Archive for the 'politics' Category

Doing broadband better

June 30, 2017

 

A What Works Centre post I thought would be good here too.

 

Our new broadband toolkit takes a look at how policymakers (nationally and locally) can increase broadband takeup.

Why do we care about this? From a social point of view, it’s increasingly clear that decent internet access is a citizen right (especially as many public services are being shifted online). From an economic angle, evidence from our broadband review shows that household broadband takeup can have positive effects on house prices, female labour market participation, employment, firm growth, and economic growth. (Household adoption is also strongly linked to firm adoption.)

With that in mind, the toolkit looks at three different areas where public policy can step into the market.

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The first toolkit looks at direct public and public-private provision. EU State Aid rules limit what member governments can do here, but even so there is room to provide networks in rural areas. And if Brexit means these rules no longer apply, the UK can (potentially) make big investments.

We find that direct public provision raises broadband takeup, even in countries like the US where the private sector is already active. We also found a study of an Italian programme that successfully raises takeup in rural areas. Crucially, though, the US evidence suggests that provision on its own is only half as effective as provision combined with info/education on broadband’s benefits.

Frustratingly, it’s hard for us to say much on cost-effectiveness on the basis of the available evidence; although it’s clear that there are huge variations in programme costs across countries. Some of this reflects physical ruggedness (Norway is tougher to pipe than the Netherlands), but there may also be potential to deliver schemes more smartly than the UK currently does.

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The second toolkit looks at ‘local loop unbundling’ – essentially, opening up the last mile of broadband networks to all-comers. Currently only BT is obliged to do this in the UK, but in theory, national government could bring cable providers into the scope of the legislation. There’s also the question of access fees and other arrangements.

The argument against LLU is a simple one: firm X has invested in a very expensive network, so why should others get the benefit, and why should X invest more in future if they are forced to open up access? (In BT’s case this is complicated by the company’s history as a state monopoly.) The counter-argument is also simple: the wider benefits to society (via higher broadband takeup) outweigh losses to a single firm, which can in any case be compensated through charging for access.

The available evidence shows a pretty clear impact of LLU on household broadband takeup (it’s less clear for firms). Across the EU, between 2000 and 2010, LLU raised household broadband adoption by 15%. Perhaps surprisingly, the majority of studies also find no evidence that LLU crowds out future investment by the network owner, and in one case, may even lead to upgrading. This seems partly explained by relatively high access charges in most countries.

We’d urge some caution here though. For the UK, the positive effects of LLU have decreased over time, as broadband rollout covers more and more of the population. That might change if future technology gets a lot better, but this seems unlikely any time soon. Setting lower access charges would also bump up the adoption effect, but also risks discouraging future investment.

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The third toolkit looks across other tools that Governments have used to nudge providers and users: incentives (loans, subsidies, tax breaks), information campaigns, and demand-side measures such as buying clubs and bulk purchasing.

Sometimes policy works directly with providers (ISPs); at other times the nudges are applied to users (firms and households). Does it matter which? Not from the point of view of take-up: we find evidence that both kinds of measure can be effective. Specifically, we find that loans to ISPs and demand aggregation measures like buying clubs have the effect of raising downstream takeup. For direct-to-user policies, subsidies, training and providing computers are all effective.

For providers, a cross-OECD study finds that a bundle of producer incentives have the effect of raising fibre uptake by 10% (from slower copper networks). On the user side, a US study shows that a partial loans scheme for farms raised broadband takeup by 13-14% points.

Again, it’s not easy to figure out cost-effectiveness, but we estimate that typical household programmes cost £1.1-1.3k per extra connection, with the farms scheme above costing around £3-4k per farm connected.

The UK has strongly pushed programmes like this, notably the last government’s SME broadband voucher scheme. Sadly, this has had no proper evaluation done (something we’d like to see change for future schemes) – although a user survey was published which (perhaps not surprisingly) found that voucher recipients were very happy with £3k off the cost of a fast broadband line …

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Originally posted here on 23 June 2017.

YouGov called the election right. How?

