Michael: Federalism is a fantastic thing in the sense that you can have competition that
can lead to better outcomes.
But, I know this, that you can also have the possibility of pockets of sort of backwardness
happening and not much to change those.
Nat: Michael Mintrom.
Thank you for coming to AEI.
Michael: Thank you.
Nat: So, you've got a new book out, "Public Policy," aptly named.
But, inside your book, you're actually bringing forth an argument and it's about investment-based
policy making and policy analysis.
Why investments?
Give us a thumbnail of your argument.
Michael: Okay.
Well, when I was thinking about public policy in general and where are we in terms of what
governments do in the world, I felt that there was a lotta instances out there where governments
are spending a lotta money on programs that aren't well evaluated.
There's a question about whether they're good value for money.
And we really don't know why is it that we've got them in place other than that they've
been around for a while and they seem to have political support.
So, I was quite interested in developing a way of thinking about this where we actually
say, "Are policies developing a good return on investment?
Are they really doing for society the best they can?"
Nat: And, how do you ask governments to go about determining where investments are paying
off?
Michael: Well, it's actually using a lot of the approaches that they've already got in
place, but they just don't pull them all together.
So, it's saying, evaluate something and figure out what you're trying to achieve here, and
how much is it costing.
So, you can do cost-benefit analysis, combine that with evaluation, and get a sense of what's
the return on investment.
So, in terms of early childhood education, an area like that, we can figure out through
analysis what kinda programs work well and what gains for society we get from them.
But, often we don't do that.
Nat: Right.
Now, of course, governments, they make decisions using evidence to make policy, and sometimes
policy to make evidence.
I'm just curious, what's the balance here in practice that you see between sort of the
political side of decision making and the analytical side that might focus more on strict
investments?
Michael: Well, I guess I'm thinking about a way of doing policy analysis that's a bit
different from currently done or at least some of it is done this way at the moment,
but I think a whole lot more of it could be done.
So, I'm thinking of that as a kind of a counterpoint to the politics of it all.
And, I don't wanna discount politics, I mean, there's always going to be politics around
policy making, that's for sure.
But, I do think that the analysis could be done in a way that is more consistent and
could actually give politicians better information upon which to make their judgments than they
get right now.
Nat: Right.
I've leafed through the book.
You have one really interesting example, the Williamsburg Bridge in Brooklyn.
Can you just tell me about that example and how perhaps an investment approach to taking
care of that bridge could have been a little more advantageous?
Michael: Well, it's an interesting case where a new bridge was built.
And I guess it was needed and there was a lot of respect for the fact that it was built,
but then the politicians moved on to other things.
So, they didn't actually care about routine maintenance.
And in fact it was, and it seems unbelievable but it's actually true, that it took about
75 years before any routine maintenance check was done to see how the bridge was going.
And, when that happened the engineers were kinda shocked and said, "We've gotta do some
serious structure work on this bridge in order to get it up to standard or we could run the
risk of a catastrophe."
Nat: Right.
Michael: So then the focus became, "How do you do maintenance on the bridge without having
to shut it down, which would create all sorts of traffic havoc?"
But, I think the bigger picture, and why I focus on it in the book, is that in fact if
they had done routine maintenance in those 75 years previously, like every five years
they'd gone and done a serious inspection and done the maintenance that was necessary,
they would have saved themselves much more than what they had to spend as the bill after
leaving it for so long.
So, it is similar to an individual not going to the dentist for many, many years, and then
going and having to do a face full of fillings and all the rest of it.
It's that kind of thing.
But, I think it's a metaphor for...we can think of the bridge as a metaphor for a lot
of things in infrastructure maintenance throughout the United States or other countries.
But also maybe we could think about it even more broadly in terms of some sort of social
programs too.
Nat: Right.
Well, it's interesting to bring the idea that governments that are politically driven can
be very animated by a new program, but sustaining programs, making sure they're well funded
and sustainable over the long-term, not always the politicians' first foot forward.
Michael: That's right.
And I've always sort of thought that it makes sense that politicians love to announce new
programs, not necessarily do stuff on the old stuff that's in the background.
And I was talking about this one day and someone came up to me and said, "I'm not sure that
politicians always get kudos just for the shiny things too.
In a world now where we're thinking a lot about renewing things and conservation and
that kind of thing that in fact there could be a way that politicians could get political
mileage out of talking about maintenance."
