13 February 2019

Humanity versus vested interests

A correspondent asks me why the Social Policy Bond concept hasn't yet been implemented. A good question, especially as the non-tradeable version (Social Impact Bonds, also known as Pay for Success Bonds, etc) is becoming more widely deployed and much discussed. So...why not Social Policy Bonds?

I suspect part of the answer is that Social Policy Bonds are a threat to existing institutions: politicians, because they would have to relinquish their control over who shall achieve social goals and how they shall be achieved; and government agencies, such as education, police, health departments, because investors in the bonds would subordinate all their funding decisions to efficiency and, in many cases, new organisations and new techniques will be more efficient than existing bodies with their entrenched ways of doing things and fairly limited remits. Just one example: the best way of reducing crime rates in a disadvantaged area might be to subsidise employment there, rather than increase funding for the local police force. Or a cost-effective way of reducing the numbers of people killed or injured in car accidents might be to lay on free mini-cabs or taxis or have teams of dedicated, paid drivers whose sole job would be to ferry people from pubs, bars, nightclubs, home at night. That might be really cost effective but, under our current system, there's nobody to speak up for such a policy, and it would be opposed by vested interests. More dramatically: nobody really want to live under threat of nuclear war, but currently there are no bodies with sufficient influence and motivation to ensure that won't happen. Sure, there are teams of dedicated people in international bodies striving valiantly to reduce conflict but, the resources, including brainpower, just aren't there. Big money has less interest in avoiding nuclear catastrophe than it does in devising imaginative ways of selling dog-food. And why not? It's reacting rationally to the incentives on offer - which (I think) are perverse in that they prioritise the narrow short-term interests of a few corporations (and, arguably, a few dogs) over the survival of millions of human beings.

Another reason for the absence of Social Policy Bonds from the scene could be the hysterical nature of today's politics, where shrieking abuse at the opposition has supplanted making policy to improve society's well-being as the prime activity. So solving social problems is seen as a 'left-wing' goal, and using markets is seen as 'right-wing'. In more enlightened times, you'd think a policy that uses markets to improve social well-being would unite both left and right; but that's not happening. So while I'm partly encouraged by the slow spread of Social Impact Bonds, I'm also concerned that - especially if they become so common as to escape public scrutiny - they will end up serving vested interests at the expense of society as a whole.

For more about Social Policy Bonds see my home page. For my concerns about SIBs see here and here, as well as some previous blog posts.

05 February 2019

Perceptions and reality: no easy answers

A retired MD writes to the American journal Consumer Reports:
AS A RETIRED M.D. (30 years in emergency medicine), I agreed with most of your article about too many tests. However, you forgot to point out one of the big reasons for overtesting: hospital, clinic, and provider “scorecards.” Medicare providers are still being ranked by “patient satisfaction,” which is often driven by whether patients get all the tests they want— even after you explain why they aren’t necessary. Doing an X-ray on every sprained ankle is a classic example in emergency medicine. —Emma K Ledbetter, MD, 'Consumer Reports', March
There's s a genuine problem for policymakers: should we target for improvement only those goals that can be objectively measured, or should we also aim to improve something far more subjective: people's happiness or satisfaction? Ideally there wouldn't be a conflict, but in matters of health there is often a discrepancy between what's actually happening, and what people think or fear is happening. Crime too:
One would imagine that if crime was high, fear of crime would be as well, and alternatively, if crime was low, fear of crime would follow this pattern. What has been found over the years, however, is that crime and fear of crime rarely match up. Fear of crime, Nicole Rader, Oxford Research Encyclopedia, March 2017
In both health and crime, perception and reality aren't easily disentangled. In health, we all know about the placebo effect,whereby an objectively useless pill or procedure does actually improve a patient's condition and his or her perception of that condition. Crime rates might be low, but perceived crime high for a valid reason: people are afraid of, for instance, venturing onto the streets after dark. To add to the confusion: people's perceptions are difficult to measure accurately.

