Information: low hanging reform fruit

My article for yesterday’s Crikey!

It’s been clear for a long while that we’ve picked a lot of the low hanging fruit available in traditional economic reform. Once tariffs get down below 10% not only are the gains from cutting them painfully slim compared with the gains from cutting 50% tariffs but there are also costs which may well outweigh them. Anyway even mentioning this tends to get people very excited. Right now we’re turning the focus on education and health. As a new area of reform it’s not surprising that there’s a bit of low hanging fruit around. Getting better quality teachers in education and focusing systems more on preventative health and reducing cost shifting are good candidates in health.) Still in these areas, the preponderance of social and ethical considerations both in how these services are consumed and produced means that we’ll never really know what’s ideal. Beyond the obvious, worthwhile reform will often be hard, uncertain work.

But there is still low hanging fruit. Information is just one example.  This government has taken hesitant steps to improve information flows in education. Meanwhile Paul Krugman bemoans the blatant conflicts of interest which undermined the integrity of ratings agencies. Ladies and gentlemen, trust me when I say to you that a free market is not the best way of generating information about integrity. Why? Because it’s free to embrace conflicts of interest as Moody’s and Standard and Poors did costing the world economy the odd trillion dollars.  That’s why governments have Auditors General.  Markets free to embrace conflicts of interest are not and never have been the best way of getting information about the integrity of our financial markets – whether this be by way of ratings agencies or the general auditing function. And they’re not the best way of getting good data on whether drugs work. But it’s the model we use.

Trouble is, as in health and eduction, other than identifying some of the worst abuses, it’s not clear what the best possible system is. But removing basic conflicts of interest is basic to picking the low hanging fruit. With Australia’s government having taken the gutsy step of running corrupt investment (cough cough) ‘advisor’s’ commissions out of town, perhaps it can see it’s way clear to making this a general theme of reform.

This entry was posted in Economics and public policy. Bookmark the permalink.
Subscribe
Notify of
guest
22 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
hc
hc
11 years ago

I happened to wander by. I am always interested in a good laugh so I always target your posts on protection policy.

It is good Nicholas that you cite my comment as “very excited” when all I was saying was that you don’t understand basic trade theory and trot out “optimal tariff” arguments that would embarass a neophyte economics graduate. Your claim was that we should keep low tariffs because we don’t exercise optimal tariffs on our mineral exports and I pointed out this was total bull**** and it is.

I notice that no-one today on left-leaning Club Troppo has commented on Labor’s abandonment of the CPRS. Still a tangential post on “eduction” (sic) and “health” is a good start – it is very safe and won’t deter any relationships that might provide a basis for funding future of emerging careers.

conrad
conrad
11 years ago

“Getting better quality teachers in education”

How does that qualify as low hanging fruit, even if we knew what was ideal?

“This government has taken hesitant steps to improve information flows in education.”

As a HEd worker, I can honestly say that information flows forwards, backwards, round in circles, up and down, in convolutions, sums of squares taken from it, kernel densities evaluated, etc. and that it is collected for almost everything you could think of and many things that you couldn’t. But having most of this information doesn’t solve the main problems, many of which are political and well known (e.g., the government doesn’t want to pay the proper price for education and won’t let universities get it from students). I’m less familiar with the primary and high school education system, but it’s hard for me to see how things like the my-schools web site are going to have effect sizes on the overall education performance of children bigger than approximately zero.

So I guess I don’t think the problem is information flow at all (or at least it’s a very minor one), and nor do I think that not being able to identify what the best system happens to be is a problem- – I think we already can identify systems better than now. The NSW high school system, for example, is better than the QLD one, and it’s up to QLD to fix those problems — and they don’t need any more information to do this, they just need to do it.

Andrew Norton
Andrew Norton
11 years ago

“adies and gentlemen, trust me when I say to you that a free market is not the best way of generating information about integrity.

But also an argument for keeping the government out of service delivery, where they have a clear conflict of interest in both delivering and reporting on the service.

James Farrell
James Farrell
11 years ago

Nicholas, with regard to education, and teching in particular, it would help if you were a little more specific about what kind of information gathering and transmission you had in mind.