June 30, 2017

This General Election has been full of surprises. So I’ve been digging into the YouGov MRP voting model, pretty much the only one that got the 2017 Election result correct.

Given all the current humble pie and book eating by pundits who didn’t spot the result coming, this seems worth doing. I also think there are also some useful takeaways for cities, especially as devolution rolls on.

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YouGov’s MRP (multilevel regression and post-stratification) method not only got the national result right, but correctly predicted results in 93% of seats. Compare this to most other polls [£, and chart below]. The model somehow also predicted the Canterbury result, where Labour won for the first time since 1918.

It turns out that earlier versions of an MRP model also spotted the Leave vote in 2016, and did pretty well in the US 2016 Presidential Election. Though this version seems to have worked better, for reasons I’ll come back to.

Remember, this is a predictive method — how might people vote in the future? — that did about as well as the main exit poll — which asked people *how they just voted*. (John Curtice has more on how UK exit polling is done here.)

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So how does the MRP model work? Here’s an overview: this gives us the main features but not surprisingly, doesn’t reveal all the datasets or the functional form/s. YouGov describe this as a Big Data approach; it seems to involve bespoke data and data science methods, but also lots of public datasets, aka ‘administrative Big Data’. The key steps seem to be:

1/ YouGov have weekly individual-level data on voting intention and detailed characteristics (including past voting). They run around 50k online interviews per week, and anyone can sign up;

2/ They use this to build a typology of voter types;

3/ For each voter type, they then fit a model that predicts voting intention;

4/ For each constituency, they then estimate how these types are spread (using public resources like the British Election Study and other ONS resources, perhaps these);

5/ They work out how the vote should go in each constituency.

By contrast, traditional polls tend sample about 1,000 people, then project direct from respondents to the whole UK, using weights to compensate for demographics, voting intention and so on.

This helps us see why an MRP approach might work better than conventional methods.

First, MRP has a much bigger starting sample. More observations = sharper results.

Second, MRP is micro-to-macro: it models each constituency individually, so stands a better chance of picking up local issues (such as the hospital closure crisis which helped drive the Canterbury result).

Third, MRP is both fine-grained and high-frequency. The only pundits to pick up on the reality of #GE2017 got out there on the ground. Given the complexity of UK politics right now, we also need methods to get at this complexity in a structured way.

Fourth, MRP methods should get better over time. you end up with loads of high-frequency training data, and this progressively makes the model better.

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This doesn’t mean that conventional polling has had its day – e.g. Survation were also on the money. But it’s notable that most conventional polls fell over this time, just as they did in the 2015 General Election.

I suspect that these four factors helped YouGov pick up higher turnout for younger voters faster than most pollsters (and many mainstream journalists), as well as shifts in other age groups. This post by Ben Lauderdale, one of their chief modellers, seems to supports that. (Note that we won’t know turnout by age for sure until the next BES in a few months. If modelling can get us to a decent understanding faster, that’s very useful.

As Sam Freedman points out, it also helps show precisely, and in close to real time, the huge damage the Conservative manifesto did to the party’s chances.

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Micro-to-macro techniques like MRP could beuseful for Mayoral elections and city politics. With a 50k in sample, could you train the model on a city-region like the West Midlands using public data? If so, this feels much more useful and adaptable than one-off traditional polling.

YouGov say their model works at local authority level, so some version of this could probably be done now. However, I suspect that even a big national sample might be too sparse for very local analysis, say at neighbourhood level. In this latter case, you could also imagine building a richer, locally-specific model for a whole conurbation — like the West Midlands or Greater Manchester — using a big base of local respondents.

This would be expensive — but for a local university, or a group of them, it would be a super interesting (and public-spirited) long term investment.

Birmingham University’s city-regional lab City-REDI will be exploring this further in the coming months.

Citizen Jane

May 8, 2017

Like a boss.

We went to see the new Jane Jacobs documentary Citizen Jane: Battle for the City. It’s pretty good, with plenty both for Jacobs fans and those who don’t know her work. It pulls in some big-name contributors, including Saskia Sassen, Michael Sorkin, Mindy Fullilove, Mike Davis (!) and Geoffrey West (*). But it also – perhaps unintentionally – shows up some of the limits of Jacobs’ thinking as it applies to today’s cities. Here’s a review of sorts.