How to deal with perceptions when they might conflict with reality is crucial when trying to formulate policy for anything other than a very small number of people. Take, for example, the question of whether we should incorporate perceptions of crime into an overall crime index that we target for reduction? I'm minded to say no because perceptions can easily be gamed at the expense of objective reality. In today's political climate, it's all too easy to imagine an interested body to work on perceptions - via a massive advertising campaign, perhaps - and doing nothing to reduce crime rates. Similarly with health: we could weight the physically verifiable results of testing, or a placebo, say, more highly than their psychological impacts. (The latter could perhaps be given zero weight, as over-testing and other unnecessary procedures can have negative physiological impacts.) In general, then, perhaps the best approach is to target objectively verifiable indicators and hope that perceptions begin to match them more closely. When it comes to something like our crime example, where people are afraid to walk in the streets because of the fear of being mugged then we'd need to be more creative in coming up with objective targets in addition to goals such as 'reduced number of assaults'.

No easy answers then, to this question that's relevant not only to a Social Policy Bond regime, which relies on targeting explicit, verifiable and meaningful goals, but to any body implementing social policy that uses aggregated data to help formulate policy.

28 January 2019

Hyper-manicured public spaces

Colin Tosh, lecturer in ecology, writes about hyper-manicured public spaces in the UK. He gives examples:
The wildlife value of a particular tree species in cities is often disregarded when a decision is made to remove it. In parks, plant species which are exotic to the UK such as the New Zealand cabbage tree (Cordyline australis) are intentionally planted because no native wildlife can use them, so they are low maintenance. ...

Leaves are swept up immediately before their nutrients can return to the ground and the insects that lay their eggs on them are doomed to certain death. Road verges are cut back to the bone several times each year and the clippings are left lying, minimising their use as a habitat for wild flowers. How hyper-manicured public spaces hurt urban wildlife, Colin Tosh, 'The Conversation', 22 January
Part of the reason is that the wishes of local people conflict with those of the bodies charged with maintaining these spaces:
It doesn’t help that grounds management is often subcontracted to private firms in the UK. In these cases, grounds management is more likely to be insensitive to expert advice as the function is out of the hands of the democratically controlled body and with a private company that needn’t care what the public thinks.
We see this all the time: corporate bodies have goals that conflict with those of ordinary people. Often their goals are short term and narrow. Qualities important to the public fall through the cracks: in this instance, the local environment; more generally the global environment, social cohesion and other things that make up the Commons.

Social Policy Bonds could work quite well in targeting broad, long-term goals, such as the dealing with climate change or its impacts. For local goals, such as the well-being of public spaces, the remedy would appear to be, as indicated by Mr Tosh, ensuring that the bodies responsible are accountable to the people directly affected. Both approaches entail taking ordinary people's long-term goals seriously, and giving a lower priority to the short-term goals of corporate bodies, including government agencies.

Interestingly, even on their own terms, efforts made to satisfy the short-term accountancy-type goals local authorities, fail:
The irony of it all is that measures to improve public areas for wildlife essentially involve less effort overall. All that really needs to be done is to allow public areas to be a little more unkempt, because unkempt areas are what nature likes.
 Again, there is a larger-scale parallel: 
If shareholder primacy theory is correct [ie, that the over-arching goal of corporate managers is to maximise shareholder value] corporations that adopt such strategies should do better and produce higher investor returns than corporations that don’t. Does the evidence confirm this? Surprisingly, the answer to this question is “no.” The Shareholder Value Myth, Lynne A Stout, 'European Financial Review', 30 April 2013
And the reasons are similar and include: the differing goals of the many stakeholders, not all of which are readily quantifiable; and, very often, conflict between long- and short-term objectives. Corporations, of course, are supposed to be in competition with each other, so should be penalised if they fail to meet consumer demand. But, as Jonathan Tepper tells us, competition is now an every more rare feature of today's mixed economy. A Social Policy Bond approach might be the answer, whereby investors form a new sort of organisation and enrich themselves if and only if they help achieve the long-term goals of society as a whole.