I'm not sure, but I like the thought process.
Nat: There's always the hope that the politicians will move closer to the side of the policy
analysis.
Michael: Well, it's kind of a point really about the politics of reframing actually and
saying, "Well, what are other things that we should be caring about here?"
You think about the U.S., there's a lot of fantastic infrastructure in place, wonderful
airports, and subway systems, and all the rest of it.
But, with a bit more routine maintenance they could be that much better.
Nat: Right.
So, you know I study education, American education primarily.
What are some ways that an investment approach could help inform U.S. education policy and
inquiry, and maybe political decision making?
Michael: Well, I'll give you an example on that that I think is one that lots of people
would've thought about, and as a parent, I think this.
You kinda like small class sizes.
A small class size is better than a bigger class, but in fact, when states have tried
to introduce small class sizes they've often had pretty unhelpful results.
California experimented with this and spent a lot of money.
One of the things that happened was that they found that teachers going into the classroom
sometimes were less qualified than they would have been.
They needed many more teachers in order to be in there.
So, they didn't get the bang for the buck that they were hoping for from the small class
size.
This is where the kind of analysis that I've been talking about in the book and advocating
could really help out.
There's an education scholar called John Heady and he's gone...done a lot of careful analysis
of a whole range of different programs and made an analysis.
And what he shows is that actually very well-trained teachers can do a lot with classes that are
fairly big.
So, class size doesn't really matter.
What he says is that it's much more about the way that they teach and the feedback they
give to students.
So, you can get a bigger return on investment from the training of teachers than you could
from the size of the classroom itself.
Nat: Sure.
It's interesting.
One of the things that you bring up in the book is that a lot of these new programs and
things that we evaluate are marginal changes, they're not inventing things out of whole
cloth.
While on the one hand, I see the utility of that, on the other hand, I worry that a focus
on sort of assessing marginal changes to existing programs means that big leaps, big risks,
might be out of favor in this investment framework.
Am I wrong?
Michael: It's a good point.
I think that there's a risk actually.
On the other hand, the general approach is saying, "We've got a lot of evidence out there,
and we just have to use it in a smarter way."
And, also, one of the things that I talk about in the book is not necessarily feeling like
we need to use evidence from the particular program that we're interested in to make adjustments
to it.
So, it might be, and this is perhaps how you start to make the leap, you could look around
and say, "Well, you know let's take an interest in what they're doing in Singapore with respect
to criminal justice or what they're doing in Finland with respect to education and how
can we kinda replicate that here?"
So, that would be how you could make the big shifts.
Nat: Sure.
So, you've done work in New Zealand and are now in Australia, but America has a federalist
system of education.
So, we have 50 states to do this in.
Is that an advantage for us to sort of learn from each other?
Michael: I think it is.
I think that federalism is a fantastic thing in the sense that you can have competition
that can lead to better outcomes.
But, I know this, that you can also have the possibility of pockets of sort of backwardness
happening and not much to change those.
So, I like the federal system in the sense that, with respect to education, you could
actually look across 50 states and say, "Which states are doing things really well and how
can we learn from that kind of thing?"
I guess what you're getting at is that the mechanisms for change are not necessarily
there.
So if Wisconsin's doing something fantastic it's not necessarily the case that one of
its close neighbors is gonna pick up on it for example, or other states are gonna look
to it, or they might look to it and say, "But, it's not the same for us."
So, that's always a risk.
Nat: A big piece of this is evaluating what we do, measuring our impacts, measuring how
much we spend on the programs, and putting actual investments in getting the information
that we need to make wise investment-based decisions.
How would you say we're doing on making sure that that evaluative information is coming
out from government programs?
Michael: I think we're getting better at it.
And I think there's much more awareness now of just how important evaluation is.
I think that the next part that we're gonna be getting into is actually talking about
getting some standardization across the evaluations that are done.
It's a tough one.
And, I mean, I'm not saying we can do this in the next year or two or anything like that.
I think it's a long-term, probably a few decades it will take.
But, if you think about this, if we could get a situation where there's more common
agreement on what a really good cost benefit analysis looks like in a particular area,
say of education or what a good evaluation looks like, then there's a possibility that
knowledge that's generated around a particular program in New York could very well inform,
could actually...there's no reason why it couldn't inform what's going on in a school
or a school system in, Texas for example, or similarly internationally.