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The film has two particular strong points. The first is the precis of Jacobs’ most famous work, The Death and Life of Great American Cities. Director Matt Tyrnauer nicely summarise the key ideas: cities as organised complexity; street life as a ‘dance’ of uses and users; the rebellion against modernist city planning, cities for the car, and high rise living; the importance of ‘eyes on the street’, mixed uses, old and new buildings, and short blocks – concepts now hard coded into masterplans and design standards in cities across the world. Crucially, these ideas developed over many years’ close observation of New York streets and neighbourhoods, and through test runs in Jacobs’ journalism: her first book arrived in the world fully formed and ready for use.

 

 

The film’s other big plus is its retelling of the epic struggle between Jacobs and city planner Robert Moses in 1950s and 60s New York. With minimal resources, Jacobs somehow turned around Moses’ big money plans to bulldoze and run roads through Washington Square Park, the West Village and ultimately Lower Manhattan itself. These are perhaps the most gripping parts of the picture. Moses is a monstrous figure – see also Robert Caro’s 900-page biography, summarised here by Jackson Lears – while Jacobs is revealed to be a total badass.

Machine politics, corruption and the abuse of power run up against agile and well-networked social activism: we see Jacobs wearing a ‘Mailer for Mayor’ badge, organising a series of brilliant publicity stunts and photo opportunities, and roping in Susan Sontag, Margaret Mead and Eleanor Roosevelt to help out.

 

 

The gender dynamics are striking. Moses summons an army of besuited male planners, and notoriously dismisses Jacobs’ female-led network as ‘just a bunch of mothers’: fatally underestimating his opponents, but also, as a talking head points out, ’you’d only say that if you thought people didn’t matter at all’. Jacobs’ publisher sends Moses a copy of Death and Life: he returns it in a terse note (‘Sell this junk to someone else’); Lewis Mumford dismisses the book as ‘Mother Jacobs’ Home Recipes’.

The filmmakers link Jacobs’ tactics and successes to other 1960s social struggles: feminism, the environmental movement, civil rights. There’s an important point here about shared repertoires of protest tactics. It’s also true that Jacobs was both a feminist and an environmentalist. But I needed a bit more convincing that the bigger links really held together.

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The racism in US post-war urban planning is still shocking to see. James Baldwin appears in the film to point out that ‘urban renewal means negro removal’, with housing projects and highways used as tools of segregation. The minority urban poor were pushed into badly designed blocks at the city’s edge, just as in France the following decade – with similarly grim results for the victims.

The film starts to connect these practices to Moses’ development model, which raised land values in redeveloped zones, and leveraged huge federal budgets. I was left wanting to know more about the political economy: was this racial redlining? Patronage politics? Or some toxic mixture of the two?

The Cross-Bronx Expressway (1948-72) is perhaps one of the most notorious Moses schemes, literally cutting the neighbourhood in half and blighting lifechances for years afterwards. As Mike Davis points out, it’s ‘perhaps the single most damaging urban development in US history’. Jacobs was active in New York at the time, and the film is curiously silent about this. Was she involved in opposing this? If not, why not? Did she try and fail? (Was her model of protest anchored in the neighbourhoods she knew? Did construction help spur her into action elsewhere in the city?)

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If the film is sometimes in danger of reifying Jacobs’ older ideas, it also misses out some of her newer thinking. That’s a shame: The Economy of Cities (1969) is a foundational text in urban economics, with important ideas about how cities help innovation to happen, long term growth and urban resilience. Cities and the Wealth of Nations (1985), which posits cities over nation-states as the key unit of development, feels ahead of its time. And her environmental work – which I know less well – also looks increasingly prescient.

The film also skips some chances to reassess that legacy. Jacobs was a progressive and a futurist – but not a fan of big government. Her anti-planning stance has made her popular with the libertarian right: it’s the antithesis not just of the government cynicism that produced Pruitt-Igoe and Ronan Point, but also the state-funded optimism that gave us the LCC and Park Hill.

