The NZ Initiative's Jenesa Jeram on whether social programmes work, the perils of planners, why people don't vote, solving the housing crisis, genetic engineering, hooking up with economists, and more

Today's Top 10 is a guest post from Jenesa Jeram, a policy analyst at The New Zealand Initiative.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

Elections are rarely the time for serious policy discussion, and they tend to bring out the worst in some otherwise top personalities. There are still a couple more weeks of horse race politicking endure, so here are some meat and veges (and a bit of junk food too) to make sure you get a well-rounded media diet.

1. There's an app for that...

Good social policy should be based on what works, not just what sounds nice. But could you guess which social programmes are effective just by hearing about them? This quiz looks at US social interventions, but imagine if we had a similar app to judge election promises. Or better yet, one that told us the cost-effectiveness of social policies too. The US is way ahead of New Zealand when it comes to measuring and publishing this sort of evidence (check out the costs and benefits of boot camps).

“We've described ten major US social interventions, and you'll have to guess whether they had a positive effect, no effect or negative effect.

The interventions were taken from those reviewed by the Campbell Collaboration, which brings together all the highest-quality research that's available on major social interventions to decide whether they're effective or not.”

2. Measuring social programmes

On that note, is it fair to say that most social programmes don’t work? When it comes to social policy, there is a real dearth of rigorously tested interventions. At best, you risk only having a small effect. At worst, you risk having a negative effect. Nevertheless, this article makes the case that while evidence-based policy is important, of even greater importance is choosing the right problem in the first place.

“It’s hard to say what fraction of social interventions “work” because:

  1. Only a couple of percent are ever rigorously measured, and many studies are underpowered.
  2. This makes selection effects potentially serious. If researchers tend to study more promising interventions, then the results will paint an overly optimistic picture.
  3. The proportion that “works” is sensitive to (i) the studies that are included, (ii) the outcomes that are included, (iii) where you draw the line for statistical significance, (iv) where you draw the line for effect size relative to cost, (v) whether you focus on individual studies or meta-analyses, and how broadly you aggregate, and (vi) which area you focus on (e.g. health vs education).
  4. A significant fraction of this research might not be trustworthy due to the replication crisis (“p hacking”, publication bias, etc).”

3. Planners exercise their minds (badly)

If you ever feared politicians becoming drunk with power, spare a thought for how free market economists view planners. Lifestyle economist Chris Snowdon has a go at central planners wanting to ‘incentivise’ (pay) people to exercise. For what it’s worth, I think I burned a fair few calories just from chuckling to myself.

“How do you design a town to encourage physical activity without banning cars and chairs? I don’t know, and neither does NHS England, so it held a ‘design for life’ competition to get some ideas. When the winners were announced this week, the chief executive of the NHS, Simon Stevens, said: ‘The NHS makes no apologies for weighing in with good ideas on how the built environment can encourage healthy towns’. There was no need to apologise because the ideas were not good. On the contrary, they were so fantastically bad that the mind boggles at the thought of what the losers came up with.”

4. Why people don't vote

Working in Wellington, it is easy to get caught up in the flurry of polls, minor political scandals and puff pieces. Every now and then, it is good for us Wellingtonians to remember that most of the time, the rest of the country just don’t care. Consider Manurewa in South Auckland, which has one of the lowest voting rates in the country. Here is a colourful and revealing piece about the people of Manurewa and why they don’t vote.

“I asked Archer, unemployed, whether he would vote. “Nah, too much effort looking into who does what. I'd be voting blindly, and there's no point in voting blindly." I told him that the suburb had one of the lowest voter turnouts in the country. "So people round here really don't care," he said, the emphasis on the second-to-last word adding a grim kind of pride to his response.”

5. Labour's GP policy

Remember ACT Party leader Jamie Whyte? New Zealand libertarians might recall him as a brave, smart and ideologically consistent leader. Most other New Zealanders probably only remember him as that guy who made some comments about incest. Well, he’s in London now writing for the Institute of Economic Affairs. Here he is on Labour’s GP policy. I hope no one has told him about National’s spending promises this election...

