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Orwell that ends well: Can evaluation save us from ourselves?

Published by Anonymous (not verified) on Tue, 01/09/2020 - 3:35pm in

I really love this design by Casey Finley, who was kind enough to allow me to publish it here. He has a very distinctive style which is really coming into its own as he works on it. For instance, see here and here.

When I first saw the Productivity Commission’s Draft Indigenous Evaluation Strategy, my heart sank. I’d had had several quite extensive meetings with Romlie Mokak, the Indigenous Commissioner at the PC who struck me as a person of great intelligence, straightforwardness and practical commonsense. He and his team at the PC had also seemed interested in my own thoughts about evaluation and the contradictions involved in the way it is being embraced as a panacea, as something that can save the system from itself. But though that interest turned up in the report, it did so as reportage – including a box on my Evaluator General model – rather than real engagement on the ideas.

Often at times like this, it’s best to just keep one’s mouth shut and not make enemies but, without much hope of being understood within officialdom, I thought I really should bear witness to the travesty that it seemed to me was unfolding. And I’m glad I did. As I wrote, lots of things I’d been pondering for a good while started falling into place. For instance, you’ll see my reference to Lord Acton’s faultline introduced in Section 3 as integral to the analysis rather than a throw-away line. But there are plenty of other examples.

These things enabled me to clarify what I think the challenge is. At bottom, it’s a challenge of bona fides. Are we prepared to face up to uncomfortable truths? I’ve always thought in my own life it’s the only route to self-betterment. And it’s all I have to offer officialdom. It seems to me what Orwell was about.

It turned into a long piece so I’m grateful to Peter Browne who runs the excellent Inside Story for publishing the piece. Like the themeatisation of so many things, publishers seem increasingly preoccupied with the form of a piece, specifying length, subject areas and so on. Of course, targeting is the essence of publishing, but so too is quality, so I’ve always appreciated publishers who vary their guidelines somewhat to accommodate what matters most to authors. Anyway, Peter did that for me here, for which I’m grateful.

I’ve had a very good reaction from those who’ve read the piece – including Romlie Mokak who was interested in its arguments and its suggested changes to the draft (though of course made no promises) – so I look forward to getting feedback from the Tropposphere!

The essay begins below the fold.

Humility is not a peculiar habit of self-effacement, rather like having an inaudible voice. It is selfless respect for reality and one of the most difficult and central of all virtues… Humility is a rare virtue and an unfashionable one… Only rarely does one meet somebody in whom it positively shines, in whom one apprehends with amazement the absence of the anxious avaricious tentacles of the self.
— Iris Murdoch

The divergence between the facts established by the intelligence services — sometimes by the decision makers themselves (as notably in the case of McNamara) and often available to the informed public — and the premises, theories, and hypotheses according to which decisions were finally made is total. And the extent of our failures and disasters throughout these years can be grasped only if one has the totality of this divergence firmly in mind.

— Hannah Arendt

I have a theory that the truth is never told during the nine-to-five hours.
— Hunter S. Thompson

1. Introduction

From 1788 till the 1960s, Europeans established themselves on Indigenous land in a brutal regime, first of dispossession and then of disregard. Yet some among them had strikingly good intentions. A year before Wilberforce took on the cause, nearly eighty years before the Emancipation Proclamation, Arthur Phillip accepted his commission insisting that slavery had no part in the new colony. Phillip sought to treat the Indigenous people fairly, at least according to his own lights. But mutual incomprehension reigned and those with murkier intentions soon prevailed.

Today, good intentions abound, though racism often lives on in unacknowledged assumptions. Governments outlay vast sums, whether adequate or not, on specific Indigenous programs and in general expenditure on Indigenous health, education and social security. Widely supported grand gestures are announced every few years. You might think “Closing the Gap” was Kevin Rudd’s idea but it rebooted (or is that rebranded?) a Hawke government initiative of twelve years earlier. But the results are meagre.

Now comes a new cycle of activity, this one focused on whether formal evaluation processes might allow us to identify and scale up those Indigenous programs that actually “work.” Most recently, the Productivity Commission has been hard at work on a national Indigenous Evaluation Strategy, which was the immediate trigger for this essay and to which I’ll return. Will this cycle of activity produce better results than earlier efforts? I’ll explain below why I have my doubts.

To first clarify where I’m coming from, it is not from deep knowledge of Indigenous policy. My focus here is rather on a prior question: how our formal institutions of government — and most particularly our bureaucracies — might need to change to succeed where previously they have so consistently failed. To make that question concrete I draw on my experience in other intractable areas of social policy that bear family resemblances to Indigenous policy.

Programs to protect children from abuse and neglect, particularly in disadvantaged families and communities, follow the same endlessly repeated cycle of failure followed by grand plans for reform that then run into the sand before the cycle begins again. This essay focuses on how little the system really appreciates the distance it would need to travel to really be effective, in terms of either its own values and objectives, or those of the disadvantaged communities — including Indigenous communities — it claims to be serving.

2. The “what” and the “how,” the saying and the doing

So here’s my very simple description of the problem: despite endless pronouncements of what we must do, there’s minimal comprehension of how to do it.

This is an endemic problem. Dependable know-how itself — whether it’s improving outcomes in an Indigenous community or representing government in the High Court — is not directly legible to government systems. Anyone can claim to have that know-how but a bureaucracy needs something more dependable than that. As a consequence, it will interact with know-how as a certified, decontextualised “what.” That “what” could be a credential, the meeting of a key performance indicator, or a particular bureaucrat’s informal reputation for being a “good operator” or a “safe pair of hands.” In improving Indigenous lives, however, know-how won’t align with any such things, not least because so much of it resides among Indigenous people and communities themselves. We need to access their knowledge and their agency to improve their own lives in ways that matter to them.

The cliché used to convey this idea is “putting people at the centre” or “putting people first.” However well-intentioned such slogans are, more often than not they operate as a kind of doublethink — as if adopting the slogan were to put its intent into practice.