I’ve posted a couple of times on why publishing school NAPLAN averages is a bad idea. I won’t rehearse the here, but I’d be open to arguments I haven’t considered. Since you made an unfavorable mentione of unions, I’ll add that I support their stance, as does the Principals Association.

As for student feedback surveys, most universities have them for both individual instructors and courses. The results are disseminated to the individuals and their heads of department. So, to echo Conrad’s point (without phrasing it so entertainingly), there’s no lack of information. It’s just that I can’t see that any science whatever is deployed in the interpretation of all this feedback. Unless we know what connection there is, if any, between the students’ tastes and the educational objectives of the institution, the results don’t have much meaning.

Aidan
Aidan
11 years ago

I think I’d be inclined to the opposite view, there is too much information gathering in the public school system. The administrative overhead for all teachers, but particularly principals and senior teachers, is large and increasing all the time.

My mother-in-law was a public school teacher for 35 years (give or take). She was saying the other day that when she started teaching she used to keep a “day book” with notes about students and the material being taught. She used to go through it once a week or so with a senior teacher to ensure she was on track and doing her job properly. By the end of her school career she was producing an order of magnitude more data, reports and who knows what else that just disappeared into a black hole of bureaucracy. No one actually looked at it, or gave her feedback. The volume of the stuff was just too large. Accountability is now about box ticking. The implicit assumption with all this management bollocks is that if you tick the boxes and submit the quality assurance reports, and whatever other hoops are devised then you’ll have the desired outcome. I don’t think that is the case.

Decrease the administrative overhead and let the teachers actually teach I reckon.

conrad
conrad
11 years ago

Just picking on one aspect of this, but when you’re talking about schools and say: “I’d also like to see more interest taken in what students think of the teaching they’re getting”, you’re opening a whole new can of worms, since it’s an entirely corruptable process — As one person I work with that used to be a teacher said to me “the reason inspectors came around to check us was to make sure that you wern’t just making the kids happy by giving them lollies”.

In addition, at least in my reasonably well informed but probably not majority view, I think primary school teaching is really very important — possibly more so than high school (although they are really different things), despite the fact it’s almost never mentioned and often not even thought about in these debates, and you’ll get next to nothing useful from asking kids of that age about their teachers (that’s what happens when you ask 10 years olds things). Indeed, it’s hard to see you getting anything useful from students in all but the last few years of high school when it’s pretty much too late for lots of kids. Oddly enough, many people as adults can reflect on how good certain teachers are, although whether that correlates with reality is unknown.

On a second aspect you mention — I think it is in fact possible to measure value-added performance of schools in more areas than people are willing to admit, and I agree that teaching to the test isn’t bad in some areas (e.g., learning to read, doing algebra etc.). I’m personally not adverse to releasing this information, although, as with the my-schools web page, I don’t think it really does much to overall standards (I don’t think there is any literature that says such information does, and I don’t see too much happening in terms of either government or parent action from the my-schools site, apart from generating publicity). Thus it’s a lot of testing you are going to do for a not very big benefit.

conrad
conrad
11 years ago

“On your allegation that this would lead to much more testing – I’m surprised. Why?”

I guess it depends what quality data you want. If you just want data that has some but not thrilling validity, it doesn’t take long to collect since you can collect it in groups. However, if you want good quality data, and I assume you do for the type of thing you want, then you need to test kids individually (especially young children). Now, I think this second sort of testing is really worthwhile, because even if you didn’t use it for cross-school comparisons, you would identify kids with various learning disorders that would otherwise slip through the system for a few more years, with their problems becoming more intractable to fix. However, if you want this sort of data in a few different areas, then it means that you will have to test each individual kid multiple times with different tests. This does take quite a bit of effort and time and I assume it is why it isn’t commonly done in most schools now.