Sure, the Lower Manhattan Expressway would have been a concrete stake through the city’s heart. But I dare you not to look at the renderings and at least wonder what a Brutalist icon it would have made.

 

 

Some of the limitations in Jacobs’ vision become clearer in the second half of the film, which lays up Jacobs’ neighbourhood prescriptions against urbanisation outside the West. As Saskia Sassen puts it, the pace and style of urbanisation in the urban cores of China and India are ‘Moses on steroids’ . ‘How can we apply Jane Jacobs’ thinking to these cities?’, asks another contributor.

Good question. The film drops some hints: successful urbanisation can’t shut out the public realm; cheaply-built towers are a terrible false economy; existing urban settlements, however visually shabby or informal, embody their own ‘dances’ and should be valued by planners, not bulldozed away (see Stewart Brand for more on this).

Nevertheless, the film can’t escape the conclusion that Death and Life … has plenty of say about preserving old neighbourhoods in old cities, but rather less about building new ones:  Jacobs’ New York was losing population, as their heavy industry began to be globalised away; the cities of the BRICS are growing at speed. Equally, today’s New York is struggling with an affordable housing crisis; other US cities are still feeling the aftershocks of de-industrialisation.

As Jacobs put it in 1958: ‘the best way to plan a downtown is to see how people use it today; to look for its strengths and to exploit and reinforce them.’ Today’s urban crises need urgent solutions, and significantly, by her death in 2006, Jacobs didn’t seem so interested in these issues: as her last interviews show, she had moved on to other things.

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The film is a great appreciation of Jane Jacobs’ finest hour. Her elegant and radical thinking was inevitably a product of its time. But bettering our contemporary cities may require both a re-tooling of Jacobs’ ideas, and new thinking from other voices.

A modern industrial strategy

February 3, 2017

A What Works Centre post I thought would be good here. Written with Henry Overman.

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Much has already been written on the UK Government’s Industrial Strategy Green Paper. This post isn’t intended to provide an overall assessment or spell out our individual views on the approach being set out (they differ, depending on which of us you ask). But there are areas where the proposed strategy will shape the work that we’ll do at the Centre and where we also hope that our work will influence the implementation of the eventual strategy.

[Full disclosure – the Centre is cited in the document as one of the institutions the Government hopes will help improve local economic growth.]

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The first area relates to what we do and don’t know about policy effectiveness, particularly when it comes to some of the Strategy’s 10 pillars – which are a mix of tech (science, research and innovation) cross-cutting (skills, infrastructure, supporting business growth, procurement, trade and inward investment) and sector (new sector deals, clean energy). Academics would call this a ‘matrix’ approach.

Take, for example, policy to support business to start and grow. We know that there are market failures here – entrepreneurs often make avoidable mistakes, which better information could help fix; many young firms need better access to early stage finance (the Green Paper talks about ‘patient capital’).

The crucial question is: what’s the right policy mix to help address these challenges? Our evidence reviews on business support and on access to finance suggest that around half of schemes have measurable impact against policy objectives but around half don’t. Our reviews and associated toolkits start to identify the elements that might go in to the design of a more effective set of interventions. And we’ll soon be publishing more toolkits on incubators, accelerators and science parks. All this material provides guidance on how we might improve support to businesses but major challenges remain – both in terms of gaps in our understanding and embedding the evidence in policy development.

We are in a similar position when it comes to policy to develop skills. We know quite a lot – see, for example our evidence reviews on employment support and apprenticeships and our toolkit on training (soon to be supplemented by a toolkit on apprenticeships). Changes to policy design can improve effectiveness but, once again, there are gaps in our knowledge and challenges in implementation.

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Things are more complicated when it comes to investing in science and promoting innovation. We can say something about the specific policy tools – e.g. from our evidence reviews we know that both R&D grants and tax credits drive up innovative activity. But it’s not so clear whether increased innovation at the firm level feeds in to improved local economic performance and there are lots of unanswered questions about the appropriate policy mix. That ambiguity is one of the reasons why people advocate such different approaches to strategy.