17 January 2019

Channelling viciousness

From a letter to the editor of today's Financial Times:
Bernard Mandeville, the 18th century Dutchman who left Rotterdam to live in England, was not only an early modern crossover representative, he also understood the psychological roots of humankind. In his Fable of the Bees he asserts that rationality is not necessarily virtuous. In fact, individuals acting viciously can bring about positive aggregate results such as higher investment, employment and economic growth. Dr Jacob Borheim, Financial Times, 17 January 2019
For sure, the accidental effects of human actions can be beneficial as well as disastrous. Adam Smith's Invisible Hand apodictically generates material wealth. But pursuit of our individual goals can and does create serious social and environmental problems too. A benign, quick-acting, and impartial government can regulate away the worst excesses arising from our pursuit of happiness. But governments aren't quick acting, and rarely are they benign and impartial. In fact, society is now so complex that even such an ideal government couldn't react quickly enough to the negative impacts of economic growth. As well, the world is too small now for the solution of social and environmental problems to be left to chance: with a human population of more than 7 billion, and difficult-to-identify feedback loops and time lags, no single body can anticipate or successfully regulate the world economy's adverse impacts. Yes, 'positive aggregate results' can result from individuals acting in our own interest. They might even be net positive results. But (1) that still implies a lot of negative results and (2) we'd do better to minimise negative results before they occur. 

This is what Social Policy Bonds could do. One of the great advantages of the bond approach is that we can encourage people to achieve social goals without anyone knowing in advance how they will do so. A subset of such goals would be the targeting for reduction of the negative impacts of economic growth however they arise. Investors in the bonds would then have incentives to scrutinise current and proposed private- or public- sector projects with a view to minimising their negative impacts. Taking a broad, long-term, global approach, we could, for example, aim to reduce disasters of any sort, without having to specify how or where they occur.
Under a Social Policy Bond regime, then, people would still be acting rationally and even viciously, but we'd be channelling such behaviour into the pursuit of society's well being. In short: giving greed a chance

08 January 2019

Climate change, war and celibacy

Why do wars happen? Why do crime rates go up and down? The answers to these and other complex social and environmental questions are many and varied. What about climate change? It appears that it is most probably caused by mankind's greenhouse gas emissions. But not definitely - and that uncertainty partly explains why, despite all the conferences, treaties, entreaties, agreements and commitments, our greenhouse gas emissions are at record levels.

I think we face these challenges using outdated thinking. For historical reasons, policymaking is almost entirely a top-down activity. Politicians and public servants see a problem, try to identify its causes, then decide what needs to be done about them. If they aren't certain what needs to be done, either they guess at the causes or ignore the problem. 'Ignoring' takes the usual costly bureaucratic forms: setting up bodies, forming committees, holding meetings, and generating worthy but useless reports and agreements.

The problem is that no single body can identify the causes of such problems as war or crime or even climate change, and then work on them in the ways that used to work on more obvious social and environmental problems. Our biggest and most urgent problems are too diverse, and their causes change to rapidly, for the old ways of making policy to address them adequately.

The question then becomes: do we need to identify a problem's root causes before we try to solve it?

John Michael Greer asks why celibacy fosters the long-term survival of monastic systems:
Perhaps celibacy works because it prevents sexual jealousies from spinning out of control, as they so often do in the hothouse environment of communal living. Perhaps celibacy works because pair bonds between lovers are the most potent source of the private loyalties that so often distract members of communal groups from their loyalty to the project as a whole. Perhaps celibacy works because all that creative energy has to go somewhere — the Shakers birthed an astonishing range of artistic and creative endeavors.... Perhaps it’s some other reason entirely. The point that needs to be kept in mind, though, is that in a monastic setting, celibacy works, and many other ways of managing human sexuality in that setting pretty reliably don’t. The question “does x happen?” is logically distinct from the question “why does x happen?” It’s possible to be utterly correct about the fact that something is the case while being just as utterly clueless about the reasons why it is the case. (My italics.) After Progress, John Michael Greer, 2015
So, do we really need to identify the causes of climate change or war or crime, before we try to eliminate them? I don't think we do (and, incidentally, I don't think we can, definitively).