An example of the type of thing I think is a good measure is expressive vocabulary — or how well kids can communicate and express themselves (versus simply understand things said to them). This is a standard thing that most language tests have (along with a number of other measures of language performance, some of which could be run in groups). It’s also an important measure as it can not only help identify kids with language disorders, but, on a more general level, it will give you a very good idea about how well kids can express themselves — something that hopefully primary schools teachers are helping kids do well, and hence is a good comparative measure (indeed one that you would want if you want a good and valid measure of literacy that would stand up the sort of complaints aimed at many comparative measures). However, there’s simply no way to collect it quickly which I assume is why it’s not generally collected on every kid, despite it’s value.

Tel
Tel
11 years ago

Nick, I was going to draw you out on exactly the same aside, but quicker fingers beat me to it. Presuming the labour market is even approximately efficient, better teachers will require paying more wages (and presumably some other profession must commensurately reduce in both quality and pay), however visibility is the most fundamental of all management tools and in the case of government services the entire public are the ones who need the visibility. I certainly support the idea.

This brings me on a meandering path to making a generic point about the distribution of government information. You might note how hard the teachers have pissed and moaned about standardized tests, league tables and publication of accountable standards. You can fully expect a lot louder moaning, from a lot more directions, as more information gets pushed out to the public because ultimately such publication will cast light into shadowy places and gradually make people accountable — I assure you that very few people are going to be appreciative about facing questions regarding their performance for the first time.

Thus, it is entirely to be expected that any systematic information publication system will face a perpetual threat of corruption and eventual dismantling.

Let us jump to a different example and give the teachers a breather. Consider Kevin Rudd’s BER “Education Revolution” of school buildings. Does anyone want to make a bet on whether Rudd is likely to release, on the Internet, in easily readable format, detailed figures outlining each and every bit of spending in that lot, who got the money, and what was purchased for that money? Admittedly, the dodgy state governments backslapping their mates in the construction game deserve a good bit of scrutiny as well (yes I do live in one of the Eastern states), but with elections not too far off so I expect scant low hanging fruit on that particular tree.

This is exactly the sort of situation where strong public information is desperately needed and it’s set to be the last place where we actually get anything.

On a completely different aside, regarding Standard and Poors. Did anyone notice how they were the last ones to notice the problem with mortgage backed securities in the USA, and also the last ones to figure out that Greece has no intention of ever repaying their debts?

trackback

[…] Club Troppo » Information: low hanging reform fruit […]

munroe
munroe
11 years ago

The low hanging fruit for health and education reform is increased privatisation. It will benefit everyone.

munroe
munroe
11 years ago

Just to expand on that comment, here are some specific points.
1. If you had an education market, you wouldn’t need to measure educational quality, any more than you have to measure the quality of clothing at Westfield, since the market will sort that out.
2. there would be more experimentation and innovation within the marketplace with different ways of teaching kids, and the end result would be a net increase in teaching efficiency, quality and rigor.
3. Poor kids don’t need to miss out, just as poor kids don’t go hungry currently or go without electricity. Let’s have explicit welfare (ie a market followed by helping those who can’t afford to buy in) rather than hidden welfare (the state pays for everyone). We can have subsidies for lower SES just as we do for most other essential services.
4. It’s really obvious that governmnents don’t do a particularly job of educating. I would love to hear one public education proponent claim that they do, because they simply do not. The current system just isn’t that good. Yet people have a blind spot against real reform because of a sentimental attachment to government run public education.
5. pre-school education has a diverse market. Universities do in other countries (most notably in America). There’s nothing sacrosanct about those 13 years in between that means they belong to the government.

conrad
conrad
11 years ago

“It’s really obvious that governmnents don’t do a particularly job of educating. I would love to hear one public education proponent claim that they do, because they simply do not. The current system just isn’t that good. Yet people have a blind spot against real reform because of a sentimental attachment to government run public education.”

