Social experiments as good public policy

New York City Mayor Michael Bloomberg recently announced a new privately-funded program aimed at moving families out of poverty. The program, Opportunity NYC, is being called a conditional cash transfer program. The basic gist is that participating families will work toward a series of goals and will receive cash bimonthly for each goal they meet. After a year a family could earn up to $5,000.

It will be interesting to see how this program is received. Most of the goals are short-term (school attendance, doctor and dentist visits, job training activities), but it is long-term planning and goal setting that will be the key to truly lifting these families out of poverty, I would guess. It's not clear how many years the families will be in the program, nor how long they anticipate the funding will last. Opportunity NYC is modeled on a cash transfer program in Mexico that has been shown to be effective. Whether small cash rewards provide the same incentive in New York City as they do in Mexico is yet unknown.

The most encouraging thing about this program, however, is that it is designed with a built-in evaluation, so that its effectiveness can be analyzed scientifically. (There will be a comparable control group of families who will work toward the goals but not receive the cash.) If a government is going to try a new and innovative program, even if it is privately funded, ensuring there will be a rigorous evaluation is important. If it works and is cost-effective, great...bring it to scale. If it doesn't, it is unfortunate, but better to know than to expose even more families to it.

This is a lesson Milwaukee and Wisconsin should learn. Innovation in public policy can be desirable, but without evaluation from the get-go, we don't know whether we should invest more or try another option. It shouldn't matter whether the innovation is publicly or privately funded; taxpayers want to know they are making wise investments just as much as foundation officers do. Evaluating after several years and even more millions are spent is not good public policy. . . no matter what the results of the underlying program turn out to be.