In the interests of openness – we should note that one of the things our review did find was that grants and loans programmes that target particular production sectors appear to do slightly worse in terms of increasing R&D expenditure and innovation, compared to those that are ‘sector neutral’. So, while it makes sense for government to recognise that different sectors might need different policy responses (e.g. in terms of the institutional structure that supports those sectors) this might increase the challenge of effective policy implementation in some of the other policy areas.

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Questions of infrastructure are similarly challenging. The evidence that we do have on the link from transport to local economic growth raises some questions about the effectiveness of these policies for turning around areas that are struggling. But at the same time, we know that such investments can help drive growth in areas where travel times and congestion are a big issue (and not all of those areas are in London and the South East). Getting the right balance will be crucial.

As with innovation expenditure, people are willing to advocate for very different approaches – particularly when it comes to the overall pattern of expenditure. We’ll continue to make the case that focussing on the overall pattern of expenditure isn’t helpful when it comes to shaping effective policies. What we need is a better understanding of the economic impact of different schemes and improved ways of feeding this information back in to decisions about scheme prioritisation. This will be where our work will focus in the coming years.

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We could make similar points about the other pillars, but in the interest of space, let’s turn instead to a final cross cutting issue – whatever happens we think that to be successful, industrial policy will need to be inherently experimental. How we deliver and develop the policy will matter a lot.

Industrial strategy is always going to involve unknowns. Most fundamentally, because it involves funding basic science (or commercialising new ideas) – not all of which are going to work out, so wouldn’t be delivered by the market. In other cases, investments will trigger spillovers between parts of the economy that are hard to see upfront.

Finally, unknowns crop up because – for a lot of the things Governments want to do as part of industrial strategy – we still have a long way to go in understanding what is an effective policy mix. In addition to the policy areas covered above, at least three of the Pillars – strategic procurement, innovative place strategies, and institutions – are subject to big knowledge gaps in terms of what works. As a result, how we implement future industrial strategy will be crucial.

As you might expect, we will be arguing for an experimental approach. We need to test lots of different ideas, figure out what works, scale up the things that do and drop those that don’t. Many of those calling for a more interventionist policy – such as Harvard’s Dani Rodrik – have consistently emphasised this point. Many people have argued that the Green Paper’s approach isn’t such a fundamental break with the past. But a greater focus on flexibility, on experimentation, and on testing and improving, would help differentiate this from the past and increase the chances of success where so many other strategies have failed.

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Originally posted here on 27 January.

Evidence in a post-experts world

October 11, 2016

(c) The Thick of It / BBC

Something I wrote for the What Works Centre that I thought would be good here too.

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The What Works Centre for Local Economic Growth is three years old. So what have we learnt?

Two weeks ago we were in Manchester to discuss the Centre’s progress (the week before we held a similar session in Bristol). These sessions are an opportunity to reflect on what the Centre has been up to, but also to think more broadly about the role of evidence in policy in a post-experts world. In Bristol we asked Nick Pearce, who ran the No 10 Policy Unit under Gordon Brown, to share his thoughts. In Manchester we were lucky to be joined by Diane Coyle, who spoke alongside Henry and Andrew on the platform. Here are my notes from the Manchester event.

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Evidence-based policy is more important than ever, Diane pointed out. For cash-strapped local government, evidence helps direct resources into the most effective uses. As devolution rolls on, adopting an evidence-based approach also help local areas build credibility with central government departments, some of whom remain sceptical about handing over power.

Greater Manchester’s current devolution deal is, in part, the product of a long term project to build an evidence base and develop new ways of working around it.

A lack of good local data exacerbates the problem, as highlighted in the Bean Review. The Review has, happily, triggered legislation currently going through House of Commons to allow ONS better access to administrative data. Diane was hopeful that this will start to give a clearer picture of what is going on in local economies in a timely fashion, so the feedback can be used to influence the development of programmes in something closer to real time.

Diane also highlighted the potential of new data sources — information from the web and from social media platforms, for example — to inform city management and to help understand local economies and communities better. We think this is important too; I’ve written about this here and here.