I suggest that instead of opting, in effect, for inaction by sending people off on a fruitless, never-ending search for 'root causes', we take steps to reward the solution of these complex problems, and let a motivated coalition work out the most efficient ways of solving them, whether or not such ways have anything to do with root causes.

Social Policy Bonds are a way in which we can do this. The bonds would target outcomes, rather than the alleged means of achieving them. Instead of targeting climate change, they would target for reduction the negative impacts of adverse climate events on human, animal and plant life. Instead of trying (or pretending to try) to prevent conflict in Africa or the Middle East, a Social Policy Bond regime would target for reduction the numbers of people killed and made homeless in those regions and reward whoever achieves and sustains such reductions. Complex social and environmental problems require diverse, adaptive approaches for their solution. They don't require that we identify their real or mythical 'root causes' before doing anything. By contracting out the achievement of solutions to a motivated coalition of holders of Social Policy Bonds, we could avoid endless searches for nebulous root causes and instead devote our energies to finding solutions to the problems they create.

For more about my approach to climate change see other posts on this blog, or this essay. For more about my approach to achieving peace, follow this link.

01 January 2019

Social Policy Bonds: the outlook for 2019

After about thirty years in the public arena, how is the Social Policy Bond concept faring? Not that wondrously, to be frank. As far as I'm aware, no Social Policy Bonds as I conceived them have ever been issued. The Financial Times, though, does tell us that more than 100 Social Impact Bonds have been launched across 24 countries, raising $400m. SIBs are a 'lite' version of Social Policy Bonds. The main difference between them and Social Policy Bonds is that they are not tradeable which, in my view, greatly diminishes their scope and opens them up to favouritism, gaming and manipulation. I've had no involvement with SIBs and have written before in this blog (here, for instance), and more definitively here and here, about why I am ambivalent about them.

Nevertheless, via SIBs, the idea of rewarding better performance is making tiny inroads into the public sector; that is, into the achievement of social goals. This feature, so long a feature of the private sector, is now being deployed to help solve social problems, though in very limited circumstances. I'd be more optimistic if this small change were being used to do something other than favour existing bodies in pursuit of narrow goals, but I suppose we should be grateful that there are some steps, however tentative, in the right direction.

Frankly, I don't see much else to be positive about where policymaking is concerned. There's little in the way of constructive dialogue, and much in the way of Manichaean name-calling. Take immigration: it's at least arguable that immigration reduces wages and raises housing costs. It has benefits of courrse, also, but too often people trying to discuss the downsides are dismissed as xenophobes or worse. There's a genuine question too, over whether national governments should put the interests of their own citizens over those of would-be immigrants. But these questions can hardly be raised, such are our rancorous politics. The broader problem is that the determinants of the policies we make are determined primarily by ideology, emotion, personality, televisual footage, and sound-bites.

Anything except outcomes, in short. And that gives me grounds for tentative optimism. Our current ways will self destruct. They are unsustainable. Out of the rubble, it's possible - just - that we shall target and reward the achievement of social and environmental outcomes. I mean long-term outcomes that are meaningful to ordinary people, rather than the narrow short-term goals that characterise corporations, financial traders, billionaires and, these days, politicians. Such a trend is unlikely to begin in the year 2019, but it's possible. If it were to occur, then we might also give priority to achieving our goals cost-effectively. At that point Social Policy Bonds, in their full tradeability, could step onto the stage and at last begin to play their role.

