The Investment Approach to Public Service Provision

The investment approach to public service provision is now receiving considerable attention worldwide. By promoting data‐intensive assessments of baseline conditions and how government action can improve on them, the approach holds the potential to transform policy development, service implementation, and program evaluation. Recently, variations on the investment approach have been applied in Australia to explore the effectiveness of specific programs in employment training, criminal justice, and infrastructure development. This article reviews the investment approach, presents a Public Investment Checklist to guide such work, and discusses three examples. It concludes by considering the implications of investment thinking for the work of policy designers and public managers.     

Regulatory Commitment to Negotiated Agreements: Evidence from the United States, Germany, The Netherlands, and France

Negotiated Agreements (NAs) are arrangements between firms and regulators in which firms voluntarily agree to reduce their pollution. This article analyzes the institutional features that facilitate or hamper the implementation of NAs. We illustrate the analysis with case studies on the implementation of NAs in the United States, Germany, the Netherlands, and France. We find that NAs are implemented when regulators are able to commit credibly to the objectives of NAs. Institutional environments marked by fragmentation of power and open access in policymaking reduce regulatory credibility and thus hamper the implementation of NAs.     

Does regulation kill jobs?: The limits of quantification

This essay reviews a new edited volume entitled Does Regulation Kill Jobs? It concludes that this book brings much needed data and realism to the debate about jobs and the environment, showing that government regulation generally has minor impacts on employment. This essay focuses much of its attention on the suggestion, discussed by several of the contributors to this book, that cost–benefit analysis should include a dollar value representing an estimate of the value of employment changes a proposed regulation might cause. It discusses concerns about double counting, ex ante estimates of employment impacts, monetization of the value of employment impacts, and potentially misleading asymmetric analysis.     

New foundations of cost–benefit analysis

This article responds to the criticisms of New Foundations of Cost–Benefit Analysis that appeared in a review by Amy Sinden, Douglas A. Kysar, and David M. Driesen. We argue that their criticisms are either based on misunderstandings of our approach or are too demanding, in the sense that no reasonable decision procedure would satisfy them. We illustrate this second argument by demonstrating that their preferred approach – feasibility analysis – has little to recommend it.     

Cost–benefit analysis: New foundations on shifting sand

New Foundations of Cost–Benefit Analysis, by Matthew Adler and Eric Posner, represents the most ambitious and credible effort to date to build a solid theoretical defense of the use of cost–benefit analysis (CBA) in evaluating government regulation. In this review, three cost–benefit “skeptics” offer their reactions to this ambitious and important book. We note its virtues – its humility, its scrupulousness, its open‐mindedness. We also explore its vices. If preferences are to be “laundered,” is it intellectually defensible to remove the bad but not consider adding the good? Does Adler's and Posner's welfarism really play the limited role they suppose, or does it risk “crowding out” other important deontological and distributional values? If CBA is merely a decision procedure that provides an imperfect proxy of welfare – the moral criterion we really care about – how do we know that the proxy it provides in practice will actually be accurate enough to be useful? Isn't this at bottom an empirical question that cannot be answered by this thoroughly theoretical book? If CBA is no more than an imperfect proxy for welfare, then alternative imperfect decision procedures may perform better in the real world.     

Mark‐to‐market: A fundamental shift in affordable housing policy

Abstract

Residential mortgage underwriting practice has serious shortcomings, including fixation on the present rather than the future. Accept‐reject decisions reflect some unknown interaction among implicit macro projections, implicit micro projections, and implicit policy toward assuming risk, and there is no way to relate the decision process to its components. As a result, there is no satisfactory way for a lender to incorporate a particular macro‐economic outlook into its underwriting standards. Further, different mortgage designs often carry markedly different degrees of risk. Most critically, accountability for underwriting decisions is obscured.

This paper proposes a fundamentally new approach to underwriting that makes full use of new technology. Under this approach, macro and micro projections of the future and the lender's policy toward risk are explicitly specified. The accept‐reject decision is automatic and transparent. Each of the parties responsible for the components of underwriting decisions can be held accountable, with the underwriter responsible only for micro projections.     

The Quiet Revolution? The Labour Party and Welfare Conditionality

Labour's 2017 general election manifesto contained a pledge to ‘end the punitive sanctions regime’ in the British welfare state. Whilst the specific implications of this pledge were not elaborated, such a policy would nevertheless constitute a profound break with a welfare consensus spanning over twenty years. The depth of the suggested changes on welfare are also evident in the scale of reform proposed to disability benefits, as well as plans—confirmed in August 2018 by the Shadow Chancellor John McDonnell—to pilot universal basic income. Collectively, these policies would seemingly be deeply at odds with public opinion on the benefits system, which over the course of the last two decades has significantly hardened. Yet despite the seemingly radical and controversial nature of the policy, it received very little media or public attention during the election campaign. This article explores Labour's ‘quiet revolution’ on welfare, examining whether Labour's new welfare approach is indeed a bold attempt to reshape public opinion on welfare or, alternatively, a mostly pragmatic reaction to changing social attitudes. The argument presented is that whilst there are persuasive explanations that Labour is responding to a change in the public mood, there is also evidence of a more ambitious goal at stake: the aim of reshaping, not simply responding to, public opinion on the welfare state.     

Cost‐Effectiveness of Early Childhood Interventions to Enhance Preschool: Evidence from a Randomized Experiment in Head Start Centers Enrolling Historically Underserved Populations

We evaluate the cost‐effectiveness of two early childhood interventions that use instructional coaching and parent coaching as levers for improvement. The study design allows us to compare the individual effects of each intervention as well as their combined effect on student outcomes. We find that teachers receiving instructional coaching improve their use of evidence‐based instructional practices, while families receiving parent coaching show increases in numerous responsive parenting behaviors associated with positive child outcomes. Both interventions demonstrate positive impacts on students, but only parent coaching shows statistically significant effects across a range of student outcomes. Instructional coaching alone is substantially less costly and may therefore be the most cost‐effective of the three treatment conditions; however, small sample sizes limit our ability to reach definitive conclusions. Policy simulations suggest that implementing these interventions could raise the overall cost‐effectiveness of Head Start by at least 16 percent.     

Should Love Conquer Evidence in Policy‐Making? Challenges in Implementing Random Drug‐Testing of Welfare Recipients in Australia

The Australian Government announced in its 2017 budget that it would trial random drug‐testing of recipients of the Newstart Allowance and Youth Allowance in three locations from January 2018. The Prime Minister described it as a policy ‘based on love’, but that sentiment is hard to find in the policy rhetoric, which situates it in a suite of measures designed to ‘ensure taxpayers’ money is not being used to fund drug addictions which are creating significant barriers to employment'. The policy may make it harder for people to buy drugs with their welfare payments, through income management, but research suggests it will not help them overcome addiction and its costs will exceed any savings it generates in income support. Furthermore, the policy perpetuates ‘medicalisation’ of the problem of long‐term unemployment by suggesting it stems from deficiencies in individuals that can be ‘treated’, despite evidence to the contrary. Finally, the policy claims to close loopholes in enforcement of mutual obligation requirements without addressing structural weaknesses in the welfare‐to‐work model. Each of these issues will pose challenges for those charged with implementing the policy.