The philosopher Martha Nussbaum offers a story that illustrates this difference between saying and doing. She describes how a development program encounters a woman in a traditional rural community who is uninterested in education for herself or her children. Nussbaum is showing how our (reductive) framing of the other’s perspective can cut us off from the wisdom of the other’s lifeworld. “Clearly,” she writes, “a one-shot logical argument” wouldn’t be enough to engage the woman:

[S]uch a procedure would only reinforce her conviction that education has nothing to do with her. Nor would the exchange get very far if the development workers sat down with her… asking… calm and intellectual questions about what she thinks and says. But suppose, instead, they spent a long time with her, sharing her way of life and entering into it. Suppose, during this time, they vividly set before her stories of ways in which the lives of women in other parts of the world have been transformed by education of various types — all the while eliciting, from careful listening over a long period of time, in an atmosphere of trust that they would need to work hard to develop, a rich sense of what she has experienced, whom she takes herself to be, what at a deeper level she believes about her own capacities and their actualization. If they did all this, and did it with the requisite sensitivity, imagination, responsiveness, and open-mindedness, they might over time discover that she does indeed experience some frustration and anger in connection with her limited role; and she might be able to recognise and to articulate wishes and aspirations for herself that she could not have articulated to Aristotle in the classroom. In short, through narrative, memory, and friendly conversation, a more complicated view of the good might begin to emerge.

Nussbaum’s scenario is based on actual fieldwork in Bangladesh, and couldn’t be cost-effective if it involved professionals engaging rural women en masse. But, as I discovered when I was chairing the Australian Centre for Social Innovation, the spirit of this translational endeavour is already captured in existing and cost-effective programs in Australia.

The centre’s Family by Family program takes families who feel they’re close to crisis. A trained coach then takes each family through a structured program of mentoring by another local family that has come through similar stresses. The family seeking help chooses the family that mentors them and sets the objectives they want to work on.

The program was co-designed with families over many months, but the simplicity and obviousness of the end result gave those involved in it and many lookers-on numerous “aha” moments. Family by Family embodies the rare art of professionals vacating centrestage in a therapeutic intervention to create space for those who must do the real work. Professional knowledge, which grows with the program, is always there — but as midwife, not obstetrician.

Talking to some of these families, I was struck by their visceral engagement with the program and their mentors. To take just one example — of which there were many — one mother in the program had received twenty-seven statutory “notifications” documenting outsiders’ suspicions that she was neglecting her kids. The relevant department was heading to court to take her four kids into guardianship. When her mentor family took her family camping, she learnt many things from them — not least to hug her kids. The department stopped proceedings against her.

The thirty-week program cost around $13,000. If that sounds expensive, it’s a fraction of what social workers would have cost, and much more effective. Moving all four kids into care would have cost around $224,000 per year. So, if Family by Family steered just this family from the shoals of state intervention it probably paid for its development and first couple of years of operation.

Before I saw Family by Family in action, I’d have described my outlook as that of a tragic liberal — committed to fairly generous spending on social disadvantage, but with very modest expectations of how much it could turn things around. After seeing Family by Family, the penny dropped. Ingrained patterns and social reinforcement are immensely powerful, almost immovable forces. But people’s desire to work towards better lives for themselves, their families and their communities is similarly elemental if they can somehow unlock their own agency and that of those around them.

3. Lord Acton’s fault line

After acknowledging the vast gulf between identifying the “what” and mastering the “how,” between the saying and the doing, we should . For decades I’ve referred to it in asides, but it needs to be brought centrestage so we can look it in the eye. It’s significant that it’s a joke, just as it’s significant that so many of the best insights into bureaucracy are provided by comedies like Yes MinisterThe Office and Utopia.

More than a century ago Lord Acton quipped that rowing was the perfect preparation for public life. Why? Because you face in one direction while moving in the other. One crucial reason that we’ve made so little progress is that in a thousand ways, large and small, the actors in the system face in one direction — with their mission statements, corporate values, strategic plans, evaluation strategies and all the rest of it — while moving in the other.

Of course, they’d prefer to do a good job — most people would. But when push comes to shove, their animating imperative isn’t to keep progress going in the field. It’s to keep up appearances. Seen this way, all those grand announcements we keep making are part of the problem. They’re really directed at our own anxieties. They alleviate and distract us from facing our disappointment — our discomfort — that the world remains so resiliently impervious to our good intentions.

Lord Acton’s fault line appears between the two feet on which we stand — between what we say and what we do. That’s why the words we use matter so much, and why we should take George Orwell’s advice to choose the simplest and clearest words we can. As he put it:

If you simplify your English, you are freed from the worst follies of orthodoxy. You cannot speak any of the necessary dialects, and when you make a stupid remark its stupidity will be obvious, even to yourself. Political language — and with variations, this is true of all political parties [and here we can include officialese]… is designed to make lies sound truthful… and to give an appearance of solidity to pure wind.

Since those in the system are the ones with the power, all we have to appeal to is their own self-respect — their own desire to feel better about themselves. When they say they want to change, the real question is how much. The system has said that it wants greater Indigenous agency in its programs for ages. But as I’ll illustrate, our programs are so dominated by that same system’s routines and perspectives that Indigenous agency barely gets a look-in. Instead it gets reduced to things that are legible to the system — such as Indigenous ethics codes and certified cultural sensitivity. These things may have some benefits. They may also have costs, which I’ll discuss. But they are mostly the system saying rather than doing.

This takes us to the nub of the problem. It is only humility, or some institutionalisation of it, that can create that space within which Indigenous agency might be nurtured and grow. But “humility” itself is now turning up as a cliché in all those “how to” guides (it appears just before “nuance” and after “authenticity” — yes, authenticity really was a corporate value of PwC for a while there). So I’ve tried to revivify it with Iris Murdoch’s magnificent words above. For the non-Indigenous among us who fancy we care, we must find ways to untangle ourselves and our institutions from the “the anxious avaricious tentacles of the self.”