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So what have we done to help? Like all of the What Works Centres, we’ve had three big tasks since inception: to systematically review evaluation evidence, to translate those findings into usable policy lessons, and to work with local partners to embed those in everyday practice. (In our case, we’ve also had to start generating new, better evidence, through a series of local demonstrator projects.

Good quality impact evaluations need to give us some idea about whether the policy in question had the effects we wanted (or had any negative impacts we didn’t want). In practice, we also need process evaluation — which tells us about policy rollout, management and user experience — but with limited budgets, WWCs tend to focus on impact evaluations.

In putting together our evidence reviews, we’ve developed a minimum standard for the evidence that we consider. Impact evaluations need to be able to look at outcomes before and after a policy is implemented, both for the target group and for a comparison group. That feels simple enough, but we’ve found the vast majority of local economic growth evaluations don’t meet this standard.

However, we do have enough studies in play to draw conclusions about more or less effective policies.

The chart above summarises the evidence for employment effects: one of the key economic success measures for LEPs and for local economies.

First, we can see straight away that success rates vary. Active labour market programmes and apprenticeships tend to be pretty effective at raising employment (and at cutting time spent unemployed). By contrast, firm-focused interventions (business advice or access to finance measures) don’t tend to work so well at raising workforce jobs.

Second, some programmes are better at meeting some objectives than others. This matters, since local economic development interventions often have multiple objectives.

For example, the firm-focused policies I mentioned earlier turn out to be much better at raising firm sales and profits than at raising workforce head count. That *might* feed through to more money flowing in the local economy — but if employment is the priority, resources might be better spent elsewhere.

We can also see that complex interventions like estate renewal don’t tend to deliver job gains. However, they work better at delivering other important objectives — not least, improved housing and local environments.

Third, some policies will work best when carefully targeted. Improving broadband access is a good example: SMEs benefit more than larger firms; so do firms with a lot of skilled workers; so do people and firms in urban areas. That gives us some clear steers about where economic development budgets need to be focused.

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Fourth, it turns out that some programmes don’t have a strong economic rationale — but then, wider welfare considerations can come into play. For example, if you think of the internet as a basic social right, then we need universal access, not just targeting around economic gains.

This point also applies particularly to area-based interventions such as sports and cultural events and facilities, and to estate renewal. The evidence shows that the net employment, wage and productivity effects of these programmes tends to be very small (although house price effects may be bigger). There are many other good reasons to spend public money on these programmes, just not from the economic development budget.

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Back at the event, the Q&A covered both future plans and bigger challenges. In its second phase, the Centre will be producing further policy toolkits (building on the training, business advice and transport kits already published). We’ll also be doing further capacity-building work and — we hope — further pilot projects with local partners.

At the same time, we’ll continue to push for more transparency in evaluation. BEIS is now publishing all its commissioned reports, including comments by reviewers; we’d like to see other departments follow suit.

At the Centre, we’d also like to see wider use of Randomised Control Trials in evaluation. Often this will need to involve ’what works better’ settings where we test variations of a policy against each other — especially when the existing evidence doesn’t give strong priors. For example, Growth Hubs present an excellent opportunity to do this, at scale, across a large part of the country.

That kind of exercise is difficult for LEPs to organise on their own. So central government will still need to be the co-ordinator — despite devolution. Similarly, Whitehall has important brokering, convening and info-sharing roles, alongside the What Works Centres and others.

Incentives also need to change. We think LEPs should be rewarded not just for running successful programmes — but for running successful evaluations, whether or not they work.

Finally, we and other Centres need to keep pushing the importance of evidence, and to as wide a set of audiences as we can manage. Devolution, especially when new Mayors are involved, should enrich local democracy and the local public conversation. At the same time, the Brexit debate has shown widespread distrust of experts, and the ineffectiveness of much expert language and communication tools. The long term goal of the Centres — to embed evidence into decision-making — has certainly got harder. But the community of potential evidence users is getting bigger all the time.

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Twenty commandments

September 12, 2016

Not mine; Dani Rodrik’s. Ten for economists, ten for non-economists.

Take a look below. Read Diane’s very positive review, and this more critical one by Unlearning Economics.

Then buy the book.

