What is a good response to failure? More failure!!

I've been reading a lot lately about policy failure. The main thrust of the book is that most policies are amazingly inefficient generating more costs then benefits. Some of the policy failures discussed are the drug review process, various EPA mandates, financial regulations, and highway funding.

I have a few issues with the analysis, the largest of which is that I don't know that all the costs and benefits have been appropriately looked at. This is an issue I have with classical economics in general, they only look at things that can be monetized and modeled leaving out a number of important considerations.

But the real thing that I wanted to talk about was that this article reinforced an idea that has been bouncing around in my head for a while. Performance based policy and vertical goal integration. While that may sound like two idea they are tightly merged in my head.

Performance based policy is the idea that any policy, government or private, should have a specific goal, a concept of how it is to be achieved, what the effects will be on other systems, a standard against which progress can be measured, and a review process to see how you are doing.

Doesn't this sound obvious and rational? Why do something if you don't have a goal, and a way to figure out if your getting there. Without measures and reviews you could waste time, money and energy on something that is totally fruitless.

I think this is especially important when it comes to public policy. I would think that if a politician could say "We were here and now, thanks to your taxes, we are here. And that means we are this much better off" then that person would do quite well in the next election. I suppose they kind of do this already with their earmarks, "Yes I brought $5 million dollars into my district for something completely useless!!"

That brings me to my next point, vertical goal integration. This is the idea that everyone is working towards the same goal at different levels, and knows what role they play. In a company the goal at the top level may be to make the shiniest widgets. The middle management would then have a goal to keep the factory floor clean to make sure no dust made the widgets less shiny. Does this make sense? Goals that work together based on the responsibilities of the person, or group in question.

I heard of one company where this was practiced so well that the janitor knew the company goals, region goals, local factory goals, department goals, and individual goals. He knew exactly where he stood, and how he helped the overall mission of the company. What a great thing not only for efficiency, but for morale as well.

Of course the above story works so well not only because they had goals, but also a way to measure them. If at any level there was consistent problems actions would be taken. Actions may include firing a person, maybe a policy change, or the introduction of new technology. It doesn't really matter what the change is, the point is a feedback loop was created so everyone could see where they were, where they were going, and how they were getting there.

It seems that there is a lack of this understanding all over the place. Almost every company I have worked for has had a hard time with this concept; a failure to recognize these concepts is endemic in government.

With ideas like this that seem so simple and intuitive to me I wonder why they are not practiced, is it because they are not obvious and simple, are other people just stupid, have other people just not been exposed to the idea, or are people threatened by these ideas and actively fight them off?

One thing a can predict, regardless of why these concepts aren't used, until someone starts making and keeping goals there will always be plenty of failure for everyone.

Don't Lynch Me, I do Roads

I just read a great article (here) about how urban planners are the true evil cause of the global recession.

In brief the author states that urban growth boundaries, an invention of urban planners, artificially restrict the supply of new housing causing a boom/bust economic cycle. This combined with new securitized mortgages brought down the the whole system.

Urban growth boundaries really do limit the supply of houses. They pretty much say that no one can build anything outside of a circle that a planner draws on a map. The primary reason that planners do this is to increase density, preserve open space, preserve agricultural land, and to limit commute times.

Now all of these reasons seem like good things right? Well, maybe not density. That is usually sacred to urban planners however because density to them also means that transit systems will work, more diversity, and more lively and walkable area; in short that they did something good.

So my question is which is more important, avoiding economic collapse, or getting all of these other good things. Actually the question is: do growth management policies provide the things promised? I don't know, but I read another interesting thing (here) about how cities that generate a sense of community have better economies then other cities. Then I read this article talking about where most young people want to live. The interesting part is that it list a number of cities that have urban growth boundaries.

I admit that the best research is done in the first article, but it was also written by the Cato Institute which is a very openly libertarian think tank. If it had said anything good about government it never would have been published. I don't know the biases of the other articles, and they are not as rigorous.

Really it all comes down to who you trust to give you the right information. That is why people love Glenn Beck, NPR, Billy Graham, or Billy Idol. There is no way to know everything so if we find someone we can mostly agree with we keep listening. This is why it is important every once in a while to question the assumptions underlying what we hear. If we don't we just become that jerk it spouts off about something they obviously don't know anything about, and I am sure we have all seen that guy at least once in our lives.