I’m not a particular proponent of public education (indeed, I think if rich parents got to pay more to send their kids to public schools, we’d have a better system). Alternatively, at least based on various metrics, how about “Finland”. Or if you want an Australian example, how about NSW? Even public schools in Victoria are pretty good by world standards (try looking up the TIMMS data). Its also worth noting that even the word “private” is of course pretty dodgy in Australia, because private schools get lots of public funding, both directly and indirectly (i.e., teacher training, curriculum development etc.). I think you are confusing “obvious” with “people complaining”.

munroe
munroe
11 years ago

“the word “private” is of course pretty dodgy in Australia, because private schools get lots of public funding, both directly and indirectly”
Yes, but that’s not an argument against them. They’re market driven, and what do you know, they all offer improvements over the state system. Admittedly, this “improvement” sometimes comes in the form of increased religious instruction, but still.
Having a marketplace is beneficial, even if the marketplace is subsidised.
“I think you are confusing “obvious” with “people complaining”.”
Western countries are similar in a lot of ways, one of which is widespread state schooling. I’m not sure of the benefits of comparing our mediocre state schools with other people’s mediocre state schools.

conrad
conrad
11 years ago

“they all offer improvements over the state system”

No they don’t. The average difference in Year 12 scores is about 8-10 points of which some only proportion is attributable to teaching. That’s a difference that certainly worthwhile thinking about, but it means there’s huge overlap between state and private schools.

Also, the extent that both public and private schools are “market-driven” varies a lot too if you look at what they do to get students, and the extent they are willing to use “market-principles”. Most of the top private schools, for example, could charge anything they wanted and still get it, but they don’t. Alternatively, many public schools probably have more effective marketing than private schools.

“Western countries are similar in a lot of ways, one of which is widespread state schooling”

No they arn’t. They range from having almost 100% of kids in public schools, to places like Victoria in Australia where it is about 50%.

munroe
munroe
11 years ago

“No they don’t.”

Like I said, the “improvement” is not always in test scores. Sometimes it’s simply an environment that’s more closely aligned with the parents’ social, religious, per personal values.

“Most of the top private schools, for example, could charge anything they wanted and still get it, but they don’t.”

I doubt this. Most markets can only afford a very small number of premium brands.

conrad
conrad
11 years ago

“Like I said, the “improvement” is not always in test scores”

I still don’t see how that qualifies as “all” — especially because most public schools try and please the parents, just like private schools (I have a really excellent public school down the road from me, for example, and it has caused house prices to rise immensely, which pretty much has the same effect as charging fees on who goes there). Until you actually collect the data, what you are saying is really an empirical question.

The real problem is of course that you (or any other parent) can’t easily compare on the things you are thinking about without sending your kid to 15 different schools to find out. That’s one of the problems with schools — there’s a big cost in moving, but you don’t whether it is suitable for your kid until it is too late (and there’s almost no way of finding out on many things). My next door neighbour, for example, sent all of his kids to the really excellent public school. However, the third hated it (they’re big on music, arts, being cool and alternative etc., which this kid didn’t like), so he moved her to a non-elite public school down the road, and she thought it was just fine and did really well. So what’s good, bad or indifferent, is really child dependent (no doubt you can just have “bad overall” but most schools don’t qualify for this, whether public or private), which makes matters even more complicated.

“I doubt this. Most markets can only afford a very small number of premium brands.”

Well, you could try calling the top private schools and see how easy it is to get your kid in, which will answer your question (e.g., in Melbourne, for example, you could try Carey etc.). I’ll save you the bother, and tell you that you can’t unless you put them in the enrollment list in 1982 when they were born (you get the picture). If they really cared about making money and market forces (which they don’t as far as I can tell — they’re all non-profit after all), they could open new campuses all over the place, but they don’t or they do it rather slowly like Haileybury has.

These sorts of reason are why I think that people that think getting rid of public schools would causes massive increases in overall performance are wrong. To me, the biggest benefit would be getting more money in the system, which we’ll need in the future if you want good science teachers and other hard to find groups. I don’t see “market forces” being especially strong, and that doesn’t even consider areas which are basically a monopolies (i.e., there’s really no where else to send your kids).

munroe
munroe
11 years ago

The real problem is of course that you (or any other parent) can’t easily compare on the things you are thinking about without sending your kid to 15 different schools to find out.

There are lots of ways that the market sends signals. It’s not just about the consumer having maximally informed choices at a given moment. It’s also about attrition over time.

Well, you could try calling the top private schools and see how easy it is to get your kid in, which will answer your question

A very interesting observation; I’ll have to think about this some more.