4. Enter evaluation

Like a patient resisting therapy, the system constantly initiates new beginnings. But Lord Acton is never far away. At the political level leaders talk of evidence-based policy, but then shunt it aside when convenient. In fact, substantial performance evaluation was built into the structure of the Aboriginal and Torres Strait Islander Commission but sidelined after ATSIC was dismantled by John Howard’s government. The failure of the Northern Territory Intervention to take an evidence-based approach is legendary, worked up as it was over a few days in Canberra in the run-up to an election and yet largely maintained by the incoming government.

More recently, while stressing his own commitment to following the evidence, newly elected prime minister Malcolm Turnbull expanded income-management schemes without mentioning that the independent evaluations were highly equivocal. However well the idea played in non-Indigenous Australia, the evaluations suggested that compulsory income management has clear, positive impacts in very few cases and gives rise to “considerable feelings of disempowerment and unfairness.” As one might expect, voluntary income management is more successful.

Now, it is one thing for senior officials not to speak publicly of their political masters’ hypocrisy. But their complicity goes deeper. In 2009, a finance department review of Indigenous expenditure stressed the need for “a more rigorous approach to program evaluation at a whole of government level.” In 2016, the nation’s most senior public servant, the secretary of the Department of the Prime Minister and Cabinet, Martin Parkinson, echoed those sentiments. In response to such concerns, $40 million over four years was allocated for evaluation. Parkinson’s department was responsible for Indigenous affairs, but the Audit Office reported three years later that its performance was desultory.

As ANU researcher Michael Dillon has suggested, even the Audit Office’s report was “extraordinarily hedged and timid, and failed to make a substantive assessment of the actual independence of the evaluations undertaken” by the department:

Of thirty-five evaluations on the department’s 2018–19 workplan, fifteen had not commenced. Of the remaining twenty, eight had been published and twelve withheld from publication… In at least four cases (involving very significant and sensitive program evaluations) the department was waiting to brief the minister or awaiting his noting of a brief. In plain language, the minister was preventing timely publication of the evaluations.

Further, Dillon observed, Parkinson’s response to the audit “fails to acknowledge or address in any way the negative content of the audit.” Is it likely that the system will engineer something better if it can’t acknowledge its own failure to do as it says?

Which brings us back to the Productivity Commission’s Indigenous Evaluation Strategy, a draft of which was released in June. The PC has always attempted to pitch its proposals to government within the “Overton window” — that range of options that will be taken seriously by powerful people. Given that constraint, as I’ll explain, I respect its compromises on policy. But the point of the PC’s independence is that, however much it compromises on the policy, it spares no one, least of all itself, the truth. What the great scientist Richard Feynman wrote about science is also true of social science. For me, it’s a holy grail of social policy and aligns nicely with Orwell’s advice: “The first principle is that you must not fool yourself, and you are the easiest person to fool.”

5. Putting Indigenous people at the centre: the words

There’s a kind of ambiguity at the very heart of the PC’s draft strategy that’s increasingly common. It’s Orwellian in the bad sense. I guess the genre was introduced into polite society by the “vision statement.” Here one states an aspiration as a fact. You know the kind of thing: “PHP Residual Solutions is the world’s foremost residual solutions provider.” At least in its awkward baldness, it’s not misleading. We all know that global domination is an aspiration, not a fact.

But this fusion of fact and fancy appears as the fundamental building block of the PC’s draft strategy: “The Strategy puts Aboriginal and Torres Strait Islander people at its centre, and recognises that governments need to draw on the perspectives, priorities and knowledges of Aboriginal and Torres Strait Islander people if outcomes are to improve.”

One of the ways to ensure we remain fixed to the spot with Lord Acton’s fault line yawning beneath us is to encourage the idea that saying something is doing it. Does the PC know how to put Indigenous people at the centre of its strategy? Can it point us to better and worse examples of doing so? Can it highlight cautionary tales where grand claims have been made that are belied by the facts on the ground? These are some of the questions — pointed, uncomfortable questions — that we need to answer if we’re ever to step over Lord Acton’s fault line and enter the promised land of “how.”

At the level of programs, rather than evaluation, there are at least two perilous steps in the expedition to get from saying to doing — from signing the cheques to putting the resources of government properly at the disposal of Indigenous people and their communities:

  1. We need to learn how to put Indigenous people and communities at the centre of these programs — or, to put it differently, how to realise their agency within them.
  2. Then we need emerging successes to spread. That requires validated new knowledge of what’s working in the field — always fragile in large organisations to say nothing of systems of organisations — to trump the institutional imperatives that so often frustrate the spread of successful practice.

To me, these are the great priorities for the Indigenous-specific programs I have focused on in this essay, though analogous priorities would apply when considering the impact of general welfare programs on Indigenous people and communities. And any evaluative strategy would emerge from an appreciation of how evaluation might contribute to their wellbeing. As progress was made it would shed light on how further priorities might be set.

But the draft strategy makes clear that this is not the kind of priority-setting the PC has in mind. Its initial priorities reproduce those of COAG’s Closing the Gap report, and their foremost characteristic is their legibility to the system. They’re even arranged around the system’s existing organisational structure, which includes families, children and youth, health, education, economic development, housing, justice, land and waters. Makes you wonder what isn’t a priority! And all of them identify a “what” rather than a “how.”

6. Putting Indigenous people at the centre: the actions

How will we get Indigenous people and perspectives into the centre of evaluation? In their submission to the PC, researchers from Inala Wangarra and the University of Queensland argue that:

“Accountability” has become a lopsided concept, whereby the focus is overwhelmingly on service providers being accountable to government, and where there is no concomitant focus on the accountability of government to the most important stakeholders: Aboriginal and Torres Strait Islander peoples.

So might placing Indigenous people at the centre of an evaluation strategy involve making service providers and government policies accountable to Indigenous people? This possibility doesn’t seem to have made it into the PC’s strategy, even as a “what.” And even if it had, I’d argue that what the PC has endorsed is likely to be implemented in a way that actively obstructs getting to the “how.” The PC talks about the importance of “whole-of-government” approaches to evaluation. That sounds innocuous enough — commonsensical even. But why does it have me thinking of “whole-of-church” approaches to the solar system at the time of Galileo?

The only way I can imagine a whole-of-government agenda not doing more harm than good is if it were to imagine itself as being at the service of solving the concrete and urgent problems in the field — by identifying good practice in the field, for example, and coordinating the system to expand its influence.

