Cut the waste! Stop the boondoggles!

Junction Oval

Junction Oval

Victorian Premier Dennis Napthine announces a “plan” to spend $20 million upgrading Junction Oval at St Kilda to accommodate the AFL team named after the suburb, even though it hasn’t played or trained there for decades. The plan appears not to have been checked with the local council or the AFL, and would apparently need another $37 million in infrastructure funding from the Abbott government.  At first glance it looks to be a complete waste of money with few if any redeeming features.

The Melbourne East West Link tunnel is a vastly more expensive but equally dubious project in cost-benefit terms that Napthine has rammed through despite very widespread opposition, including from the ALP which has said it won’t build it under any circumstances if elected.

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Complexity, reducibility, integrity and bullshit: the general untheory

Some readers may recall an earlier post which I christened an ‘untheory’ of innovation. It argued that there’s not much use in ‘theories’ of innovation if they’re taken as recipe books for senior managers to ‘drive down’ innovation through organisations. Why? Because if innovation is to thrive, endless decisions must be made to facilitate any number of different innovations and it can’t be known in advance who should be co-ordinating those decisions. An innovation might involve some slight or pronounced change in accounts, marketing, technical specifications, supplier relations, training, industrial relations and on and on. For these decisions to be made well – or as I like to say ‘on the merits‘ – all sorts of pathologies must be overcome:

There are hierarchies, there’s groupthink, there’s second guessing hierarchies, there’s trying to keep people happy and consensus at any cost, there’s ‘not invented here’, there’s ‘not in my backyard’ there’s excessive risk-aversion (though it’s usually aversion to a certain kind of risk, which is the product of another pathology – process hugging) and other manifestations of status quo bias, there’s adulation of those with high status either within a hierarchy or the wealthy and powerful over the less so and on and on.

That’s why I’ve argued that one of the most useful things one might do as far as ‘teaching’ management or innovation is concerned, is to coach managers not with the usual flattering stories of how far sighted heroic managers were, but rather with unflattering stories which highlight the foibles of our understanding – and offer means of overcoming them. What I’m arguing for is a recognition of the irreducibility of the on the ground experience – its lack of susceptibility to systematic, theoretical insight and its management corollary – policies adopted and driven from the top. There are any number of areas in which we wave away the possibility of such irreducibility and instead embrace an empty and deluded kind of managerialism in which those at the top are forever attending strategy sessions, restructuring, reengineering and all the rest of it. Progress is not made because most progress must be made at the coalface – or at least must involve the giving the coalface and autonomy to solve its problems and push for improvements.

Some other areas where this jumps out at me are: Continue reading

Shock! Good government improves wellbeing

Actually the magnitude of the effect is a bit of an eye-opener.

Empirical Linkages between Good Government and National Well-being
by John F. Helliwell, Haifang Huang, Shawn Grover, Shun Wang

Abstract:

This paper first reviews existing studies of the links between good
governance and subjective well-being. It then brings together the
largest available sets of national-level measures of the quality of
governance to assess the extent to which they contribute to
explaining the levels and changes in life evaluations in 157
countries over the years 2005-2012, using data from the Gallup World
Poll.

The results show not just that people are more satisfied with their
lives in countries with better governance quality, but also that
actual changes in governance quality since 2005 have led to large
changes in the quality of life. For example, the ten-most-improved
countries, in terms of delivery quality changes between 2005 and
2012, when compared to the ten countries with most worsened delivery
quality, are estimated to have thereby increased average life
evaluations by as much as would be produced by a 40% increase in per
capita incomes.

The results also confirm earlier findings that the delivery quality
of government services generally dominates democratic quality in
supporting better lives. The situation changes as development
proceeds, with democratic quality having a positive influence among
countries that have already achieved higher quality of service
delivery.

The economic costs of pollution

Gray Matters: Fetal Pollution Exposure and Human Capital Formation
by Prashant Bharadwaj, Joshua Graff Zivin, Matthew Gibson, Christopher A. Neilson

Abstract:

This paper examines the impact of fetal exposure to air pollution on
4th grade test scores in Santiago, Chile. We rely on comparisons
across siblings which address concerns about locational sorting and
all other time-invariant family characteristics that can lead to
endogenous exposure to poor environmental quality. We also exploit
data on air quality alerts to help address concerns related to
short-run time-varying avoidance behavior, which has been shown to be
important in a number of other contexts. We find a strong negative
effect from fetal exposure to carbon monoxide (CO) on math and
language skills measured in 4th grade. These effects are
economically significant and our back of the envelope calculations
suggest that the 50% reduction in CO in Santiago between 1990 and
2005 increased lifetime earnings by approximately 100 million USD per
birth cohort.