26 December 2018

Climate change: surrogate surrogate indicators

I've blogged before about surrogate indicators, or surrogate markers: 
A surrogate marker is an event or a laboratory value that researchers hope can serve as a reliable substitute for an actual disease. A common example of this is blood cholesterol levels. Evidence-based medicine in disguise: beware the surrogate, 'MD Whistleblower' (blog by Michael Kirsch), 1 August 2010
And, more broadly, in economic policy:
Instead of targeting anything as meaningful as human well-being, the de facto target of most governments is gross domestic product (or GDP per capita). 26 July 2015
But there are also surrogate surrogate indicators. In climate change, we have agreements primarily aimed at limiting emissions of greenhouse gases:
Framework Convention on Climate Change (UNFCCC), New York, 1992, including the Kyoto Protocol, 1997, and the Paris Agreement, 2015
I submit that these agreements are surrogate surrogate indicators: they are not targeting climate change; they are not even targeting the many hundreds of hard-working people who strive to achieve consensus over these agreements understandably measure success by the number of signatories to their final agreement texts.They are not, though targeting climate change. And, even assuming that greenhouse gases, as identified by current science, are responsible for climate change, the politicians and bureaucrats who, through considerable effort, get an agreement signed, have done nothing to see that even their surrogate indicator, reductions in greenhouse gas emissions, take place. Michael Le Page tells us where we are at today:
Early in the new year, if not sooner, the world will set a most unwelcome record. Global oil consumption will pass 100 million barrels per day for the first time – and keep climbing. To have any chance of limiting warming to 1.5°C, greenhouse gas emissions need to start falling now, and fast, the latest UN climate report warned in October. But emissions are still increasing. They rose 3 per cent in 2018 and look set to keep rising in 2019. Renewable energy race to ramp up as oil use skyrockets, Michael Le Page, New Scientist, 18 December (my emphasis)
And the climate itself?

Last four years are 'world's hottest'

There's a genuine problem here, despite the good intentions of the characters involved, be they scientists, politicians or bureaucrats. We have little chance of avoiding the climate disruption about which we are being warned while we are committed to the usual way in which policy is made. I don't think it's enough, when faced with a hugely complex and urgent problem, to use the science of 20 years ago as a base for a one-size-fits-all, top-down approach to its solution. We are undertaking multitudes of smaller initiatives to, for example, limit emissions and create carbon sinks. But our intense focus on greenhouse gas emissions is doing nothing to stop outrages like the destruction of the Brazilian rainforest:
Between August 2017 and July 2018, 7,900sq kms were deforested, according to preliminary figures from the environment ministry based on satellite monitoring – a 13.7% rise on the previous year and the biggest area of forest cleared since 2008. Brazil records worst annual deforestation for a decade, Dom Phillips, The Guardian, 24 November
While the goal of limiting the rise in the Earth's temperature to 1.5 degrees C is sound, there are no reasonably upfront financial incentives for people actually to achieve it. There are some, as we have seen, ineffective agreements to try to limit greenhouse gas emissions, or fossil fuel exploitation and consumption. But people react to the incentives on offer, and there are no explicit rewards to anyone contingent on the climate stabilising for a sustained period. We can take expert advice about what sort of 'stabilising' we want to see, but the important thing is that we set in place a meaningful climate stability goal and reward people for achieving it. We are not doing that right now, with the disastrous consequences that we are already seeing and more, many more, to come.

Which is why I suggest adapting the Social Policy Bond idea to deal with climate change. The essentials of Climate Stability Bonds are (1) that they reward the achievement and sustaining of a more stable climate (however defined), and (2) they will encourage the use of market forces to allocate society's scarce resources to meet our goal most efficiently. I have written more about Climate Stability Bonds here, on which page there are links to a range of my other writings on the subject.

