Complexity and context in social systems

This page and the others under the Features head contain posts that appeared first in the Social Policy Bonds blog

One of the benefits of expressing policy goals in terms of outcomes is that doing so allows us to contract out the identification of complex relationships to a wider pool of people than does the conventional policy approach. With something like climate change, the complexity is largely about the scientific relationships between cause and effect. The Kyoto process assumes the primacy of anthropogenic greenhouse gas emissions as the cause of climate change, and the reduction of those gases as the best way of dealing with the problem. These are assumptions only, which is perhaps the main reason that nothing meaningful is being done.

Complexity also manifests itself in social systems and the Social Policy Bond approach, which does not assume how best to solve a problem, could be preferable to existing efforts to solve our social problems. In an article about the US educational system, Peter Schrag wriets about America's apparently poor performance, despite higher spending and smaller class sizes:

In fact, a lot of such international comparisons lack context and are therefore debatable, because of the relative paucity of social services in this country - as opposed to the universal preschool, health care, and similar generous children's services provided in other developed nations - our schools are forced to serve as a fallback social-service system for milions of American children. Schoolhouse Crock (subscription), Harper's Magazine, September 2007

It's difficult to see how the current policy approach can address such inherent complexities. Instead of targeting educational outcomes explicitly, government is more inclined to increase funding for schools: it rarely thinks beyond existing institutions and methods. A better response might lie in (say) improved pre-school facilities, or healthcare or counselling for single parents, or whatever, but the current system offers no incentives to explore such possibilities. And the individuals embedded in the system - teachers, bureaucrats - are almost certain to see more funding for their particular element of the system as the solution.

A Social Policy Bond regime would be different. It would target the outcomes and, essentially, contract out the achievement of these outcomes to the market: a much wider, more motivated pool of people, who need not be afraid of offending existing interest groups or terminating failed experiments in their search for answers.