 

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Ten commandments for economists

1/ Economics is a collection of models; cherish their diversity.

2/ It’s a model, not the model.

3/ Make your model simple enough to isolate specific causes and how theyr work, but not so simple that it leaves out key interactions among causes.

4/ Unrealistic assumptions are OK; unrealistic critical assumptions are not OK.

5/ The world is (almost) always second best.

6/ To map a model to the real world you need explicit empirical diagnostics, which is more craft than science.

7/ Do not confuse agreement among economists for certainty about how the world works.

8/ It’s OK to say ‘I don’t know’ when asked about the economy or policy.

9/ Efficiency is not everything.

10/ Substituting your values for the public’s is an abuse of your expertise.

Ten commandments for non-economists

1/ Economics is a collection of models with no predetermined conclusions; reject any arguments otherwise.

2/ Do not criticise an economist’s model because of its assumptions; ask how the results would change if certain problematic assumptions were more realistic.

3/ Analysis requires simplicity; beware of incoherence that passes itself off as complexity.

4/ Do not let maths scare you; economists use maths not because they’re smart, but because they’re not smart enough.

5/ When an economist makes a recommendation, ask what makes him/her sure the underlying model applies to the case at hand.

6/ When an economist uses the term ‘economic welfare’, ask what s/he means by it.

7/ Beware that an economist may speak differently in public than in the seminar room.

8/ Economists don’t (all) worship markets, but they know better how they work than you do.

9/ If you think all economists think alike, attend one of their seminars.

10/ If you think economists are especially rude to noneconomists, attend one of their seminars.

 

Microsolutions to megaproblems

December 9, 2015

I have a chapter in this nice new Policy Press book, After Urban Regeneration, expertly edited by Dave O’Brien and Peter Matthews.

Here’s the intro [pdf].

The book takes a critical look at urban policy in the UK, particularly in the post-crash period, and explores the way thinking  about regeneration has changed under austerity, and under localism.

It tests the idea that we’re now in a ‘post-regeneration’ era; it also takes a close look at the way communities and ideas of ‘community’ have been used to design, deliver and justify programmes on the ground.

My chapter covers the recent history of UK economic regeneration, sets out what we can expect programmes to achieve given the mega-trends shaping urban economies and communities, and also explores how the ‘what works’ agenda can help, both in developing the evidence base and in hands-on policy design. Cities and communities have been in tough times for years now, but I try to find some grounds for cautious optimism.

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The editors put together a strong and diverse team: we have excellent contributions from Stuart Wilks-Heeg, Antonia Layard, Kate Pahl, Liz Richardson and Chris Speed, as well as my Birmingham colleagues Catherine Durose and Phil Jones.

You can get the paperback here, or the hardback for a terrifying cost.

Estate renewal and neighbourhood regeneration

March 8, 2015

(c) Max Nathan 2012

At the end of January the What Works Centre on Local Economic Growth, where I’m a Deputy Director, released its review of estate renewal programmes. For many of those who’ve worked in regeneration policy, and (like me) want such programmes to succeed, the results were deeply disappointing.

The team found that

1/ Estate renewal programmes do a good job of improving housing, public space and physical amenities.

2/ Estate renewal programmes lead to increases in property and land prices and rents, although not necessarily for nearby properties that do not directly benefit from improvements.

3/ Programmes tend to have a limited impact on the local economy in terms of improving income or employment.

4/ Programmes tend to have a limited impact on the local area in terms of reducing crime, improving health, wellbeing or education.

Worse, we found no evaluations that were able to unpick effects on existing residents, as opposed to people moving into an area. This matters, because it means that – for example – area-level improvements in employment rates might simply be driven be people moving into the area, rather than real improvements in life chances for people already living there.

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A few thoughts on this.

First, as Ruth Lupton points out, we have to be careful to assess such programmes on what they set out to achieve. The main aim of estate renewal is usually to improve the quality of housing supply, the built environment and other local amenities. The review shows programmes are pretty good at achieving these. An important result.

