By James Adams
Evidence-based policy is the gold standard if you are a politician, bureaucrat or policy wonk.
People tend to be suspicious of ideology, so governments frame their decisions in terms of doing the logical thing rather than following their beliefs. In recent years, the current New Zealand government has developed what purports to be a new way of thinking that will ensure evidence underpins all social policy decisions: the social investment approach. However, Critics worry about its consequences for privacy, democracy and New Zealand’s poorest communities.
In the modern world, data is available like never before. The government has long collected information from those who use its services, and there is also an increasing body of research on social policy issues. Some of this has revealed startling insights; for instance, the Dunedin Longitudinal Study has tracked a group of a thousand individuals born in the 1970s and has found strong links between particular indicators in childhood and negative outcomes later in life.
There is a moral imperative for preventing people from falling off the cliff rather than picking up the pieces afterwards, but it also makes good financial sense
In theory, this means that the government can intervene early to prevent crime, welfare dependency or poor health before major issues arise. There is a moral imperative for preventing people from falling off the cliff rather than picking up the pieces afterwards, but it also makes good financial sense. Former prime minister Bill English claims that spending money upfront can prevent further, larger costs down the track.
That is why various government agencies have developed this new way of approaching social policy problems. According to Cabinet documents, the social investment approach means:
- setting clear, measurable goals for helping people who rely on public services
- using information and technology to better understand people’s needs and what services they are currently receiving
- systematically measuring the effectiveness of services, so we know what works well and for whom, and then feeding these learnings back into the decision-making process
- purchasing outcomes rather than specific inputs, and moving funding to the most effective services irrespective of whether they are provided by government or non-government organisations (NGOs).
So, the social investment approach is more than applying data to identify and prioritise issues. It is also about gathering insights about how effective programs are, so that government money can be targeted more effectively.
On the face of it, this all sounds marvellous. Politically left-wing individuals are likely to support the focus on helping those who need it most. Those on the right are likely to approve of the emphasis on efficiency and reducing future liabilities. People across the country can cheer for a good evidence-driven policy. Dig a little bit deeper, though, and see that all is not quite as it seems.
Framing the Social Investment Approach
Social investment means setting clear, measurable goals for helping people who rely on public services. Of course, we all rely on public services one way or another. Yet the social investment approach is not about these wider roles that the state plays. It is about ‘vulnerable’ people.
That being the case, it is natural to assume that the goal of any social policy is to improve these people’s wellbeing. Not so, suggests Dr Simon Chapple, Director of Victoria University’s Institute for Governance and Policy Studies. He argues that motivation for this ‘new’ approach is the same as for the ‘slash and burn’ welfare policies of the 1990s:
‘English’s claim is that social investment is a win-win by reducing the size of government while simultaneously enhancing people’s outcomes. However, when the nuts and bolts are examined, the principal win that government is measuring and incentivising is fewer fiscal dollars, not the secondary win which is better outcomes for people.’
There might be plentiful data in the modern world, but some things cannot be reduced to numbers. The debate over why the social investment approach exists comes down to trust – do you trust the government to care for the most vulnerable people in our society? Or do you listen to the more cynical voices?
Data Collection & Predictions
What the government says the social investment approach does is use information and technology to better understand people’s needs and what services they are currently receiving. This includes predicting future needs, or ‘forward liability,’ as the technical reports call it.
Collecting data about who uses public services can be a controversial area, as is described by EJP contributor Claudia Russell in her piece Ministry of Social Development, or Big Brother? In short, the Ministry of Social Development announced earlier this year that NGOs whom it funded to deliver services would have to provide data about the people that used those services if they wanted the funding to continue. The devil was in the detail: NGOs had long provided service-user information, but they had almost always removed people’s personal details from the data. Now MSD wanted everything, with no anonymity permitted. The Privacy Commissioner called it “excessive” and Women’s Refuges were understandably aggrieved. After all, if people knew they had to give up personal information, many of them simply would never seek help. The government backed down, and the problem went away, but where the line gets drawn between privacy and effective data collection remains a murky issue.
Data from the past can also contain useful insights for the future. One of the first Social Investment reports was the Treasury’s Characteristics of Children at Risk. It showed how kids who grew up in particularly bad circumstances were much more likely to end up leaving high school without NCEA level two, how they were more likely to get a benefit and more likely to get in trouble with Corrections. This is hardly a novel insight, but having the numbers to prove the link was a step forward. For instance, it found that one percent of New Zealand children had all four indicator issues:
- there was a CYFs finding of abuse or neglect;
- they had been mostly supported by benefits since birth;
- one of their parents had a prison or community sentence; and
- their mother had no formal qualifications.
If a quarter of the children in the most dire situations are referred to Youth Justice services, that means that three-quarters of those will get through their teenage years without coming into contact with the criminal justice system.
The fact that almost eight thousand New Zealanders age 0-14 experience this sort of childhood is a damning indictment on our nation. A quarter of these people will be referred to Youth Justice services. Of the females in this category, approximately one third will go on to be on a sole-parent benefit by the age of 21.
