Effective Policy-Making through Experimental Governance

In the article about Finland experimenting with basic income, author Elizabeth Nolan Brown details how a guaranteed basic income could save Finland millions and simplify the welfare system, as well as get rid of the disincentives to not work that many unemployed face under the current system. In theory Universal Basic Income has many positive benefits; it gets rid of welfare, incentivizes the unemployed to seek jobs without personal cost, reduce inequality etc. Despite this, it has only been tested out in small scale setting. The Finns would be the first country to try it out on a large scale, and it is all due to experimental governance [1] – the Finns have created an ecosystem that encourages social innovation through evidence-based research.

The Finns are not the first to toy with this idea – the Swedes came up with something similar where there would be a monthly payout of 2,500 francs for every citizen. The subject however was shot down during a recent Swiss referendum citing high potential costs and big tax hikes. The Finns, on the other hand, were able to move forward with this idea by introducing it as an experiment. Experimentation allows an idea to be introduced to society in a gentle, low-cost away; if the results are undesirable or inconclusive, another design could be tried or the policy could be scrapped [2]. Finland’s basic income experiment will entail a test group of randomly selected 2,000 unemployment benefits recipient, who will be paid 560 euros a month with access to partial benefits. Their life choices and outcomes for the next two years will be compared to another randomly selected 2,000 unemployed benefits recipient who are governed by the current system. This type of evidence based research allows governments to experiment, measure, scale and ultimately pick the policy that is “better” – where greater social impact occurs per unit of input invested [3], instead of simply theorizing on the impact. In addition, there is a feedback loop to policy so they can accurately scale these large experiments to a policy level.

The US has also followed suit – President Obama created a Social Innovation Fund to “Identify and grow programs with evidence of compelling impact” [4]. However, only a small portion of federal money is allocated to competitive, evidence-based selection processes that focus on measurable results. Furthermore, it faces backlash from conservatives – Michelle Malkin from the National Review refers to it as a “left-wing slush fund” that lacks transparency and accountability [5]. How can the US government overcome these obstacles and work to ensure that the funds are maximizing social impact? How can they reach bipartisan agreement on policies that may be controversial (i.e. abortion, climate control) but are proven effective?

[1] http://www.demoshelsinki.fi/en/2015/12/08/this-is-why-finland-is-able-to-implement-the-basic-income-experiment/
[2] https://www.bloomberg.com/view/articles/2016-08-31/finland-s-basic-income-experiment-is-too-timid
[3] http://www.forbes.com/sites/skollworldforum/2012/11/12/why-we-arent-getting-the-full-benefit-of-social-innovation-and-what-the-government-should-do-about-it/#472886015c6d
[4] http://www.forbes.com/sites/skollworldforum/2012/11/12/why-we-arent-getting-the-full-benefit-of-social-innovation-and-what-the-government-should-do-about-it/#472886015c6d
[5] http://www.nationalreview.com/article/351038/obamas-social-innovation-slush-fund-michelle-malkin