08 November 2014

Measureable versus immeasurable goals

Theodore Dalrymple writes:
[W]e suffer nowadays from an unease in talking about what cannot be easily measured, such as life expectancy. If I say something that would once have seemed perfectly obvious, such as that loneliness is undesirable, someone will demand the evidence. Life expectancy can be measured; and we are inclined to believe that what can easily be measured must be more important than what cannot. The result is a lot of pseudo-thought. ‘Hell is other people?’, Theodore Dalrymple, 'Salisbury Review', 20 October
In our large, complex societies, government bodies have enlarged their role and largely supplanted families, extended families, and communities in supplying a range of welfare services to a large proportion of their populations. Increasingly, and of necessity, government relies numerical indicators to manage its resource allocation.

But this use of indicators is relatively recent, unsystematic and unsophisticated. Few indicators are targeted explicitly for a sustained period: the targeted range of inflation is a rare exception, as is the coherent range of indicators presented in the UK Government’s attempt to tackle poverty.  Other indicators, such as the length of hospital waiting lists, don’t measure what matters to people or are prone to manipulation. Even when numerical goals are clear and meaningful they are rarely costed, they are almost always too narrow, and they are largely chosen to mesh in with the goals and capabilities of existing institutional structures. Those broad targets that are targeted with some degree of consistency tend to be economic aggregates, such as the inflation rate, or the rate of growth of Gross Domestic Product — which appears to be de facto indicator par excellence of rich and poor countries alike. But GDP’s shortcomings as a single indicator of the health of an economy are well known.

What would a Social Policy Bond regime, though, say about those things that cannot readily be measured, like loneliness? In the absence of objective, reliable indicators of mental well-being perhaps the best approach would be for government to step back and target only those quantifiable indicators or goals that are inextricably linked to those sorts of well-being that we can measure. But that would not be enough: some government activities aimed at, to take our current discussion, lengthening life expectancy could well increase loneliness. Think, for instance, of government support for roads, which may well have the effect of both lengthening life expectancy and increasing loneliness.

Facing this dilemma, I have a response, rather than an answer. A Social Policy Bond would set policy targets by consensus. People understand outcomes more than the means of achieving them, and so could and would participate in the policymaking process, including the setting and relative priority of social goals. There would be more buy-in to policy, which itself might go some way toward relieving the negative impacts of certain decisions. There's no perfect solution, but a bond regime, because of this additional opportunity for public participation that it offers, and because it forces clarity over exactly what we want to achieve as a society, could help to resolve conflicts between measurable and immeasurable goals.

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