Despite senior officials’ and politicians’ protestations that they aspire to encourage innovation in the field and spread and scale “what works,” progress has been conspicuously lacking. Peter Shergold saw this as a major problem as he rose through the ranks of the public service, but after over a decade at its commanding heights conceded there’d been little change. As he put it in 2005:

If there were a single cultural predilection in the Australian Public Service that I could change, it would be the unspoken belief of many that contributing to the development of government policy is a higher-order function — more prestigious, more influential, more exciting — than delivering results. Perhaps it is because I have spent so much of my career in line agencies, learning to deliver Indigenous, employment, small business, and education programs that I react so strongly against this tendency.

Eight years later he confessed that little more progress had been made:

Too much innovation remains at the margin of public administration. Opportunities are only half‐seized; new modes of service delivery begin and end their working lives as “demonstration projects” or “pilots,” and creative solutions become progressively undermined by risk aversion and a plethora of bureaucratic guidelines.

In its preoccupation with grander narratives than identifying what works and spreading it, the PC sets its evaluation process up to be driven by the system rather than its intended beneficiaries, however much it protests that they’re “at the centre.” In a familiar move, the PC suggests that its strategy is driven by four principles, each identified by a pleasing adjective with them all arranged in a pleasing diagram. According to this diagram, evaluation should be “Credible, Ethical, Transparent and Useful.” But these words are so general, so capaciously flaccid, that they constrain no one, like a scientific hypothesis that couldn’t possibly be falsified. And so, rather than constraining (and so guiding) practice, those words will come to mean whatever people want them to mean, often in retrospect to justify whatever practice is chosen.

Note two further aspects of the high-level pronouncements echoed by the Productivity Commission. First, the PC speaks of evaluation as if its function is to bolster the accountability of those in the field to their senior managers, with evaluation’s function being to objectively certify the extent to which the program meets the system’s stated objectives. Second, it shows little awareness of how broad and permissive this relatively new discipline of evaluation is. In reaching for some actionable means of validating that it is embracing a thing called “evidence-based policy,” evaluation is taken to be something far more settled and definitive than it is — as if getting something evaluated were like getting an auditor to check financial accounts or an engineer to check the structural integrity of a bridge.

As Michael Dillon has observed, the assumption that there are or should be simple linear relationships between objectives and performance is “problematic in cross-cultural contexts and certainly not necessarily the case in the… Indigenous domain.” In that regard the system — and the PC — seems oblivious even to the existence of “goal-free evaluation.” There, the evaluator investigates the impacts of the program without referring to — or ideally even knowing — a program’s stated goals.

In an increasingly managerial world oriented to the needs of organisations and their senior managers, this unconstrained focus deploys the evaluator’s skills in an open-minded way that can more fully reflect the interests and aspirations of other actors in the system — most particularly, intended beneficiaries of the program and the families and communities of which they are a part. Goal-free evaluation puts the evaluator in the best possible position to notice and document all consequences, both good and bad. It can also improve program hygiene just as double blindness adds to the hygiene of a randomised controlled trial.

7. The anatomy of Lord Acton’s work

Then there’s the question of exactly how, as we imagine it, evaluation will identify what is and is not working, and how these findings will find their way into improved policy and practice.

This raises several challenge at the heart of the PC’s draft strategy. First, evaluation should be independent so that it is candid. Second, it should be published, in order to help develop a “knowledge commons” around “what works” (and what doesn’t) and to strengthen incentives for policy, programs and practice to follow the evidence. Yet past behaviour shows that the system responds to such constraints by saying one thing and doing another. So why would it be any different here?

Indeed, the woods are full of regimes in which higher-order objectives are foisted on policymakers to do the Lord’s work (Lord Acton’s work that is). These systems allow those at the top to say one thing as they face towards an objective in general, while they do another thing that quietly prevents it happening in particular. And thus ensues a prosaic variant of something Oscar Wilde told us about life:

Yet each man kills the thing he loves…
The coward does it with a kiss,
The brave man with a sword!

Freedom of information regimes sit atop Lord Acton’s fault line. And the discomfort this induces is all too often relieved with strategic cowardice. Having been lowered from on high, freedom of information faces boldly towards transparency. At least in general and at least when it comes to the saying. When it comes to the particular, to what is actually done, officials travel in the other direction. Transgressions go off the record — into corridors, personal phones and email accounts — or are reclassified “cabinet in confidence” or some such. And that’s just the tip of the iceberg as far as actions that are routinely taken to delay and obfuscate transparency under FOI.

If FOI solves its problems the coward’s way, regulation reviews use the sword. Today, new regulation can’t be introduced without a “regulatory impact analysis” duly demonstrating that its benefits exceed its costs. Australia introduced it in 1986, and it seemed like such a good idea that it was replicated around the world — but invariably with the same (desultory) result. Here’s the British Chambers of Commerce back in 2007:

Both Conservative and Labour administrations approach deregulation with apparent enthusiasm, learn little or nothing from previous efforts and have little if anything to show from each initiative.

Sound familiar? Regulation review is another take on the Lord Acton quickstep. Those at the top introduce a compliance regime, but those administering it are trying to get things done for their ministers. So they obey the letter but not the spirit of the regime, and it degrades into empty box-ticking.

8. Getting past Lord Acton’s fault line

To recap: as attractive as they sound, independence and transparency cannot be imposed without setting off powerful and perverse incentives. Any attempt to deal with these dilemmas must look them in the eye. I foregrounded them in 2016 with my own proposal for an evaluation architecture. I called it the evaluator-general to stress the importance of independence and transparency, and also to structurally separate the delivery of services from the means by which we validate their fitness for purpose.

The organisation of the public sector already honours this principle of structural separation — between doing and validating the effects of what we’re doing. Thus, the Audit Office and the Bureau of Statistics are independent information and integrity agencies whose work helps inform us of the success or otherwise of other “doing” agencies directed by ministers — such as the health department and Treasury. At the same time, we expect all these agencies to collaborate — sometimes quite closely.

