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Evidence Based Decision Making: Regression and Discretion

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Candi Choi
October 3, 2017


“The time has come for us to decide whether collectively we can afford everything and anything we think of simply because we think of it.” – President Ronald Reagan, January 1967

Good governance of public goods takes on different shapes at the local, state and federal levels of government. However, one thing that remains the same is that there are times when good governance, public goods and the programs associated must be evaluated. Policies that are supported by an evidence-based approach should be able to stand alone, withstanding the currents of human biases or different policy positions reflected through partisanship or favoritism. This requires evaluation of budget practices as well as public service programs. That is good governance.

Many times the priority of determining what is and is not a public good is challenging. Hence, the need for an evidence-based approach that determines what has proven to be successful without externalities. There is also a need for governments and subsequent policies to provide public opportunity equally, rather than attempt to make each individual equal. So, the parameters of government research must be considered. As such, there are numerous types of assessments, comparisons and analysis’ public administrators use on a daily basis that can rely on a non-random regression to provide more reliable data.

A specific local government case comes to mind when talking about evaluation methods. Public officials are required to make decisions within the confines of their discretion. While comparing contingency funds in local government budgets, I came across a county that did not recycle remaining surpluses from one year to the next, even during times of public hardship (bolstering highest foreclosure rates in their region, the great recession, and a damaging tropical storm). Instead, the locality focused on maintaining their AAA bond rating through funding their unassigned fund balance at higher than their minimum capped amount. They held a revenue stabilization fund and each Board Supervisor had an office budget for “discretionary” spending — which accumulated from year to year (some had saved up to $500,000). This was done by using alternative resources, such as increasing taxes, cutting public services and capitalizing on low interest rates for infrastructure. Yet other local governments, within the same economic environment, supported budgeting policies that re-used the funds in the next fiscal year. However, those governments were able to continue budgeting with an AAA bond rating or were willing to put the bond rating aside in order to fund services afforded to their populations during the same economic times.

One could say it is simply differences in priorities. Sure, but how those priorities actually address the needs of the community must be measured. For this reason, a functional government requires continual analysis of budgeting practices and public programs. If the equity of a priority or a program is never evaluated against the needs of the community, it will be hard for any reasonable person to support. As an example, if a public charity is to provide money to an organization it wants to know what research is out there indicating that such approach would work when put into action. Once the charity makes its contribution to a specific institution it can see the results through the organization’s financial records and the programs provided. The priorities of the organization are constantly weighed for future contributions. Public entities need to measure governance as much as it needs to measure services.

In his first Inaugural address as California Governor, President Ronald Reagan said, “the truth is, there are simple answers — there just are not easy ones. The time has come for us to decide whether collectively we can afford everything and anything we think of simply because we think of it.” Sure, it is not easy, but how do we prove causal inference without making assumptions, or thinking it up? One way is through a regression series showing trends in a policy, say crime or AAA bond ratings, within a single figure to be interpreted with a rise and a fall, as bad and good indicators, respectively. In a 1989 Journal of Public Policy article “Problems of Theory and Measurement”, Martin Bulmer calls for analysts to construct indicators for alternative assumptions and connect indicators closer to the major concepts used to analyze the social phenomena.

So, what are the needs of the community? They are not the obscure terms that make their way into policy through a political debate. Consider the term “discretion.” Elected officials have discretion over public affairs. But that’s not to say they have discretion to anything they darn well please. Instead, their discretion is limited to the confines of those affairs. Elected officials actually have the opposite of discretion to everything. They have the managerial discretion to yield back anything that is not to be within their discretion (i.e., surplus funds). It is law in states like Virginia. This gives the public an opportunity to reach their full potential by means of their decisions.

Author: Candi Choi holds an MPA with specialization in local government management. She has experience with local budgeting, planning and constituent affairs. Her contact email is [email protected]

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