Thursday, October 29, 2009

The forgotten Straits?


The Torres Strait Islands, which lie off the northern tip of Queensland's Cape York Peninsula, are one of the most unique - and arguably least understood - regions of Australia.

A population of about 7000 live on the 17 of 274 islands which are inhabited.

Unlike mainland Indigenous communities, Torres Strait Islanders weren't dispossessed of their land by colonial policies and managed to integrate, rather than be overrun by, western culture.

Having said this, the region has serious policy challenges in the areas of economic development, climate change, border security and health - some of which I've outlined below.

From my limited involvement in the issue, our policy elites in both Brisbane and Canberra seem poorly equipped for the challenge, partly because of the Islands' isolation and developing country characteristics.

Border security and health

The northernmost island of the Torres Strait, Saibai, is just 5 km from Papua New Guinea (PNG). Under a
treaty with PNG, residents can travel across the border to engage in customary trade and ceremonies.

The disparity in living standards between the Torres Strait Islanders (disadvantaged by Australian standards) and PNG people is large, with a growing number of PNG people coming into the region to access health services. There are
concerns about the risk of HIV and TB infection as a result of this movement.

The dispersed nature of the islands also makes it an easy target for drug trafficking and illegal fishing. A
Senate Inquiry is about to look at the issue of border security in the region.

Employment and economic development

At least 1400 people in the Torres Strait (rough estimate) rely on
Community Development Employment Projects (CDEP) subsidies to keep them in a job. CDEP is meant to prepare people for real work, but in reality its more like work-for-the-dole.

That's why its a good thing the Australian Government is planning to reform CDEP from July 2010, like they did recently on the mainland. This would involve converting positions that are involved in essential service delivery to fully-funded government jobs, while transitioning the remainder to fully-funded private sector jobs.

The risk with this approach is two-fold: firstly, a sudden removal of CDEP without alternative options in place would have a devestating economic and social impact; and secondly, businesses, already struggling in the region's small and isolated economy, may find it hard to employ the additional people and may also struggle to remain viable without CDEP subsidies.

One industry that does have potential is fisheries: the region's fishstocks are under-utilised. However, making the most of this resource will mean resolving issues around Indigenous aspirations for ownership.

All in all, bringing the Torres Strait Islands fully into the mainstream economy is going to be a huge challenge.

Climate change

If climate change isn't happening, someone forgot to tell the Torres Strait Islanders.

A recent House of Representatives Inquiry found climate change is already - or soon expected to - impact on marine ecosystems and fisheries, water supply and health including the spread of diseases. It also found erosion and inundation is already a major hazard threatening communities, cultural heritage sites and infrastructure in the region.

Looking ahead

It may sound like I'm trying to peddle doom and gloom here. But in reality the people of the Torres Strait are far better off as part of Australia, with our vastly greater resources and expertise, than PNG. Which is just as well, because resolving the issues I've outlined will require plenty of both.

The question is whether our leaders are prepared to take the time to learn about the region, its people and its challenges, even though there isn't much political mileage to be gained from doing so.


Thursday, October 22, 2009

When push comes to nudge

I'm currently reading Nudge by Richard Thaler and Cass Sunstein.

It's a highly accessible journey into the growing field of behavioural economics.

The central point of the book is that people can be "nudged" towards desirable behaviour in simple and non-controlling ways that maintain choice.

A nudge is defined as:
any aspect of the choice architecture that alters people's behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. (p.6)

The case for 'nudging' comes from the seemingly self-evident idea that people are humans not econs.

In other words, people are subject to limited rationality and flawed decision making, rather than being rational, utility-maximising individuals ('econs') as described in mainstream economic theory.

Humans have an inbuilt propensity for seriously flawed decision making and behaviour, which has major implications for public policy. Psychological experiments have shown that rather than doing detailed analysis before making decisions, humans use a variety of shortcuts or 'rules of thumb'*. Humans also tend to be over-optimistic, overconfident, loss-averse and biased towards the status quo.

For example, people tend to hugely underestimate their risk of developing health problems, resulting in many being under-insured.

The good news is that by tapping into these psychological flaws/tendencies, people can actually be nudged towards doing the right thing by themselves and others. (this can also be exploited for 'evil' by advertising companies!).

The book is full of amusing and effective examples of nudging, like the case of the European airport that wanted to reduce its cleaning costs. It stuck fake flies on its urinals and found that men began aiming at them, reducing spillage (and cleaning costs) significantly!

Many charities have long dined out on the fact that people tend to give more when the suggested minimum giving amount is high (e.g. $100 instead of $20).

Thaler and Sunstein believe in nudges so much they have even suggested a new political philosophy - "libertarian paternalism".

I can see a lot of benefit in policy makers taking on board the insights of behavioural economics. It means government having an active role but developing policies that are smarter, less intrusive and less costly.

Having said this, the 'nudge' paradigm is limited - it trivialises harmful behaviour as a psychological rather than moral/ethical problem. And it assumes that people can be sub-consciously led towards good behaviour without having to explicitly turn away from their old way of doing things.