“Instead of paying at the GP’s reception, you will pay through your taxes.

That’s not quite right. Your tax bill won’t go up by $10 for each visit you make to a GP. Rather, your tax bill will depend on your income, and will bear no relation to how often you visit the GP. Going to the GP will be cheaper for those who do it, even if the cost of supplying it is unchanged. So people will go to the GP more than they now do, and the total amount of money being spent on GPs will increase.”

6. Hitting the ground running on housing

We’ve got a housing crisis on our hands and whatever government we end up with, they will have to hit the ground running. The Economist looks at how to solve Britain’s housing crisis, and recognises the relationship between local and central government as a major contributing factor. Sound familiar? It’s time for New Zealand to address the issue too.

“Councils miss out on much of the extra local tax revenue from new houses, because it is hoovered up and redistributed by central government. But they are lumbered with the cost of providing local services for newcomers. That should change. Councils should be allowed to charge taxes that reflect the true values of properties—and keep the proceeds.”

7. Regulating genetic engineering

I’d like to think we’re a long way off having these discussions in New Zealand, but you never know. Economist Tyler Cowen discusses the future of regulating genetic engineering. Could politicians really resist if voters demand choice over engineering favourable genetic traits?

“We might expect that the regulators will say no to the most dangerous applications of genetic engineering, but can we be so sure? The techniques will be available in many different countries, and over time the more lax standards will have greater influence, if only through “genetic engineering tourism.” Parents are also a potent voting bloc, and if they really desire such choices, they may end up getting their way.”

8. Solving youth unemployment

Youth unemployment has been a concern of all the political parties, but it cannot be solved by politicians alone. Solutions need to consider the perspective of employers, the perspective of young job-seekers, and most importantly why there is a discrepancy between the two. The Attitude Gap is a collaborative project that looks at the clash of attitude, cultural norms, and expectations that exist between employers and youth in South Auckland. The report and findings provide some unique and useful insights that have been missing from the conversation so far.

[From the Executive Summary] “Anecdotally, employers say they struggle to find local candidates with the ‘right attitude’. On the other hand, young people report that the experience of applying for jobs and encountering workplace culture is like entering a foreign country, with unfamiliar and invisible practices, language and rules.”

9. For the love of the country

Economist (and my colleague) Dr Eric Crampton loves New Zealand so much he wrote a whole essay about it. He’s happy that New Zealand isn’t adopting the same crazy policies as the rest of the world, but warns us that we can’t get complacent. Overly bureaucratic regulations could ruin our sane oasis. For a taster, check out the first two chapters on The Spinoff. If you can get past the Canadian accent, the podcast is worth a listen too. The full report is available here.

“Living in New Zealand and focusing on our very real social issues, it’s easy to forget that there are many things we do quite well. Or, to put it another way, that things are frequently a lot worse in other countries, even advanced prosperous ones. Over the next couple of weeks we serialise an epic essay from the New Zealand Initiative’s Eric Crampton, exploring what life is like in and out of New Zealand.”

10. “Relationship advice columns are strangely silent on how to hook up with attractive economists.”

Hey, it’s Friday and even economists need love.

“Even if you weren’t each other’s first choice, you’ll stick together because no one you prefer will match with you. It might not sound romantic, but let’s face it, you haven’t got any better options.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

31 Comments

#1 AND #2. Do social programmes work. Probably not. But if the social workers were less interested in making themselves feel good, and more interested providing some usefulness, then there might just be a chance.

Wonder what specifically is included / excluded in "social programmes". Is the Pension a social program, for example?

Not the way I was thinking of it Rick. But any income support and redistribution could be defined that way. As would differential tax rates.

#4. if you are too stupid to vote, then you are too stupid to vote.