But it is important to not get carried away. Of the 121,000 children with three or four indicators, 35% will not experience any negative outcomes at all. If a quarter of the children in the most dire situations are referred to Youth Justice services, that means that three-quarters of those will get through their teenage years without coming into contact with the criminal justice system. As the report notes:
Children with no indicators or just one indicator are much less likely to have poor outcomes than children with two or more indicators. But because they are a much larger group of children they still make up more than half of all children who are expected to have poor outcomes.
In other words, if this was Minority Report (the film where they predict murderers before the crime gets committed), the data presented here would allow them to identify only about half of the murderers. Additionally, about a third of the people they do identify would be innocent. That is not a very accurate prediction. Of course, this is a bit different, because it is based on helping people out of poverty, rather than jailing murderers, but the question remains: is the data worth the ethical dilemmas it raises?
It is all very well to identify people who need more help; the real challenge is how to actually help them. Again, the social investment approach is full of promise in this regard. There is plenty of information on the Social Investment Agency’s website about assessing the effectiveness of past programs in order to ascertain what would be most beneficial today. Much of this is unavailable to the public – it requires access to the government’s Integrated Data Infrastructure (IDI), and given this data includes personal information, it is probably for the best that only some people can view it.
This does make it more difficult to see exactly how the social investment approach is being used. The sense we get is that more detailed data will underpin greater targeting. That is, the government envisages increasing the resources spent on those identified as most in need, and increasingly matching individuals to specific programs tailored for people like. At the same time, less time and money will be spent on those identified as less vulnerable.
Greater targeting can have a number of benefits. For a start, there will be less expenditure on people who do not require as much help, and more resources for those that do. In other words, there will be fewer false positives. However, it is also likely that there will be more false negatives, or more people who slip through the cracks.
The US welfare theorists Schuck & Zeckhauser have argued that targeting can drastically improve the efficiency of social programs, if it is done cleverly. They write:
Many policy failures occur when officials allocate scare resources to two groups: “bad bets,” who will derive substantially less benefit from the resources than others would and “bad apples,” whose behaviour in the program imposes significant costs on other recipients.”
Hence, they advocate avoiding bad bets and removing bad apples. This makes social programs substantially more efficient, even if it does involve (another) moral quandary. Are we okay with a system that lets some people slip through the cracks if it meant that most people would get better support?
Answering this question is going to need more than data analysis.
Beyond Evidence Based-Policy
In conclusion, the social investment approach is all about data, evidence, and flexible service provision. There is a lot of worthwhile thinking here, and I hope that the new government will continue to develop this idea.
We need to be able to use data effectively to help the worst-off in our society. We need to be more flexible in how we support people, and we need to ensure that each dollar of government expenditure has the maximum impact. However, I am less convinced that reducing future costs to the government should be given as much weight as it is presently. A focus on fixing the problems and building on people’s strengths might be preferable to reducing forward liabilities.
Similarly, social investment might purport to be an evidence-based approach, but it does bring up a number of ethical issues. From the rights of disruptive children to competing priorities over efficiency or effectiveness, social policy is a complex beast. Simply analysing the numbers is not going to be enough –we need to ensure that values are also at the heart of any social policy innovations.
Today, too many people live in circumstances that are, quite frankly, an embarrassment to our country. So when voters and governments alike are deciding what to do about this issue, I hope they use their hearts, as well as their heads.
The views expressed in the posts and comments of this blog do not necessarily reflect those of the Equal Justice Project. They should be understood as the personal opinions of the author. No information on this blog will be understood as official. The Equal Justice Project makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The Equal Justice Project will not be liable for any errors or omissions in this information nor for the availability of this information.
 Simon Wilson “Social investment: the two uninspiring words upon which the entire election could hang” (January, 2017) The Spinoff <https://thespinoff.co.nz/>.
Above, n 2.
 Social Investment Agency What is Social Investment? Plain English Report (July 2017).
 Above, n 4.
 Social Investment Unit Briefing to the Incoming Minister (February 2017) at 3.
 Julienne Molineaux “Is ‘social investment’ just a warm and fuzzy cloak for seeking to shrink the state?” (May, 2017) The Spinoff <https://thespinoff.co.nz/>.
 Ministry of Social Development Future Liability: Estimating time on benefit and the associated cost (October, 2010).
 Claudia Russell “Ministry of Social Development, or Big Brother?” (May, 2017) Equal Justice Project <http://equaljusticeproject.co.nz/>.
 Craig McCulloch “Data for funding ‘excessive and disproportionate'” (April, 2017) Radio New Zealand <www.radionz.co.nz/>.
 Treasury Characteristics of Children at Risk (February, 2016) The Treasury <http://www.treasury.govt.nz/publications/research-policy/ap>.
 Above, n 12, at 1.
 Above, n 12, at 2.
 Above, n 12, at 5.
 Above, n 12, at 5.
 Social Investment Agency “Tools and Guides” (July, 2017) <https://siu.govt.nz/>.
 Stats NZ “Integrated Data Infrastructure” (June 2017) <http://stats.govt.nz/>.
 Interview with Professor Alan France, Professor of Sociology & Social Policy
(the author, Auckland, August 2017).
 Above, n 4.
 Peter H Schuck and Richard J Zeckhauser Targeting in Social Programs (Brooking Institutions Press, Washington, 2006) at 2.