So.... have you been 'nudged' lately??

*Rules of thumb include anchoring (using a familiar starting point and then adjusting), availability (assessing likelihood of risks by how readily examples come to mind) and representativeness (making judgements based on stereotypes).

Thursday, October 15, 2009

Evidence and ideology in Indigenous policy

To achieve good public policy outcomes we need more evidence and less ideology.

Do you agree with this statement?

Because its the constant refrain from politicians, academics and certain sections of the bureacracy and media.

Its been especially evident in Indigenous policy, where successive governments have claimed to be driven by "what works" rather than "the failed ideologies of the past"

In my opinion this approach is flawed in that it creates a false dichotomy between values and ideas ('ideology') and scientifically formulated knowledge ('evidence'). It also assumes that:
  • evidence replaces the need for a political process to decide what the policy goals and ethical constraints should be.
  • evidence (particularly quantitative data) will always provide a clear policy direction.
A classic case in point is the current debate about whether the Cape York Welfare Reform trials in North Queensland have been responsible for the dramatic increases in school attendance in Aurukun and Hope Vale.

The Australian certainly thinks so, having backed the Noel Pearson-inspired trials from the start. Others, meanwhile, are not so sure.

Its a tricky one because while there is a clear correlation between the commencement of the trials in mid 2008 and improved school attendance, there are plenty of other possible causes, such as improvements in school leadership.

There is also the problem of isolating cause and effect. If CYWR was responsible for the improved attendance, which part of the reforms made the most difference? Was it the 'tough love' income management measures imposed on parents (as The Australian suggests), or the support services provided?

At this point the "evidence" raises just as many questions as it answers.

Yet it seems that the politicians have already (rightly or wrongly) decided that income management works and should be expanded to other communities - Logan being the first cab off the rank.

A case of ideology trumping evidence perhaps?

Or just an indication that in public policy the two can never be completely separated?

Over to you.

Monday, October 12, 2009

Searching for a narrative

I really enjoyed this latest contribution from David Burchell at The Australian.

He asks whether the leaders of the Government (Mr Rudd) and Opposition (Mr Turnbull) have over-dramatised the differences between their parties in the search for a meaningful political narrative.

My favourite line:

And so there they stand before us, like the shimmering cities of Cathay: two rival fantasies, each as terrifying or as promising as the other, and each with as much plausibility as those gold-paved streets.

I tend to agree with Burchell that the differences between the parties, especially on economic policy, lie mainly in rhetoric rather than reality. For example, when all is said and done, their views on the appropriate size of the fiscal stimulus are closer than many people realise.

A possible exception is climate change, where there is clearly a group of Coalition MPs who are opposed to an emissions trading scheme. But surely this is more to do with different constituencies (e.g. the Nationals country/regional base) than some neoliberal / socialist ideological divide?

Political narratives defined by what they are not provide no vision for the nation and I wouldn't be surprised if an already disengaged public switches off.

What do you think?

Saturday, October 10, 2009

Are we over-governed?

Why ease back into blogging gently when you can jump straight to a real doozy like federal-state relations?

Australia's federal system has come under increasing scrutiny over the past few years, with many people questioning why a country of just over 20 million needs to be governed by three levels of government.

Waste, duplication and inefficiency are just three of the arguments against federalism.

The debate around federalism has taken place in the context of increasing disillusionment, cynicism and apathy with regard to politics, politicians and public policy. A common perception is that State Governments are incompetent and need to be abolished and replaced by regional administration from the Commonwealth.

Business groups have also joined the chorus of voices calling for standardised and harmonised policies, legislation and regulations across Australia.

In the other camp, you have people (e.g. here and here) arguing that for all its faults federalism offers more responsiveness, lower taxes and greater transparency than the unitary systems found in countries such as the United Kingdom and New Zealand.

The debate isn't purely academic: The Howard Government took centralism to new levels when it took over a hospital in Tasmania in 2007, while the Rudd Government has used the Council of Australian Governments (COAG) to place stringent requirements on the States to deliver in areas such reducing Indigenous disadvantage.

So what do you think?

How could our federal system be improved to provide more consistent and effective policy and services for Australians?

Is abolishing the States and Territories part of the answer or just a red herring?



Welcome back

Hello folks,

Its been over one year since I last posted on my blog, and to celebrate the occasion (and reflect the fact that I'm back in Aus) I've renamed my blog along more generic lines to encapsulate domestic public policy, which is taking my attention at the moment.

There are currently multiple public policy challenges facing Australia's democracy but unfortunately the agenda is often set by media outlets, who are less concerned about informing public debate and more concerned about personality clashes and trivialities. None of this is conducive to a vibrant democracy.

I hope this blog will provide a forum where people can engage in debate and discussion about important issues while maintaining a respectful and relaxed atmosphere. This doesn't mean that we shouldn't have opinions - but it does mean that disrespectful or mendacious contributions aren't welcome.