Where such programmes score less well is on broader objectives. New Labour broadened estate renewal into a wider ‘neighbourhood renewal’ agenda – programmes like the New Deal for Communities included economic as well as social goals. The review included a number of independent and officially-commissioned NDC evaluations, and the results on these wider goals are not great. As John Haughton suggests, this is consistent with a larger body of evidence on ‘people’ vs ‘place’ interventions, and where views cut across the political spectrum.

It’s worth thinking a moment about why this might be. Urban economies are complex, and adjustment is hard to predict, sometimes chaotic. There’s clearly space for for neighbourhood regeneration programmes to try and deal with co-ordination problems, provide public goods, and try to mitigate some of the problems facing people in deprived areas.

On the other hand, these programmes are microsolutions for megaproblems: the economic elements of NDC are trying to roll back huge structural trends that two decades of national intervention under Labour more or less failed to shift. I’ve got a chapter coming out in this book, edited by Dave O’Brien and Peter Matthews, which talks more about these ‘regeneration expectations’.

Second, as John also says, it is important to understand in more detail *why* some estate renewal programmes have not delivered on their objectives. John suggests a few reasons: lack of community ownership, a lack of learning culture in the ‘estate renewal industry’, and shifting / conflicting central government priorities (a point also made by Ruth and others).

To dig into this, we need better quality impact evaluations (the What Works team used just 21 out of over 1,000 candidate studies). We also need to look through the complementary literature on programme process, implementation and management. The Centre has now started to do this – across a range of policy areas – and will be reporting back in the coming months.

Third, we need to set our expectations for such policies in the future. As a whole, regeneration programmes involve an implicit contract with communities, as Lee Pugalis and David McGuinness argue, and there remains a strong equity case for such initiatives. However, effective urban and neighbourhood policy is hard to design: neighbourhoods and cities are complex systems, which adjust in messy and uneven fashion. This creates space for policymakers – dealing with market and co-ordination failures – but also implies that impacts are likely to be incremental at best. That means presenting a realistic positive case for regeneration and estate renewal, rather than asserting economic transformations that stand little chance of coming about.

Spaces of Evidence seminar, 26 September

June 27, 2014

(c) richard serra / max nathan

I’m speaking at Goldsmiths in September, at one of the ESRC Spaces of Evidence seminars which will look at different types of economic evidence, their characteristics and limitations, and their uses in policy-making.

Will Davies, the organiser, has put together a nice lineup including Angus Deaton (Princeton), Suzy Moat (Warwick), Martin Giraudeau (LSE), Tiago Mata (UCL), Zsuzsanna Vargha (Leicester) and Vera Ehrenstein (Goldsmiths).

Here’s the blurb:

Economics and economists have a long history of providing a scientific basis or justification for public policy decisions. Concepts derived from welfare economics, such as ‘market failure’, have provided a language through which politicians and government officials can understand where and why the state might (and might not) intervene in market processes. The efficiency of potential regulation can be tested through the use of models, based on neo-classical assumptions.

However, events such as the financial crisis have thrown a renewed scepticism upon the capacity of orthodox economic theories to adequately model situations. At the same time, a new empiricism has emerged, which makes a bold appeal to data and field trials, which are purportedly less cluttered by normative assumptions about causality and probability. ‘Big Data’ and randomised controlled trials are at the forefront of new efforts to probe economic activity, in search of policies which ‘work’. The distinction between ‘model’ and ‘reality’ is abandoned, and the economy becomes treated as a zone of experimentation and data-mining, such that behavioural patterns can be discerned.

The seminar will explore the implications of these new directions in economic evidence, and ask what they mean for the authority of public policy, how they reconfigure expertise, and what types of epistemological and political assumptions they conceal.

It’s open to all, but you’ll need to register. Full details are here.

… and we’re live

October 25, 2013

our London launch

We had the London launch of the What Works Centre yesterday. It went very well – full room, sharp discussion, plus strong contributions from LSE’s Director Craig Calhoun, from BIS and DCLG Ministers Michael Fallon and Kris Hopkins and from Joanna Killian from Essex.

We’re off to Manchester in a couple of weeks for a second launch session. Details here.

Now the hard work begins

In the meantime you can catch up on what we’re up to here and here.

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