My proposal for an evaluator-general provides the institutional scaffolding within which the same close collaboration amid structural separation between doing and knowing can be brought right down to operations in the field. That way independence and buy-in can grow quietly from the bottom up within organisations rather than being heroically imposed from the top in a grand gesture that experience suggests will fail and fail again.

My aim was to nurture the self-accountability of those out in the field — Feynman’s imperative that one mustn’t fool oneself — and to build system accountability on that foundation. That’s how Toyota revolutionised manufacturing productivity in a way that’s now imitated the world over. It found a way to build from “how.” It did so by placing the workers on the line, the suppliers and the customers at the centre.

Are my ideas viable or just naive? We’ll only know when we give something like them a good try. We’d need no more than a dozen or so teams to try them. In the PC’s near 400-page background paper there’s some reporting on these problems of independence and transparency, but not in the context of any critical vision or clear explanation of how they can be overcome.

9. Independence-for-hire and the he-who-pays-the-piper problem

The PC’s incuriosity extends to its ignoring the incentive issues arising from how evaluation is commissioned and conducted. As I’ve argued, allowing firms in our private sector to appoint their own auditor profoundly compromises auditors’ independence. By contrast, the auditing of government finances is overseen by an independent auditor-general. Still, while it’s far from optimal, we’ve made the independence-for-hire of private sector auditors work tolerably by specifying highly prescriptive auditing standards. With evaluation, things are very different, there being any number of ways to conduct evaluations to serve numerous tastes and purposes. So evaluators’ independence-for-hire provides wide scope for doing Lord Acton’s work.

As I’ve argued elsewhere, independence-for-hire sits at the heart of a “now-you-see-it-now-you-don’t” catch 22 that prevents promising developments in the field even becoming visible to the system, let alone having their expansion supported by it.

It goes like this. Responding to all the stirring visions of government “scaling what works,” non-government organisations seek government funding to expand their most promising programs. At this point, departments of finance oppose such funding, as well they might, until the programs are independently evaluated. They don’t take responsibility by commissioning the evaluation themselves or even specifying what kind of evaluation they require. Thus, when the NGO returns, a few hundred thousand dollars poorer, with a Deloitte, PwC or Lateral Economics report in hand (we’re cheaper!), it’s ignored again because independence-for-hire isn’t independence. And so the process of “scaling what works” is stopped dead in its tracks.

Though it understands the value of independence in evaluation, the PC completely flubs the “independence-for-hire” problem, simply associating contracted-out evaluation with independence. And it won’t bite the bullet and recommend true independence because it knows this would be rejected out of hand. But to keep the idea of independence in play, it proposes Lord Acton’s independence — an independent Office of Indigenous Policy Evaluation that will “oversee” evaluation, though the actual evaluation will continue to be conducted within the very agencies whose performance is being evaluated.

No doubt the PC hopes that this might introduce some independence into the process. But progress, if any, will be agonisingly slow. Allowing agencies to do their own regulatory impact analysis has kept the tiger of regulation review pristinely toothless for thirty-five years now in every country where it’s been introduced. The old Office of Regulation Review operated within the PC itself, but the greater notional independence it had there made not the slightest bit of difference. The requisite boxes were ticked and regulations — both the good and the bad — went on piling up as normal.

10. Stated intentions and animating imperatives

It’s Lord Acton pretty much all the way down. The PC’s draft strategy stresses the need for evaluations to:

• be done ethically
• involve and engage Indigenous people
• be respectful of and in sympathy with Indigenous cultures and knowledges.

Now, each of these is a commendable objective as a “what.” As I keep saying, the hard part is working out the “how.” And tackling each of these matters productively requires great insight. Further (and astonishingly), the importance of each of these requirements is relatively new to the system even as a “what.” Should we really put that same system in charge of learning the “how”? What will happen is already a foregone conclusion — the PC more or less recommends it. Rather than proceed humbly, foregrounding its ignorance, the system will go through its well-worn routines. Codes of practice will be developed. I assume there’ll be lots of consultation.

But these codes won’t deliver what is written on the packet any more than the mission statement “putting families at the centre” would have delivered Family by Family. However well-intentioned, these codes’ animating intent — what will matter when push comes to shove and someone might end up on the telly or in a headline — will be the institutional safety of those developing and administering the codes.

This is what happens when the system’s commanding heights are put in charge of delivering something that is difficult and context-sensitive but not highly valued in our political culture. Those defending Indigenous interests would be well advised to look on the burgeoning performance regimes in numerous sectors — particularly education and university research — where more and more practitioner time is taken up complying with relentlessly expanding requirements from bureaucracies that have neither the slightest knowledge of nor regard for what’s going on out in the field. As the accountability theatre ramps up, administrative numbers and salaries swell at the centre and performance declines. As Britain’s Institute for Government documented in a different context, inquiries and restructurings abound and new ten-year plans are announced once every three or four years.

I recall when, in response to another paedophilia scandal, South Australia strengthened its child safety requirements. The very department whose lapses had produced the outrage refused to stagger the starting date of the new system for different community organisations. With the department’s processing capacity thus overwhelmed, it took over a month to clear the new paperwork. Family by Family was paralysed. If exceptions were allowed to the deadline, they were for more important folks than us. Overnight, practices that had worked brilliantly and safely for several years — that placed families at the centre of the program — became an offence. I don’t know about then, but today the department describes itself as “a customer-focused organisation that puts people first.”

In fact, an evaluation was done on Family by Family. The process was a train wreck. From memory numerous preliminary ethics processes took around nine months, though this was simply to ask families questions about their progress — as they’d been asked regularly within the program. The evaluation ignored the program’s effect on children. Why? Because getting that aspect through the ethics procedures would have been too expensive, uncertain and time-consuming. How ethical can you get?

When the evaluation finally began, the department funding the program wouldn’t give evaluators the data to identify our cohort of families. So the evaluation was forced to compare impacts on all families in the host suburb against two other areas (one of which was bizarrely incomparable). As I recall, the result was mildly positive but inconsequential — unsurprisingly, given the small number of families involved. To use J.K. Galbraith’s term, it was all “innocent fraud” — that is, all that effort and money produced an outcome that amounted to nothing. But its worthlessness was a system failure despite the best of intentions of everyone in it.

