Six Methods Changing Policy Making

All countries face their unique challenges but advanced democracies also have much in common: the global economic downturn, aging populations, increasingly expensive health and pension spending, and citizens who remain as hard to please as ever.

At an event last week in Bavaria, it became clear that there is a growing consensus that governments face another common problem. They have relied for too long on traditional legislation and regulation to drive change.

There was much excitement about the potential to avoid over-regulation by using different government tools to help tackle social issues and improve outcomes for citizens. Here are six key methods:

1. Behavioural economics:

The Behavioural Insights Team (BIT), which spun out of government in 2013 and is the subject of a new book by one of its founders and former IfG Director of Research, David Halpern, is being watched carefully by many countries abroad. Some are using its services, while others – including the New South Wales Government in Australia –are building their own skills in this area.

BIT and others using similar principles have shown that using insights from social psychology – alongside an experimental approach – can help save money and improve outcomes. Well-known successes include increasing the tax take through changing the wording of reminder letters (work led by Institute for Government alumni Mike Hallsworth) and increasing pension take-up through auto-enrolment.

2. Market design:

There is an emerging field of study that is examining how algorithms can be used to match people better with services they need – particularly in cases where it is unfair or morally repugnant to allow a free market to operate.

Alvin Roth, the Harvard Professor and Nobel prize winner, writes about these ‘matching markets’ in his book Who Gets What and Why – in which he also explains how the approach can ensure that more kidneys reach compatible donors, and children find the right education.

3. Big data:

Large datasets can now be mined far more effectively, whether it is to analyze crime patterns to spot where police patrols might be useful or to understand crowd flows on public transport. The use of real-time information allows far more sophisticated deployment of public sector resources, better targeted at demand and need, and better tailored to individual preferences.

4. Transparency: Transparency has the potential to enhance both the accountability and effectiveness of governments across the world – as shown in the latest Whitehall Monitor Annual Report by the Institute for Government.

The UK government is considered a world leader for its transparency – but there are still areas where progress has stalled, including in transparency over the costs and performance of privately provided public services.

5. New management models:

There is a growing realization that new methods are best harnessed when supported by effective management. The Institute for Government's work on civil service reform highlights a range of success factors from past reforms in the UK – and the benefits of clear mechanisms for setting priorities and sticking to them, as is being attempted by the government's new(ish) Implementation Taskforces and the Departmental Implementation Units currently cropping up across the British Government.

I looked overseas for a different model that aligns government activities with citizens’ concerns – in this case, the example of the single non-emergency number system operating in New York City and elsewhere. This system supports a powerful, highly responsive, data-driven performance management regime.

But like many performance management regimes it can risk a narrow and excessively short-term focus – so such tools must be combined with the mindset of system stewardship that the Institute has long championed in its policymaking work.

6. Investment in new capability:

It is striking that all of these developments are supported by technological change and research insights developed outside the government. But to embed new approaches in government, there appear to be benefits to incubating new capacity, either in specialist departmental teams or at the center of government.

The UK has invested in such teams in all the areas where the UK is seen as a global leader. All governments are some way from achieving perfection – both in terms of their use of regulation and in harnessing the full power of their alternatives. However, it is increasingly clear that there is a global conversation on effective government, one in which it is worth taking an active part.

Tom Gash is a senior fellow at the Institute for Government think tank and an independent adviser to governments around the world. You can follow him on Twitter @Tom_Gash. He wrote this piece as part of a longer article.