17 December 2018

Why I go on and on about nappies

Why do I keep blogging about nappies? Because decrying the use of disposables rather than cloth (or vice versa), does not make for sensible policy. As such, the seemingly simple question of disposable versus cloth embodies in microcosm the inescapable difficulty of making policy about bigger concerns. There are always angles that we cannot foresee. Cleo Mussi, for instance, writes to the New Scientist:
.... I wonder whether the research comparing [cloth] to disposables took into account the fact that babies using cloth nappies tend to be toilet-trained day and night at a much earlier age – there is little more uncomfortable than a wet cloth nappy. A difference of six months to a year would lead to a child using 1100 to 2200 extra disposable diapers or nappies – a lot of extra landfill. Cleo Mussi, Letter to the editor of 'New Scientist', 12 December
Our environment and society are too complex and changing too rapidly for us to favour even one of two types of nappy. Our knowledge of existing and new scientific relationships is also rapidly expanding. Yet the way we make policy makes little allowance for such difficulties. Typically, a government (heavily influenced by corporate interests or ideological baggage) makes a top-down, one-size-fits-all decision, ostensibly based on fossilised science, and then moves onto something else, rarely revisiting or even monitoring (pdf) its performance.

When bigger challenges than nappies loom, this way of doing things generates commensurately bigger problems. Whether it's climate change or health or global conflict, neither government nor any single conventional organisation can know all about the relevant human and scientific relationships, let alone keep up with them. Nor can they anticipate the diverse effects their policies will have over both time and space. The complexities are too great, and any single body is going to be too pre-occupied with its image, the latest events, or its members' individual goals to care much about outcomes.

Yes, outcomes. Even obscure wrinkles, of the sort about which Mussi tells us, can have big, unforeseeable impacts. Only people who are continuously motivated to achieve our goals, to look at the effects of their initiatives, and to adjust their ideas accordingly, can develop the diverse, adaptive approaches that we need to solve our social and environmental problems. Social Policy Bonds are one way in which we could stimulate such initiatives. They have other benefits: most significant here is that issuers of the bonds do not need to specify how a problem is to be solved in order to get people started on solving it. Our goals are stable: the optimal ways of achieving them, especially when complicated by time lags, feedback loops, a multitude of known, unknown and unknowable variables, are not. We can and, in my view, should, issue Social Policy Bonds targeting such goals as dealing huge, urgent problems such as climate change or global conflict even though the ways in which they are to be solved are beyond - well beyond - the purview of our current policymakers and their paymasters.

15 December 2018

Health: begin with our goal

Jerry Muller writes:
If ...doctors are remunerated based on the procedures they perform, that creates an incentive for them to perform too many procedures that have high costs but produce low benefits. But pay doctors based on the number of patients they see, and they have an incentive to see as many patients as possible, and to skimp on procedures that are time-consuming but potentially useful. Compensate them based on successful patient outcomes, and they are more likely to cream, avoiding the most problematic patients. Jerry Z Muller, The Tyranny of Metrics, February 2018
It's perfectly understandable. People react rationally to the incentives on offer. For reasons that might be politically incorrect to suggest, we live in societies where the incentives are increasingly extrinsic - mainly financial - rather than intrinsic, which has to do with the satisfaction of doing a job well. It's a trend, rather than an absolute, but it leads to perverse incentives in many, perhaps most, professions including, as Mr Muller tells us, medicine.

What's to be done? How should healthcare professionals be paid? Leaving it to the market, as some might propose, is not a workable solution. One reason - there are others - is that the information asymmetry is too great. So: let's start with our goal: we want to see improvements in the long-term health of a country's population, and we want such improvements to be made as cost-effectively as possible.

My suggestion is that we apply the Social Policy Bond idea to health. This could be done at a national level. A government would issue Health Bonds that would become redeemable for a large sum once national health levels reach a targeted level, sustained for a period of years or decades. 'Health' would be measured by objective criteria, such as longevity, Quality Adjusted Life Years, infant mortality rates etc. Each of these measures would have to fall into a targeted range before the bonds could be redeemed. Investors would buy the bonds and in doing so find themselves members of a protean coalition all with the same goal: to bring about improvements in the country's health. Having done their bit and (hopefully) having seen the value of their bonds rise, they'd sell their bonds to people willing to bring about further health improvements.