So, maybe there's a space for particular organizations like the OECD to get involved and help to
coordinate so that we don't get a whole lot of over-assessment or over-evaluation of certain
programs and losing out on evaluations of others, but we can actually learn from things
in that way.
Nat: Sure.
So, Michael, there's one other case in the book that I thought was really interesting,
and that's the nuclear power plant case, which has sort of two angles.
One, the role of government and the other the role of private enterprise in this investment
logic.
Can you talk about that one?
Michael: Yeah.
So, when I was looking at the cases of infrastructure investment in the United States, I notice
that nuclear power plants had been deregulated, I think it was in the 1990's.
And as a result of that deregulation, there was quite a lot of consolidation of ownership.
Now, a couple of things are worth considering here.
One is that when the local authorities that had been governing the power stations sold
them off.
They had revenues that they could spend on other things and that's freeing up resources
in some ways.
But, just as interestingly, a few large companies bought up these power plants.
And as a result of sort of having good operating procedures across the system, they got much
better at doing maintenance, routine maintenance, more efficiently.
So, the plants were running for longer each year than they had been under the more decentralized
public ownership.
And, I think probably people thinking about nuclear power plants, there's always that
worry about safety.
But in fact, the safety records of the bigger companies running the plants, in fact, got
better.
And I think that, again, is kind of an efficiency, a scale efficiency, point.
Why I sort of focus on that is this.
There can often be times when we have a technology that's perhaps a little bit uncertain or some
aspects of doing something saying, "This would be a good thing to do.
We're just not quite sure about it."
Maybe it makes sense for government to be involved early on there and certainly in terms
of developing a lot of infrastructure.
In many countries in the world, government's been there in the early stages and that could
be the case with power plants, also for telecommunications.
But as the technology gets known and understood and becomes stable, there's no reason why
it needs to remain in government hands.
So it could then be passed over to the private sector or privatized, they're set up as state-owned
enterprises and then privatized for example.
And, I think it's really important to think of that as an investment as well and not just
think that government needs to introduce whole new programs or new ways of doing things,
but you can actually make some quite interesting kinda incremental adjustments that will have
positive returns to society.
Nat: Sure.
So, my last question is something on the limits of the investment mindset.
On the one hand, and we can think of this as a private-public distinction, even if that's
just illustrative, on the one hand, there's a number of folks, including me, who will
argue that often times private enterprises can be more efficient than public enterprises
because they're focused on narrow goals.
The investment framework really works for them because oftentimes profit is the driving
motive.
Public enterprises, government, in particular, they have lots of competing goals.
And so defining those goals that then the investments can work towards, right, What
is the return that we want from our investment?
Seems like it can muddy the water.
How do we square that circle?
Michael: Look, I'm not gonna pretend that it's easy stuff, this is tough stuff.
But, I think one of the things that we gotta start doing more is actually say, "Row to
the start.
What are the things we're trying to get out of this area?
What's the public value we're seeking?"
So, with respect to education or healthcare spending, any area of spending, environmental
policy, what are the goals that we have here and try and actually innumerate those.
And there may be cases where there are some goals that a lot of people agree on and then
there are others that we don't.
So, look at the ones where we have a common agreement and then start saying, "Well, if
that's a goal that a lot of us want to achieve, what would be the best way to achieve that?"
On that, we would actually look around and say, "Well, where else have we actually seen
it?
What are some really good operating examples of achievement of those goals and how could
we start thinking about taking investment approach there?"
So, that would be my first point.
It's not to discount the politics, but as you say, within it there are some things we
can do.
And, the bigger project I suppose that I'm trying to put forward here is to just say
that I think that our policy advising could become even better than it is right now, and
that's being a bit more systematic about stuff, but actually starting to do something.
I don't think we've been, as a profession, been particularly good at, is actually drawing
comparisons across spending, let's say on defense versus education, versus health care,
versus infrastructure, science funding or the rest of it.
So, putting it all together there and saying, "What do we actually know, and how can we
move forward?"
That's been a big thing to me.
Nat: Well, it may be a way to bring a bit more discipline to political decision making.
And, if so, I'm all for that.
Michael Mintrom, thanks for coming by AEI.
Michael: Thank you very much.
Nat: Hey everyone.
That's the end of our discussion with Michael Mintrom.
Thanks for watching.
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