Randomised Policy Trials

Policy Ideas for Labor – Randomised Policy Trials
Voice, Summer 2011

In politics, there are few hotter potatoes than drug laws. So when the NSW Labor Government in 1999 was faced with a suggestion that it deal with drug offenders through a ‘Drug Court’, there were plenty of vocal opponents. To deal with the challenge, the government did something that was both smart policy and clever politics: it set up a randomised trial.

Like a randomised medical trial, offenders were assigned to the treatment or control groups by the toss of a coin, making the two groups basically identical at the outset. A couple of years later, it was clear that those who went through the Drug Court were much less likely to reoffend than people who went through the traditional judicial process.

Internationally, randomised trials of early childhood intervention, job training, housing vouchers, health insurance and microcredit have produced similarly valuable results. Farmers have used randomised evaluations for centuries, while medical randomised trials date back to James Lind’s 1747 experiment showing that citrus fruits cure scurvy.

We should not lightly dismiss ethical concerns about randomised policy trials, but they are often overplayed. Many government policies are surely ineffective, and some may even be harming the people they were intended to help. Part of the reason is that we mostly use low-quality evaluations rather than randomised policy trials.

Like other forms of evaluation, randomised trials have their limitations. But my best estimate is that less than 1 per cent of all government evaluations are randomised trials (excluding health and traffic evaluations, the proportion is probably less than 0.1 per cent). Given that you can’t get a new pharmaceutical approved in Australia without a randomised trial, it seems odd that hardly any policies are subject to randomised trials. One option would be to learn from the US, where federal legislation sometimes sets aside funding for states to conduct randomised evaluations.

What we need in Australian policy today is not more ideologues, convinced that their prescriptions are the answer, but modest reformers willing to try new solutions, and discover whether they actually deliver results. As Labor Party members, we must always remember that what defines us is the light on the hill, not a particular path up the mountain. As US judge Learned Hand famously said, ‘The spirit of liberty is the spirit which is not too sure that it is right’.