Bondholders' goals would therefore be exactly congruent with those of society: to improve the nation's health with maximum efficiency. Note that, while bondholders might hold the bonds only for short periods, the bonds could be in issue, depending on their redemption terms, for decades. Unlike current policy, they'd be long term in nature.

There are other advantages, one of which is that the government (or other issuing body) would not dictate how our health goals shall be achieved, nor who shall do so. Doctors and hospitals would certainly have some involvement. But bondholders, being motivated to find the most efficient pathways, might find that, for instance, subsidising youth clubs in certain areas, or providing cheap taxi services in others, or giving out free e-cigarettes, or paying doctors differently, would be the least costly ways of seeing results. The possibilities are endless and no government, nor any conventional organisation, can be relied on to investigate, experiment and implement the innovative, diverse, adaptive long-term solutions that will help achieve our goal. Health Bonds would see the creation of a new type of organisation: one whose composition, structure and activities are entirely subordinate to society's goal: improving the nation's health as efficiently as possible.

03 December 2018

It's not just nappies

Nappies, cloth or disposable, just won't go away. I've blogged about nappies before (here and here). A recent article in New Scientist revisits the issue, citing an updated report done in 2008:

...if cloth nappies were washed in full loads, air-dried on a washing line and reused on a second child, they resulted in 40 per cent lower greenhouse gas emissions than using plastic disposable ones. These benefits are likely to be even greater today [ie 2018] now that half the UK's electricity comes from low-carbon sources. Are disposable nappies really so terrible for the environment?, Alice Klein, 'New Scientist', 21 November
The question posed by the article raises a general question here as to policymakers go about legislating or regulating in order to solve social and environmental problems. Most of these problems are complex: they have multiple causes whose significance changes radically over space and time. Our current policymaking system usually looks at a problem, or a symptom of a problem, tries to identify a cause, then goes about trying to legislate or regulate that cause so as to moderate its adverse effects. That works well when the relationship between cause and effect is easy to identify. But such is rarely the case today, as the nappies example shows.

It's not just nappies. Climate change is the same: we cannot rely on government to identify the causes of a complex problem, then do the right thing and, eventually, regulate it. There is too much scope for mis-steps along the way. The causes might be many and varied, with time lags and linkages impossible to verify. Legislating is nowadays a cumbersome and arcane process, and is often opposed or delayed by powerful interests that stand to lose if it goes forward. Results of policies are rarely monitored; still less are policies modified in the light of their impacts.

These flaws are inevitable in the way we make policy today. Fortunately, I believe there's an alternative. We need to focus on outcomes, and let the ways in which these outcomes be achieved be decided, on a continuous basis, by people rewarded only for achieving them. So: rather than government trying to deal with the problem of (say) landfill by commissioning a one-time study of the comparative benefits of cloth versus disposable nappies using fossilised data, it would instead target for reduction the volume of landfill. Rather than try to work out why there are more adverse climatic events, government should reward reductions in the number and severity of such events. And rather than try to work out some alleged 'root causes' of violent political conflict, we could instead reward the sustained absence of such conflict, whoever achieves it and however they do so.

Not only would this be intuitively more efficient than current the policymaking process, it would also be much quicker. It's taken decades to get to where we are now with regard to the causes of climate change and...adverse climatic impacts are worsening. And we haven't even begun to identify root causes of war. We don't even know if there are any....

What I'm advocating is, of course, the Social Policy Bond idea, whereby we issue bonds that become redeemable only when a targeted social or environmental goal has been achieved. Investors in the bonds would themselves work out the best ways of achieving these goals, and they would be motivated to do so efficiently and continuously. It's a simple idea, but the ramifications are many and varied, and I've written about some of them in this blog and on the Social Policy Bonds website. As I say: it's not just nappies. The traditional way of doing things just isn't working any more. It's time to focus on outcomes.