I expect that the National Health and Medical Research Council, which issued the ethics guidelines, the family services department and the university centre for family studies thought of themselves as putting people first. But far from nurturing the innovation breaking out on the edges of the system — driven by bright, idealistic, young professionals and increasingly enthusiastic families — the incumbent organisations imposed their own routines and imperatives, each one making the labyrinth denser, more bewildering, more dysfunctional, each one making it harder to put the families first.

Whether or not the evaluation report was released (I don’t believe it was), we all cooperated in covering up its worthlessness, which required nothing more than not to advertise it. This is just one close-up of a phenomenon the disillusioned development economist William Easterly has called “the cartel of good intentions.” It is built on Lord Acton’s fault line. But you won’t see any serious engagement with any of this in the PC’s material on Indigenous evaluation.

11. The perils and the promise of candour

You may think what I’ve written so far is scathing. Yet, as I indicated above, I think the PC makes the right basic calls in its draft strategy. Bereft as the report is of suggestions about how to bring it about, it nevertheless endorses more Indigenous involvement in evaluation. And it backs independence and transparency. In a system that’s nowhere near ready to seriously engage with such things, it also makes defensible compromises in shepherding those values into policy. The real shame is that the pathologies of the existing system are deeply entrenched and yet they hardly get a look-in in the commission’s analysis. So any strategy for shifting them requires something much more hard-headed — more problem-focused — than four pleasing adjectives and a well-intentioned tagline about putting Indigenous perspectives at its centre.

Here we get to Orwell’s point. The greatest service the PC could do Indigenous people — the way it could really put their interests at the centre of its concerns — would be to express itself simply and candidly. Its draft strategy asserts that program participants and the broader community should “have confidence that policies and programs are being assessed objectively and independently.” Poppycock. It should stop pretending and fess up on behalf of the system. Having recommended a highly compromised form of independence for now, it should explain that the system isn’t ready for much candour right now and explain why.

Now you can see the power of Orwell’s advice about speaking simply. Speaking simply makes it hard, excruciating even, for you to cover your tracks — to mask your motives — with the usual sophistry. Once the officialese is jettisoned (or should that be official-ease?) the discomfort that the system is defending itself against becomes its own discomfort in explaining the sorry situation it is dealing with. And the only way to relieve that discomfort would be to go further and sketch out a longer-term plan to reach the outcome described in the honeyed words.

12. Towards the final strategy

For the final strategy to deliver a minimum viable product, I think it needs changes to the draft.

First, it should base its policy compromise on a much harder-headed understanding of the obstacles that stand between us and the land of “how.” After explaining why the whole system can’t possibly embrace real independence and transparency at the moment, it should go on to sketch its own vision of how that might be grown from the bottom up. I’ve shown one possible model with my proposal for an evaluator-general, which involves structural separation between the system’s doing on the one hand and its knowing and evaluating on the other. It needn’t be grandiose and system-wide: it can be built on a small scale and grown from there. Some submissions to the PC seem to think it has merit. The PC itself gives the idea considerable elaboration, but only as reportage. If it has a better model it should set it out.

Second, if the strategy is its contribution to thought, its direct contribution to action should be to call for and begin the process of designing a new burst of energy and innovation that might grow at the margins of current activity and begin to spread through the system.

Here, the current weakness of the system lies not so much in the lack of promising experiments in the field as in the relationship between them and the system itself. The system must be able to identify, validate and acknowledge the best of those experiments. Currently, it can’t do that. Evaluation can play some role in fixing that, though we should guard against something that’s already clearly in evidence — the system grabbing hold of evaluation as a deus ex machinait’s next fad diet that will save it from itself.

And there are two far graver obstacles to progress. First, as those in the field can attest, our politicians frequently play to their own political advantage irrespective of the evidence. Second, bureaucracies have terrible trouble responding to knowledge of what’s working from the field, for such bottom-up learning is countercultural in a hierarchy where power is at the top. Further, if learning were to rise from the bottom at any scale, it would involve the discomfort and uncertainty of change for large numbers of people.

The PC can do little about the first of these more serious problems. But it can hope to be influential regarding the second. I think it’s possible to be very concrete and specific about what is necessary here. The system can only sustainably expand what works by bolstering the status of the individuals and communities who have made it work and giving them much more authority and resources within that system.

Those at the centre of the system are just as important as the successes in the field, but there’s nothing unique about them — or there shouldn’t be if the system is working properly. Those in the system need to be made accountable not just for talking about expanding what works but for making sure it happens, despite the discomfort it will undoubtedly cause. To that end, a regular report could be recommended, by the auditor-general or some other independent guardian of integrity in the system, to document, say every two years, what progress was being made towards this goal of spreading “what works” and particularly the increasing empowerment of those who make it work.

For those of us who call ourselves Australians to properly begin the task that governor Arthur Phillip began with such high ideals and so little to show for it, we can only do it to the extent that non-Indigenous people and their institutions unloose themselves from those “anxious avaricious tentacles of the self.” To the extent we falter, the soft voice of conscience will keep whispering that destiny to us. •

This essay benefited from helpful comments on earlier drafts from Romlie Mokak, Keryn Hassall, Janina Gawler, Michael Griffith, Jon Altman, Mike Dillon, Christos Tsiolkas and Clive Kanes. As always, I am wholly responsible for the essay’s remaining inadequacies. The title “Orwell that ends well” is shamelessly stolen from my friend Konstantin Kisin.

Debt Relief and the CARES Act: Which Borrowers Benefit the Most?

Published by Anonymous (not verified) on Tue, 18/08/2020 - 9:00pm in

Rajashri Chakrabarti, Andrew Haughwout, Donghoon Lee, William Nober, Joelle Scally, and Wilbert van der Klaauw

 Which Borrowers Benefit the Most?