 

Embracing a mature tax debate?

abbott hockeyTony Abbott might well be the last bloke on earth who could plausibly demand a “mature debate” on tax reform. But that doesn’t deny the crying need for such a debate in Australia.

Nor does the fact that it’s the antithesis of what Abbott did in Opposition mean that Bill Shorten should necessarily emulate Tony’s tactics himself.  What won the last war won’t necessarily win this one.  Abbott didn’t win the 2013 election only because he relentlessly opposed everything Labor tried to do. That tactic worked because Julia Gillard had mortally wounded herself by the manner in which she seized the prime ministership, because that inevitably resulted in ongoing destructive disunity orchestrated by an embittered Kevin Rudd, and because her government consistently exhibited appalling administrative and policy implementation skills despite some excellent policy ideas. Without those self-inflicted wounds, Abbott’s “one trick pony” knee-jerk obstructionism might have failed.

Despite the fact that opinion polls have looked quite respectable for Shorten for some time, Abbott in government isn’t burdened by any of the handicaps that ensured Gillard/Rudd’s doom. Moreover, he now has the additional benefit of wrapping himself in khaki, which John Howard exploited with such great success in 2001 and 2004.

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Dick Hamer: the liberal Liberal

Dick HamerScribe publishing occasionally sends me a catalogue of books it’s publishing asking if I’d like to have one to review. Looking through their long list I picked my friend Tim Colebatch’s biography of Rupert Hamer on which he’s been working for a good while now. It’s a very enjoyable book to read. Well organised with the strictly chronological narrative occasionally being interrupted for some analysis and/or a chapter or two on specific issues, it gives a great picture of an unusually accomplished person of decency, liberality and great, if somewhat aloof grace.

Hamer was a rat of Tobruk who was always a natural leader with a strong sense of noblesse oblige. He came from Toorak (St George’s Rd no less – one of the best for those who don’t know), though Colebatch tells us they were not rich or at least their wealth was earned, not inherited. Rupert’s mum, Nancy had been orphaned at a young age but spent many years as Vice-President of Victoria Women’s Hospital which the Hamer family had spent several decades the previous century helping to build though charity drives. It was the first hospital in the British Empire to be run by and for women.

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Very clever people being … not so clever

I just came across this hilarious story.

Trying to rescue Naomi Campbell from the overzealous attentions of Mike Tyson, the Oxford philosopher A J “Freddie” Ayer – according to Ben Rogers, his biographer – inserted himself between the boxer and the supermodel. “Do you know who the f*** I am?” Tyson objected. “I’m the heavyweight champion of the world.” The 77-year-old Ayer replied: “And I am the former Wykeham professor of logic. We are both pre-eminent men in our field; I suggest we talk about this like rational men.”

It reminded me of a conversation I had about thirty odd years ago with one of Australia’s prominent philosophers John Passmore. I used to go when I could to the seminars put on by the History of Ideas Unit at around 12.00 noon on Wednesdays (as I recall) and went along to one. After each seminar off we all went to lunch across the road at University House. I was sitting next to John Passmore and for some reason the subject of banking came up. He said that he couldn’t understand why Westpac wouldn’t give him better service. I said “John, that’s because you haven’t got any market power. They don’t care about you – they’ve got bigger fish to fry”. He said “But that’s where you’re wrong – I do all my banking through them.” Perhaps he was worth squillions, but I don’t think so.

Self-importance is one of the main engines behind otherwise intelligent people acting not so much.

The middleware of democracy. Or from knowledge to wisdom: or at least knowledge 2.0

StyrelseSimon Heffer’s High Minds presents us with a portrait of the mid-Victorians in which they consciously set about building the world which became ours. A liberal democratic world.

To do so they recognised the need for all sorts of public goods. Those of education and health surely enough, an honest public service chosen on merit too (an idea they nicked from the Chinese who’d been at it for a millenium or so) and also civic virtue. It’s a stirring and a sobering story reflecting an age which I think had a more balanced understanding of the necessary ecology of public and private goods each reinforcing each other in building the Good Life.

Today for all manner of reasons – intellectual, sociological and economic - our contemporary vision is profoundly skewed toward private good and private endeavour as the paradigmatic category. That’s why I regard it as a happy hunting ground for low hanging policy fruit – a panoply of ways to drive productivity and economic growth that don’t even cost any serious government money.

But as Heffer makes clear, this Victorian quest was not just economic. It was a political project. As he argued in an interview with Geraldine Doogue – which I quote from memory because I can’t find on the ABC website – they knew that democracy was coming, so they needed to get The People a decent education before they used their vote to wreck the place. Continue reading