Data Equals Dollars

Can Government Play Moneyball?

Data Equals DollarsA recent essay in the Atlantic – Can Government Play Moneyball? – underscored the importance of data and outcomes for government programs.

The authors are former officials in the administrations of Barack Obama (Peter Orszag) and George W. Bush (John Bridgeland). They state that they we were flabbergasted by how blindly the federal government spends.

They state:

In other types of American enterprise, spending decisions are usually quite sophisticated, and are rapidly becoming more so: baseball’s transformation into “moneyball” is one example. But the federal government—where spending decisions are largely based on good intentions, inertia, hunches, partisan politics, and personal relationships—has missed this wave.

On performance they state:

With so little performance data, it’s impossible to say how many of the programs were effective. But you don’t have to be a Tea Party organizer to harbor skepticism. Since 1990, the federal government has put 11 large social programs, collectively costing taxpayers more than $10 billion a year, through randomized controlled trials, the gold standard of evaluation. Ten out of the 11—including Upward Bound and Job Corps—showed “weak or no positive effects” on their participants. This is not to say that all 10 programs deserve to be eliminated. But at a minimum, collecting rigorous evidence could help spur programs to improve over time.

They highlight efforts to focus on evidence-based decision making:

A nonprofit organization that advocates for evidence-based decision making, called Results for America, has proposed a number of measures that would expand on these efforts. It is calling for reserving 1 percent of program spending for evaluation: for every $99 we spend on a program to improve education, reduce crime, or bolster health, we would spend $1 making sure the program actually works.

The Harvard economist Jeffrey Liebman has written that, based on his simple but convincing calculations, “spending a few hundred million dollars more a year on evaluations could save tens of billions of dollars by teaching us which programs work and generating lessons to improve programs that don’t.” Who wouldn’t want a 100-fold return on investment?

As CoC’s transition to HEARTH, this essay underscores the importance of data and outcomes. More than ever data and outcomes will equal dollars.

Click here to read the full essay.