COVID-19 and associated social distancing measures have had major labor market ramifications, with massive job losses and furloughs. Millions of people have filed jobless claims since mid-March—6.9 million in the week of March 28 alone. These developments will surely lead to financial hardship for millions of Americans, especially those who hold outstanding debts while facing diminishing or disappearing wages. The CARES Act, passed by Congress on April 2, 2020, provided $2.2 trillion in disaster relief to combat the economic impacts of COVID-19. Among other measures, it included mortgage and student debt relief measures to alleviate the cash flow problems of borrowers. In this post, we examine who could benefit most (and by how much) from various debt relief provisions under the CARES Act.

Data and Definitions

In addition to direct stimulus to individuals and corporations, the CARES Act provides for debt forbearance (that is, a temporary break from debt service payments) for various types of loans. FHA- and GSE-backed mortgages are eligible for a 180-day forbearance period, which can be extended to 360 days, but the borrower needs to contact the mortgage servicer to request forbearance. There was also a moratorium on foreclosure for 60 days after March 18. Federal student debt borrowers can defer payments until September 30, with interest waived. This forbearance is administrative and does not have to be negotiated. The Act also suspends involuntary collections, which includes wage garnishment and the reduction of tax refunds or other federal benefits, for qualifying federal student debt borrowers who are in default. While private student debt makes up a small share (approximately 8 percent) of total outstanding student debt, our data do not enable us to differentiate between federal and private student debt. The small subset of the student debt borrowers who have only private student loans will not be eligible for CARES Act forbearance relief. For simplicity, we will consider all student debt borrowers as being eligible for student debt forbearance in this post.

To understand who may benefit (and by how much) from the mortgage and student debt relief proposed, we draw on the New York Fed’s Consumer Credit Panel—an anonymized, nationally representative sample of Equifax credit report data. Our data set for this post covers a representative 1 percent sample of the nation’s adults with credit records, showing payments, balances, and delinquencies for various types of debt, including student loans, mortgages, auto loans, and credit cards. We focus on mortgage and student debt in this post because the relief under the CARES Act pertained to these two kinds of consumer debt.

To understand who the potential beneficiaries of debt relief are, we examine differences in forbearance relief across income, age and racial lines. Specifically, we split zip codes into equal-population quartiles of median household income (pre-tax); we refer to the bottom quartile as “low income,” (with median income below $46,310) the two middle quartiles as “middle income,” and the top quartile as “high income” (with median income above $78,303). We also look at zip codes that are “majority Black,” “majority Hispanic,” “majority white,” and “mixed.” We define majority Black zip codes (neighborhoods) as those in which Black residents make up at least 50 percent of the population, and define majority Hispanic and majority white zip codes (neighborhoods) similarly. We group all other neighborhoods together into a fourth category, “mixed” neighborhoods. For all income and race data, we use the 2014-18 Five-Year American Community Survey. We investigate the extent of mortgage and student debt relief faced by each of these neighborhoods: low income, middle income, high income, majority Black, majority Hispanic, majority white, and mixed.

At the end of December 2019, the majority of borrowers (63 percent) in our sample have neither mortgage nor student debt, but 21 percent have a mortgage but no student debt and 12 percent have student debt but no mortgage. Only 4 percent of adults have both mortgage and student debt. The median student debt borrower is 34 years old while the median age of mortgagors is 51. Thus, while the student debt relief will potentially benefit younger borrowers, the mortgage relief will potentially benefit relatively older borrowers.

Who Can Benefit from CARES Act Debt Relief?

Borrowers who have student debt or mortgage debt (and hence may qualify for CARES Act debt moratoria) fall into three groups: those with student debt but no mortgage, those with mortgage but no student debt, and those with both types of debt. In the table below, we investigate what share of the adult (above 18) population in each type of neighborhood has student debt but no mortgage (column 1), mortgage but no student debt (column 2), and both mortgage and student debt (column 3), and hence will potentially be eligible for corresponding student debt and/or mortgage debt relief. Differentiating across neighborhoods by income, we find in column 1 that similar shares of the adult population will potentially be eligible for assistance from only the student debt relief provisions of the CARES Act across the three neighborhoods (18 percent), but a markedly higher share (more than double) can be eligible for mortgage relief in the high income neighborhoods relative to low income neighborhoods (column 2). The share of the adult population that may benefit from only mortgage relief is also considerably larger in middle income neighborhoods (1.6 times) than in low income neighborhoods. Column 3 reveals that the share of adult population respectively in high and middle income neighborhoods that can benefit from both the CARES Act mortgage and student debt relief is double the corresponding share in low income neighborhoods.

Differentiating by race, column 1 shows that a significantly larger share (20 percent) of the adult population in majority Black neighborhoods can be eligible for assistance from only the student debt relief provisions of the CARES Act compared to such shares in the majority Hispanic, majority white, and mixed neighborhoods. In contrast, columns 2 and 3 find that a substantially larger share in majority white neighborhoods will be potentially eligible for only mortgage relief or both mortgage and student debt relief compared to the shares in majority Black, majority Hispanic, and mixed neighborhoods.

 Which Borrowers Benefit the Most?

Is There Heterogeneity in the Expected Benefit from the CARES Act Student Debt Forbearance?

To further understand who may benefit and the extent of the potential cash flow assistance (driven by funds released by deferral of payments), we look at a neighborhood type in the table below and examine what share of the adult population in that neighborhood will be eligible for any student debt assistance and how much assistance they may receive based on their debt profile at the end of 2019. Differentiating by income, we find in the first column that a slightly higher share of the adult population in high and middle income neighborhoods can benefit from student debt relief than in the low income neighborhood. Unlike column 1 of the first table in this post, this column accounts for any student debt relief, regardless of whether the borrower holds both mortgage and student debt or holds student debt but no mortgage debt. The higher shares in this table (in contrast to the earlier table) are driven by increased incidence of borrowers who hold both student and mortgage debt in the high and middle income neighborhoods.

 Which Borrowers Benefit the Most?