Item 6 - yawn.
It's the same old 'deregulate planning and the problem is solved' nonsense.
Yes, to some extent planning deregulation is necessary and perhaps even a prerequisite to properly addressing the issue, but it's not so simplistic as that.

It's really about getting planners out of people's lives.

Mr Crampton is a bloody good read.

I listened instead, and also thoroughly recommend 'Outside the Asylum'.

The title appears to be, "The Outside of the Asylum" although I like yours better. I wonder why that one was chosen as it is so clunky.

Agreed.

Eric is always amusing, and the cheese-smuggling brought to mind Jasper FForde's (http://www.jasperfforde.com/index.html) 'Thursday Next' series, which occasionally features Welsh Cheese-smuggling.

So is #3 - paying folks to jog on urban pavements?? That presumes they don't need their knees after 50....

9. We do sprawl bigger and sprawlier in Auckland than anywhere else I can find. Good to be leading the world at something, take a bow Phil Goff.

Oh come on, seriously, what's your source of data for that? Or do I misunderstand you?

When Alain Bertaud arrived in Auckland, having seen it from the air, his first comment was "I never realised Auckland was such a European city".

Sure enough, urban-area density data show Auckland at 2600 people per square km, to be similar to several German urban areas, close to some Dutch ones, and denser than several comparable French urban areas. This is quite remarkable given the completely different history of European cities. The ultra high density that urbanists love are closely correlated with very high population levels, like Paris and London.

In fact Toronto with its 6 million people, is the only Anglo New World urban area denser than Auckland. Portland and Vancouver are nowhere near as dense.

Truly low density, is to be found in many US urban areas at 600-900 people per square km. There is hardly a more false myth, than the one that Auckland or any NZ city is "typical American-style sprawl". New York urban area, for example, has hundreds of square miles of suburbs with section sizes of 1 acre and larger. Auckland was found by a researcher a couple of years ago, to have 10 sections left, of 1/4 acre or larger that developers had not yet bought and chopped up.

If you are talking about leapfrog "sprawl" to Wellsford and Pukekohe, even this is subject to strict rationing of the supply of land to developers. Absolutely none of this growth is anywhere near enough, or anywhere near what a true free market might do in response to population growth and economic growth. Ironically, equivalent towns within 50 minutes drive of Manhattan, such as Plainfield, NJ, have decent houses for $100,000.

We used to be golden, but there is a new plan nowadays and sprawl is King.

It is the leapfrog, the removal of RUB from most of leapfrog area and wild planned exurban expansions of Auckland. Under the Unitary Plan Auckland City is allotted a less than 15% increase in area and is strictly controlled. Warkworth is allotted 200% increase, Orewa - 100%, Huapai - 200%, Riverhead - 80%; Pukekohe - 100% and none of these meet my definition of strictly controlled. Then there is every other exurban village, which has had their RUBs eliminated. Recipe for sprawl and isn't it just happening.

Auckland was found by a researcher a couple of years ago, to have 10 sections left, of 1/4 acre or larger that developers had not yet bought and chopped up.

Do you know what a "Large Lot" is and how many of them are in Auckland? That researcher was off by at least 2 orders of magnitude. There are maybe less than 10,000 sections in Auckland of 1/4 acre or larger.

200% increase for a piddly little town is stuff-all in the context of total growth needed. There should be NO rationing at all, of land able to be converted to urban use. The reason that decent depreciated family homes in a town 50 minutes drive from Manhattan, can be $100,000, is because of "no rationing". Farmland is all around at $30,000 per hectare and there is no gouge in the price if you are going to put a house on it.

You are quite right that it is stupid and perverse to be preventing development closer to Auckland, but there should be no rationing, period.

Are you talking about the artificial explosion in lifestyle blocks, when you argue that Auckland has thousands of "large lots"? I am talking about Auckland being unnaturally "infill developed" because of land rationing. Lifestyle blocks outside the 'growth boundary" do not qualify as evidence for a free market allowing large lots to continue to exist at reasonable prices closer to the city. Even New York urban area has genuine large-lot suburbs untouched by infill development, where the prices are lower than much smaller sections in Auckland.

