Friday, July 28, 2006

"What We Know That Ain't So"

"It's not what we don't know that's the problem, it's what we know that ain't so." The quote, in a variety of forms, is variously attributed to Mark Twain, Will Rogers, and others. (The Penguin Dictionary of Modern Humorous Quotations, 1987, attributes it to Josh Billings.)

Yesterday (July 27) a couple of pieces happened to cross my desk that, without quoting the line, applied it both locally and globally.

Karen Kubby, writing in the Iowa City Press-Citizen ("Transforming Assumptions Into Evidence-Based Opinions") described a statewide program to determine the accessability of emergency contraception from pharmacies in Iowa. She assumed Wal-Mart would be the only pharmacy in many of Iowa's small towns. Once data was substituted for assumptions that turned out not to be true.

Later in the day, looking through my latest issue (July/August) of the Boston Review, I read a lengthy article by
MIT economist Abhijit Vinayak Banerjee in a Review "New Democracy Forum" of articles on "Making Aid Work" -- How to Fight Global Poverty Effectively (also available here). Not only is it one of the best pieces I've encountered regarding an analytical approach to the effectiveness of foreign aid programs, it's one of the best collections of analytical approaches I've seen for evaulating any program. One example: It turns out that if the goal is to get more kids into primary school it is more effective to spend $3.50 per child a year on deworming medicine (to reduce their down time from illness) than the 1800-times-more-expensive Mexican Progresa program of cash transfers to mothers.

In writing about the Iowa Values Fund I noted that, "The prestigious, independent Corporation for Enterprise Development concludes that 'most economists agree incentives are not good development policy' because they foster unfair competition, don't create net new jobs and divert attention from better strategies." Nicholas Johnson, "Values Fund May Not Be So Valuable for Taxpayers," Des Moines Register, April 13, 2006. In this online, footnoted version of the op ed, I include a link to the Corporation for Enterprise Development (CED) Web site. These folks aren't ideologically opposed to development programs -- quite the contrary; it's their whole reason for being. It's just that, as they've "transformed assumptions into evidence-based opinions" (to quote Karen Kubby) they've come to realize that programs like the Iowa Values Fund just don't work. They're not cost-effective. There are better ways to promote economic development. And the CED is made up of pragmatists who are looking for those better ways.

"What we know that ain't so." It's costly in many ways; not just the money (often tax dollars) we spend in wasteful ways ("A rain forest to promote Iowa tourism, anyone?"), but in the opportunity cost of those inefficient programs that result in valuable lost time as well as diverted dollars.

[Related: Nicholas Johnson, "Getting More Than We Pay For," July 20, 2006.]

1 comment:

Anonymous said...

For anyone who is interested in making wise charitable investments, as a start visit Plug in a non-profit name and you quickly get to see how much is spent on programming, administrative, and fundraising.

It is a good stat, but won't confirm the efficienccy of a charity's programs. For instance the Red Cross has fairly good (low) overhead costs but I still prefer not to give to them because I think they are overly politicized and too large to be nimble, as was seen in New Orleans.

Check out Direct Relief Internationl and our very own Iowa Citizens for Community Improvement.