29 May 2009
“Because policy impacts are often overstated, our national debate is misguided, concentrating on illusory ‘fixes’ rather than on the true choices before us,” writes Wyckoff, an associate professor of government and the director of the public policy program at Hamilton College.
In the just-released Urban Institute Press book, Wyckoff guides readers through timely examples of overstatements in short-term fiscal policy, long-term growth policy, education, state and local economic development, and welfare. He explains that these policies are largely “disconnected levers” rooted in ignorance of statistics and supported by analyses steeped in economic theory but lacking empirical evidence.
Liberals, Wyckoff shows, consistently claim policy can fundamentally alter society’s social, economic, and demographic fabric, while conservatives maintain that government actions are the cause of, not the remedy for, social problems. He argues that both views are incorrect and that domestic policy has limited behavioral impact compared to other social forces. As a result, voters and policy watchers should turn away from behavioral promises and judge government leaders by how well programs meet redistributional, investment, service, and regulatory objectives.
Bookending Policy and Evidence is a lament over the low standards for evidence in policy disputes and a framework for remedying the widespread inability of citizens and policymakers to understand basic statistical concepts. “Because we don’t know how to weigh empirical evidence, we fall victim to poorly supported but intuitively plausible ideas,” he points out.
"Policy and Evidence in a Partisan Age" is a book for anyone -- student, academic, policymaker, policy professional, or ordinary citizen -- who wants to see policy choices more clearly and wiser decisions made about how to spend tax dollars.
Inside "Policy and Evidence"
Chapter 2 (“How to Tell What the Emperor Is Wearing”) explains in straightforward, nonmathematical terms the empirical methods that can be used to sort effective from ineffective policies. A simple hierarchy of statistical evidence helps readers evaluate policy claims.
Chapter 3 (“It’s Not the Economy, Stupid!”) calls for rethinking our expectations about the president and the economy. The factors that matter to the economy (monetary policy and automatic stabilizers, such as entitlements) are not under politicians’ short-term control, while the factors that are (i.e., discretionary fiscal policies) cannot be accurately timed to jolt the economy when it needs a boost.
Chapter 4 (“Growth Illusions”) examines government policy’s impact on long-term economic growth. While the Laffer Curve, for example, envisions an easy, painless way to spur the economy -- just lower taxes -- the best evidence suggests that the government’s influence is surprisingly circumscribed, and budget decisions require painful, politically difficult choices between future growth and present economic satisfaction.
Chapter 5 (“A Tale of Two Decisions”) details the poor quality of the information used in making policy decisions by contrasting it with the data and analysis used in medicine. In 1981, two landmark decisions came within weeks of each other. In July, the medical community approved a controversial vaccine to treat hepatitis-B; in August, the Reagan administration engineered the largest tax cut in history. The vaccine’s claims were backed by one of the most successful experimental trials ever; the tax cut’s claims had almost no empirical support.
Chapter 6 (“Is Education the Great Equalizer?”) focuses on the effect of increased educational resources on student performance, picking apart the assumption that the education system “levels the playing field” and provides opportunity for all. In the end, Wyckoff posits, we ought to be more open to new ideas, more sensitive to inequalities that are byproducts of some education reforms, and more understanding about long-term support for the disadvantaged.
Chapter 7 (“The States and Competition for Economic Development”) takes up tax incentives used in bidding wars between states for jobs and firms. Do incentives bring in businesses that wouldn’t have located in an area but for those incentives? There’s no hidden fix to jump start a state’s economy, he concludes, just tradeoffs and choices.
Chapter 8 (“What Did Your Congressman Learn in School?”) reveals how politicians’ education generally leaves them strong in economic theory and legal procedure, but weak in statistics and empirical policy studies. When presented with data -- from staff, researchers, reporters, or interest groups -- a representative or senator “is not likely to be prepared to evaluate them against the hierarchy of statistical information. Worse, he or she may not be aware that statistical evaluation of policy claims is even possible. Policy decisions are thus decided on anything but empirical grounds.”
Chapter 9 (“Welfare without Illusions”) reviews what we know about welfare and poverty, examining how the welfare debate might change if limits on ending poverty were fully recognized. “Liberals might stop asking for big new programs based on failed old models,” Wyckoff comments. “And conservatives, understanding the lack of easy solutions for the poor, might agree to a more humane welfare system.”
Chapter 10 (“Conclusions: Policy as Patent Medicine”) compares today’s policy debates to the claims of hucksters during the heyday of patent medicine. “Just like patients in the late 19th century, we believe in inflated promises for two reasons. First, we engage in the illusion of control. We desperately want to believe that we can control the pace and direction of our economic system; it is just too frightening to realize that we are at the mercy of external forces like globalization,” Wyckoff writes. “Second, we believe in oversold promises because we don’t have the requisite knowledge to judge policy options or the tools to distinguish high-quality from low-quality data.”
Policy and Evidence in a Partisan Age: The Great Disconnect is available from the Urban Institute Press (paper, 168 pages, ISBN 978-0-87766-749-0, $26.50). Order online at http://www.uipress.org, call 410-516-6956, or dial 1-800-537-5487 toll-free. Read more, including the introductory chapter, at http://www.urban.org/books/policyandevidence/.
The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance challenges facing the nation.