On Education, What Would You Do as the British Prime Minister?

MADRID — With the world economy mired in recession, the British prime minister learns that one of his country’s largest banks is experiencing liquidity problems and is close to collapse. The government has three options: It can publicly bail out the troubled bank, risking widespread panic in the financial sector; it can secretly move to shore it up; or it can leave the bank’s fate to the market. The government’s top economic advisers are divided. Time is running out. The prime minister must decide.


The situation sounds familiar, as do the periodic television news bulletins featuring a woman with a polished English accent breathlessly reporting the latest developments in the crisis. Despite the frequent references to the falling pound, this drama is unfolding not in the Treasury or the Bank of England, or anywhere in Britain, but in a classroom at the IE Business School, Madrid.

Welcome to “10 Downing Street,” an economic policy simulation game in which students adopt the role of the British prime minister. Over the course of an 80-minute class, six teams of students debate policy options before voting on a course of action. The option with the most support is then put into practice, giving rise to a new set of choices and debates. The game’s author, an economics professor, Gayle Allard, said the teams must collaborate rather than compete, “because in government you have to decide.”

“Students need to understand that policy making is not easy, and that one decision can condition all your future options,” she said.

As the game progresses, the students can compare their choices with those of Ms. Allard and other IE professors, and with the supposed views of a panel including the economists Milton Friedman, John Maynard Keynes and Paul Krugman, and Margaret Thatcher, the former British prime minister.

The game, which uses real actors, ends with a general election, but out of hundreds of possible decision pathways, “only about 40 percent lead to re-election” said Matthew Constantine, multimedia project manager at the business school.

Ankur Dhawan, a student from New Delhi, said that “we should let the market take its course,” But Mr. Dhawan’s passionate advocacy of free-market doctrine fails to convince his fellow students, who opt for a public bailout only to discover that other banks now also expect taxpayer-funded rescues, and that their good intentions have put the whole sector under pressure from speculators.

In the next round, the choices are similar, but this time, perhaps because the approach is described as “quiet support” for ailing banks, rather than a “cover-up,” the students opt for discretion. In turn, they learn another hard lesson from real life: Details of the government’s support program appear in the media, and the students now have to deal with a market meltdown.

“There is always a risk that when you keep something secret, sometimes when it leaks out the impact can be bigger,” Ms. Allard said.

Ali Golkarieh, a student who described himself as “Canadian-Iranian,” said that “I still think that trying to help the banks in secret was the right decision.” But the fact that the information leaked, he said, “shows that there’s more than one dimension to a decision.”

The game was designed to be used by classes in IE’s international M.B.A. program as well as in its management and international relations master’s degrees programs. “10 Downing Street” was partly inspired by the popularity of an earlier effort by the school’s 14-member multimedia development team.

The earlier effort, “Making Money on Oil,” turns students into petroleum futures traders who have to decide how weather, crops, currency and political unrest will affect the price of oil.

“That game forces students to take a hard look at supply and demand,” Ms. Allard said. “To do well, you need to be able to predict how several variables will affect real markets.”

Ms. Allard, a native of California, said “10 Downing Street” was originally going to be called “A Day in the White House.”  (nytimes.com)