DETA Research Forum20 June 2008

Evidence Based Policy: the challenges, hopes and

possibilities

Peter Crossman

Government Statistician

Queensland Treasury

Framework

• Advance the evidence base

Policy generative researchEconomic, social and population

modellingResearch and policy capacity building Information dissemination

Economic growth• Critical for economic and social progress and

security• Drivers of growth in per capita state income are:

Labour productivity Labour utilisation, including

Employment, less unemploymentParticipation, more activity Intensity, work longer

Terms of trade

• Economic growth accounting decomposition

Chart 1.2 Decomposition of growth in GSI per head, 1993-94 to 2005-06

3.1

0.5

2.7

2.0

0.60.5 0.4

-0.3

-1.0

0.0

1.0

2.0

3.0

4.0

Real GSI perhead

Terms of trade Real GDP perhead

LabourProductivity

LabourUtilisation

Employment Participation Intensity

Labour UtilisationGSP per headGSI per head

Source: ABS (Australian State and National Accounts and Labour Force), and OESR estimates

What is productivity?• Labour productivity is output per unit of

labour input• Growth in labour productivity has two

sources: Multifactor productivity (MFP) i.e. working

smarter, more innovatively, doing things differently and better; and

Capital deepening i.e. improving the use of capital by workers e.g. using new machines, or using machines better.

• Problem is – productivity is a treadmill

Innovation• A process of continuous change• Innovation is the essence of productivity – in

a sense, it is the same thing• An essential pre-condition to “good” change

is information• Evidence based policy and decision making

– in government, households and business• Keynes “ When I get new information, I

change my mind. What do you do?”

Statistics• An important “type” of information• The “market’ for statistics – supply and

demand• Gaps – how would one know?• Priorities – wants, aka demand.• But what about supply? Issues include:

Collection costs – direct and indirect By-products – administrative, ICT systems Inertia and lags in recognition, reaction Confusion and lack of “connection”

Administrative statistics• This is what we already have, and it is

growing: Imperfect understanding of what there is

out thereCustodians know, sometimes in isolationMany potential users do not know and

cannot know Imperfect incentives to inform and

changeMany restrictions – some genuine, others

unnecessary

More on administrative statistics• There can be no innovation when

there are no incentives to change and too many rigidities binding change

• Solution?• Provide:

incentives

• Remove: restrictions

More on administrative statistics• Provide incentives?

Use and value of data is the primary incentive

Recognition of this is rapidly increasingPerformance measurement – both

strategic and tactical Indigenous reform – information critical to

successCOAG – new SPP arrangements depend

on performance measures against targets

More on administrative statistics• Remove restrictions?

Provide legal protection (see licensing below)

Clarify ownership, and roles and responsibilities (the Crown owns it all – agencies are custodial, accountable and statutory officers are ultimately responsible, and professional officers are data custodians, who administer and mange the data for the accountable and statutory officers)

Add transparency (see below)

A note on restrictions• Some restrictions are valid – these

should obviously not be over-turned• This includes privacy protection.

People and businesses are entitled to privacy, and there are good societal reasons for enforcing privacy protection.

• There are some other good reasons for restricting data access, but not many.

More on administrative statistics• We should make information about

administrative datasets clear to all potential users

• Custodians cannot know of potential uses by users – let the users know that administrative data exist, what its quality is like, and what the access arrangements are

• Before we collect statistics directly, we should see what is already collected, what is already there

Transparency• Seeing what is there is the concept of

transparencyMinimises costs e.g. searchCreates pressure for improvements in

quality and quantity (“if we added an identifier for Indigenous status, this would enable population data to be used for… and would prevent the need for, say, another costly, difficult and intrusive survey…”)

Maximises potential use from innovation

In practice, what can be done?• Need practical actions• Simple, cheap, good returns, early

runs on the board, low hanging fruit, take the points

• Three practical things to do:Metadata registries;Licensing; andDo not do daft things e.g. lock up all data,

commoditise all data, or centralise data.

Metadata registries• Example is the Register of Strategic Information in

OESR: has small proportion of population centralised not a good example of what needs to happen

• What needs to happen? All data need to be managed with metadata by

data custodians The metadata should be registered in only one

place viz the agency registry Agency registries must be searchable by the

world (remember, metadata ≠ data) All metadata must be transparent

More on metadata registries• Best generic example• Library catalogues – where there

are lots of libraries, in different physical and logical locations, of various types of content, each with a searchable comprehensive catalogue, maintained using professional standards, with the books behind the doors in the stacks.

More on metadata registries• Keep it simple, especially in technology, let statistical

professionals (the data custodians) organise it• Do NOT centralise metadata (like RoSI) or data (this

is risky, costly and unnecessary)• Make it a core responsibility of custodians and

accountable officers• Stick metadata on the agency website (WCMS) and

make it searchable by a web search engine (e.g. Google Statistics)

• Keeps risks allocated properly, costs down, and minimises errors (e.g. the dangerous practice of there being multiple (sometimes illegal, often out-of-date) copies of some strategic datasets – we need a single clear point of truth)

Licensing• Metadata registries must contain metadata,

but not necessarily data• Metadata should clarify access conditions• Data are often currently restricted because

many custodians do not have simple, legally valid access to licensing advice or means

• Creative commons helps in the great majority of cases – solves this problem

• Some data will require more detailed licensing

More on licensing• Queensland approach includes GILF

(Government Information Licensing Framework)

• Went to Cabinet as an information paper this year

• Information on GILF on OESR and QSIC websites

• Attracting significant interest in other jurisdictions

• Based on creative commons – about 85 per cent of government information can use basic CC licenses

• Provides legal certainty

Back to productivity• Clearing the public sector’s information

“market” will help MFP, through better information allowing smarter decisions and policy

• What about capital deepening? This is important too Workers need more and better capital They need skilling to operate this capital as well

as access to it Information is capital

Information is capital• We readily understand physical capital

– roads, buildings, computers, staplers• We pay a lot of lip service to intangible

capital• This includes information or, in my

world, statistics• Need to go beyond glib phrases and

make it happen i.e. properly value information content, and manage it like an asset

But it is not ICT• ICT hardware is commonly

understood to be capital – as a “machine” it is understood to add value to a worker

• Even software is getting there• But information content is still largely

forgotten in the stock of assets• Proof? We are here today discussing

what needs to be done

Help the workers• Give the workers – researchers, policy

analysts and makers, decision makers – the tools for the job

• This includes the actual information content they require for business decisions and for evidence based policy – this includes information which is already held by the public sector

• Innovative (but secure) data matching and integration will be enabled and will deliver even more capital

• Note that workers in their role as consumers also could use this information

What can we do?• Reduce search costs• Increase volumes – the range of

possible uses is unpredictable as it is in the hands of innovators (and we do expect innovation) so expose all metadata

• Reduce risks for respondents, users, custodians and accountable officers

• Add to our stock of statistical (and other information) capital and improve quality

Productivity and innovation• You cannot command it• You can set conditions for it to

happen• The two main “framework conditions”

from economic policy principles: Improve flexibility e.g. remove all

unnecessary restrictions – enable changeProvide appropriate incentives e.g.

encourage or provide reasons for change

The result• Real improvements in our evidence based

capability for policy and decision making is needed: Real challenges in the economy – ageing,

climate, energy, skills Economic growth comes from productivity Also societal improvement, with better outcomes

• Nothing can be guaranteed, but if we can do this, it would certainly seem to improve, statistically speaking, the likelihood of success!