New York doesn't have growth boundaries, but its "high" prices are justified to some extent by actual economic importance and agglomeration effects, combined with geography. Auckland's prices are ludicrous, and are the result of a classic racket and price-gouge thanks to land rationing.

Auckland is orders of magnitude less important than New York; its normal housing prices should be comparable to Indianapolis, Nashville, Winnipeg and Lyon. Not New York, London or Paris, or even Toronto. Country towns around Auckland should have houses even cheaper than in Plainfield, NJ; not several times more expensive. They should be at least as cheap as houses in country towns around Indianapolis, Nashville, Winnipeg and Lyon.

Do I have to post links to Real Estate sites in the locations I mention, to make my point? New Zealanders are some of the most gullible and easily deceived people in human history, given the recent record on house prices.

Completely random pick from a map: Givors, a rural town near Lyon.

https://www.globimmo.net/en/for-sale/real-estate/cl/givors/ChIJbVgxYwLk9...

This is in a true first world country, by the way.

Take two example of Auckland's policy: Swanson and Waiheke Island.

Swanson has great transportation linkages, excellent water services, an abundance of flat ground and as such is great site for medium density development. So obviously the Auckland Council has declared the flat horse paddock next to the railway station (brand new, few $millions spent) to be a foot hill of the Waitakere Ranges and banned development forever.

Waiheke Island is an island with poor transportation linkage, very minimal water services and only suitable for low density housing. Obviously the Phil Goff has stripped away any restrictions and wants that sprawl happening today.

"Stripping away restrictions" would involve that the land all around Auckland could be developed. You are not making sense. Drip-fed housing development permissions, a few hundred here and and few hundred there, around rural towns, is not "allowing sprawl". Allowing sprawl, what Auckland really needs, is a continual process of whole new Mangeres being built everywhere from the existing fringe, to around the rural towns you are mentioning. We did it once; it is just a question of when a stupid new ideology is adopted, not any realities about the limits to growth. If Mangere wasn't there now, and Auckland was a city of <500,000 people and growing rapidly (like it once was), the grand Central Plans would be preventing Mangere from being built!

There are US cities growing faster than Auckland, without a housing affordability problem. In fact affordable housing and fast growth go along together in the USA, as people choose those cities over the rip-off-house-price ones. But in NZ, planning groupthink afflicts all Councils, and none of our cities have growth-enabling administrations and affordable housing. Even Levin is more expensive than Plainfield, NJ, 50 minutes drive from Manhattan!

Utter nonsense.

It does seem a little nonsensical as a planning approach, but Auckland.

Absolutely it is nonsensical, but the way you are criticising it does not make sense either. Do you support the abolition of land-rationing? I want no drip-feeding, price-racketeering regulatory-quota development anywhere, whether it is Wellsford or the foot of the Waitakere Ranges or anywhere around Auckland. Why don't you just say the same?

From #2, "Nevertheless, this article makes the case that while evidence-based policy is important, of even greater importance is choosing the right problem in the first place."
This would be the closest yet.
But still, most social programmes are put in place by politicians bowing to pressure to "do" something to garner votes and favours by grabbing at incorrectly identified "problems" and trying to smash them with money and punitive disincentives.
Still a long way to go on this I think, but what would I know?, I don't work at a think tank.

What a farce NZ's immigration program is:

'In the year to June 2016, New Zealand issued 193,000 work visas, the Ministry of Business, Innovation and Employment reports. This does not include 91,000 student visas which confer some limited work rights.

Of the 193,000 work visas, only a sixth (32,000) were in the essential skills category. The rest were to people on working holidays, family members, people in a transitional study-to-work category and seasonal workers for the horticulture sector.

