine the future?
Forecasting used to sit at the centre of economic governance. Ministries, central banks and international institutions produced point forecasts that, while never exact, offered a shared reference point for planning. Growth, inflation and employment projections functioned as stabilising guide rails for decision-making.
Over time, the limits of this approach became harder to ignore. Economist Morten Nyboe Tabor highlights growing discomfort with single-line projections, fan charts and probabilistic ranges in a world shaped by volatile supply shocks, climate disruption and rapid technological change.
In response, institutions are moving towards scenario-building. Rather than narrowing uncertainty around a central trajectory, scenario approaches deliberately expand the space of plausible futures. Yet in practice, scenario-building remains largely expert-driven, concentrated in central banks, finance ministries and international organisations.
Seen through a Polity Futures lens, this shift is not only methodological but political. Forecasting once functioned as a technical filter between political debate and policy choice, translating complexity into a narrow band of reasonable expectations. Scenario-building, especially when it remains expert-led, expands the range of futures considered but does not necessarily democratise the authority to define them. It changes the shape of uncertainty without fully redistributing the power to interpret it.
Yet the very nature of deep uncertainty and contestation in future pathways, from climate transition and AI diffusion to fiscal sustainability and demographic change, suggests that this asymmetry is difficult to justify. Different social groups not only experience different outcomes, but they inhabit different plausible futures. Treating scenario construction as a purely technical exercise risks embedding those differences within expert assumptions rather than making them visible and contestable.
The governance implication is therefore the unfinished democratisation of foresight. Shared forecasts once enabled coordination through convergence on a single expected future. Scenario-building weakens that convergence, but has not yet replaced it with more inclusive mechanisms for constructing shared orientation in uncertainty.
At national and regional levels, this tension is already visible in budgeting debates, climate planning, and industrial strategy. At the global level, it becomes more pronounced as institutions struggle to align around common baselines for growth, debt, or emissions pathways. The erosion of a single forecast does not remove the need for coordination, but it shifts the question from “what do we expect?” to “how do we collectively navigate a plurality of possible futures?”
What is emerging, then, is a needed rethink of how societies relate to the future. Forecasting is moving from prediction to structured imagination, but still largely within expert systems. The central challenge is institutional design: how to open up scenario-building so that it becomes a genuinely democratic practice of anticipating, contesting, and shaping uncertainty.
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Warmly,
Sanja
Reads of the week
Project Syndicate: Is Economic Forecasting Still Possible?
Scientific American: New study shows how the brain weighs evidence to make decisions
Geoff’s Substack: Stack thinking