Of the 32,000 people granted visas under the essential skills category, only one in four were first-timers. The rest were temporary migrants already here. So it is not a case of 32,000 people being added to the skilled workforce that year.

And a startlingly low proportion - 7 per cent, or 2233 to be precise - were classified as construction trades workers like carpenters, plumbers, plasterers, tilers and painters. If you include scaffolders and builders' labourers, the proportion rises to nearly 10 per cent.

If they are typical of essential skills work visa recipients generally, only 800 were not already in the country.

The 2015-16 year was not an aberration. The proportions were similar in the two previous years.

The conclusion has to be that the impact of net migration flows on the housing market and the construction industry is overwhelmingly on the demand, not the supply, side.'

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1191...

"overwhelmingly on the demand, not the supply, side"

Well it had better be because nobody has any interest in any supply side changes.

Indeed as just what can be done on the supply side "cheaply"? Nothing IMHO.

Land bankers own the large sections of land needed to be released for mass construction? So how does that get massed released? Re-zone the land bankers land? they will then release it piecemeal to hold section prices up and make a killing, that will solve nothing. How to get around that? only one way I can think of and that is mass nationalisation of the land via compulsory purchase that will not go well in the global financial sector to say the least.

So before we are even started we a stuffed on land prices.

Then the next big cost of a house, who pays for the massive cost of infrastructure? roads, sewerage, water etc.
Existing rate payers cannot and Govn should not pay for it. This means the house owner is expected to pay for it somehow. Either upfront as happens now or a special purpose vehicle has to be formed that builds the infrastructure for the would be houseowners and charges them "rates" in effect we see a council within a council, efficient? ikky.

If one were obtuse one might take their thinking to silly extremes and call for a stop to all house building nationwide. 'The research is in, Brian called it, it's a wholly demand side problem.'

But that would be obtuse so I won't do that.

On the other hand it is Friday ..

What you mean is stop all immigration, since our immigrants create more demand for housing than their labour could possibly supply.

Yes, the assumption is immigration will be largely stopped whoever gains power.

Impossible. To start with those being currently processed - traditionally we do not change the rules retrospectively so that is say 45,000 next year then a year later it will be 13,000 uncapped partners (can we ever stop Kiwis being attractive?) and 4000 humanitarian - and most parties have promised to let more refugees in not less. Add just a few really skilled - say a specialist surgeon or a professor of IT - and I'm willing to bet that there will be 20,000 even if Winston won every seat.
That was residency. Temporary work visas are different but would take a few years to dry up those who are already here even if no more were issued.

That's no one's policy so likely an assumption of very few.

Exactly, why don't the people who want to save the planet by rationing land for development, also demand compulsory acquisition as part of the process? The consequences are all perverse if you ration the land supply and then just let the owners of the rationed land, price-gouge. You actually end up with less development that way anyway.

It is interesting to read the history of urban planning in the UK, there are a couple of good books by Sir Peter Hall and various colleagues. The experts in the 1940's who designed the new Town and Country Planning system (partly because of food-security lessons after the U-Boat blockade during WW2) definitely stated that compulsory acquisition was essential, to avoid the price-gouging effects that have occurred otherwise. This was never rocket science. The fact that we have had a whole global movement in a frenzy to constrain urban land consumption, but without compulsory acquisition, shows the adherents of the movement to be pretty stupid people - including the so-called "experts" - so why should we regard them as credible about anything? Including the alleged "need" for their kind of planning in the first place?

"...a special purpose vehicle has to be formed that builds the infrastructure for the would-be houseowners and charges them "rates" in effect we see a council within a council, efficient?..."

Absolutely! You just described the way it has worked for decades, in the parts of the USA where it is impossible to drive the price of urban land and housing up. Did you really think this up yourself - or have you been paying attention to Hugh Pavletich's lobbying efforts over many years now? The wheel already exists and works, re-inventing it is not clever at all, it means you ignored its existence for goodness knows how long, even as your society and your economy were being left behind.

Business Round Table shills at it again!