Turning to the amount of potential forbearance, we find that the median scheduled monthly payments per borrower (those eligible for forbearance) in low income neighborhoods are markedly smaller than those in high income neighborhoods; at least half of the student loan borrowers in low income neighborhoods had a scheduled payment of zero before the onset of the pandemic. These may be due to a number of factors: smaller loan sizes in these neighborhoods, larger incidence of in-school deferment, or higher participation in income-driven repayment programs in these neighborhoods. In column 4, we find that the mean scheduled payment per adult (and hence the potential assistance per adult) in high income neighborhoods is more than double that in low income neighborhoods. Annualizing the payments and comparing mean scheduled payment to the median household income of the zip code the person lives in, we find that the relief is actually a higher share of median income in these low income neighborhoods, despite the smaller forbearance amount (column 5).

By race, we continue to find that majority Black zip codes have markedly higher concentrations of student debt borrowers relative to the other neighborhoods. 23 percent of the adult population of majority Black neighborhoods is eligible for student debt relief versus 14 percent in majority Hispanic and 17 percent in majority white and mixed neighborhoods. However, as in the case of low income neighborhoods, more than 50 percent of borrowers in majority Black zip codes have no regular monthly scheduled payment, and thus would not benefit from forbearance. We find in column 3 that the mean scheduled payment per borrower is higher in majority white neighborhoods and significantly lower in majority Black and majority Hispanic neighborhoods. In column 4, we find that the mean scheduled payment per adult is broadly similar across majority white, majority Black and mixed neighborhoods, while it is perceptibly lower in Hispanic neighborhoods. The difference in patterns between columns 3 and 4 is driven by the fact that majority white neighborhoods are considerably more populous than majority Black neighborhoods (column 4 of the first table in this post). Interestingly, we once again find in the last column that the potential forbearance amount will constitute a higher share of median household income in majority Black neighborhoods than in other neighborhoods. In summary, we find that larger shares of borrowers from majority Black neighborhoods can benefit from the student debt relief provision, although the expected per-borrower relief to these communities is smaller. Regardless, this relief will address a higher debt burden (as share of income) in these neighborhoods.

Understanding Heterogeneity in the CARES Act Mortgage Debt Forbearance Relief

We can repeat this analysis for mortgage debt. Remember, not all mortgages are FHA or GSE-backed and hence eligible for forbearance. The table below shows that the highest concentrations are in majority white and higher-income zip codes, as qualifying for a mortgage requires a relatively high credit score and steady stream of income. Mortgagors in high income zip codes also pay much more per month than those in other areas, indicating higher home value and mortgage balance on average. We find from column 3 that the monthly scheduled payment of mortgagors (and hence the potential forbearance amount per mortgagor) is higher for those from high income, mixed, and majority white neighborhoods, and smallest for those from low income and majority Black neighborhoods. Looking at mean scheduled payment per adult in the various neighborhoods, the indicator of average per-capita forbearance dollars to a neighborhood, once again we find that high income, majority white, and mixed neighborhoods can expect higher mortgage forbearance relief, while this relief is lowest for low income, majority Black, and majority Hispanic neighborhoods (column 4). Nevertheless, turning to the mean payment as a share of median income in the neighborhood, we find that this relief amount again constitutes higher relative debt burdens in low income, majority Black, and majority Hispanic neighborhoods, largely because of lower median income in these neighborhoods.

 Which Borrowers Benefit the Most?

To summarize, we have investigated who may benefit (and the expected forbearance amounts) from the various debt relief provisions in the CARES Act. We find that while student debt relief may be expected to reach a larger share of borrowers in majority Black neighborhoods, the dollar value of expected student debt relief per borrower will be perceptibly less in low income, majority Black, and majority Hispanic neighborhoods. Unlike student debt relief, mortgage relief may be concentrated in high income and majority white neighborhoods, both in terms of dollar amounts and share of borrowers that will be potentially assisted. It is worth emphasizing that in this post we have outlined who may benefit from the mortgage and student debt relief provisions of the CARES Act. In other words, we have focused on the supply of this relief to different neighborhoods. Who will actually benefit and the amount of relief obtained will be determined by a combination of supply and demand factors. Since, low income and majority minority neighborhoods have been affected more negatively by this pandemic, residents in these neighborhoods may have the highest take-up rate. Moreover, mortgage benefits are not automatic; mortgagors must actively seek out these benefits by contacting servicers and proving financial hardship. Thus, ultimately, who actually benefits and by how much will be determined by a combination of factors, a topic we will continue to study. This post starts the conversation by investigating the potential beneficiaries and the potential reach (in dollar terms) of the forbearance programs.

Rajashri Chakrabarti

Rajashri Chakrabarti is a senior economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

Andrew Haughwout

Andrew F. Haughwout is a senior vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Donghoon Lee

Donghoon Lee is an officer in the Bank’s Research and Statistics Group.

Joelle Scally

Joelle Scally is a senior data strategist in the Bank's Research and Statistics Group.

Wilbert van der Klaauw

Wilbert van der Klaauw is a senior vice president in the Bank’s Research and Statistics Group.

How to cite this post:

Rajashri Chakrabarti, Andrew Haughwout, Donghoon Lee, William Nober, Joelle Scally, and Wilbert van der Klaauw. “Debt Relief and the CARES Act: Which Borrowers Benefit the Most?" August 18, 2020,

Additional heterogeneity posts on Liberty Street Economics:

Heterogeneity: A Multi-Part Research Series


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

The language of rules: textual complexity in banking reforms

Published by Anonymous (not verified) on Thu, 13/08/2020 - 6:00pm in


reform, Regulation

Zahid Amadxarif, James Brookes, Nicola Garbarino, Rajan Patel and Eryk Walczak The banking reforms that followed the financial crisis of 2007-08 led to an increase in UK banking regulation from almost 400,000 to over 720,000 words. Did the increase in the length of regulation lead to an increase in complexity? Tightening rules to reduce risks, … Continue reading The language of rules: textual complexity in banking reforms →

Antitrust Hearings Delayed as Tech Giants Push Ahead with Ruthless Market Dominance

Published by Anonymous (not verified) on Wed, 29/07/2020 - 12:45am in

The much-anticipated antitrust hearing originally scheduled for Monday, July 27 has been moved to Wednesday for the ostensible purpose of allowing members of Congress to pay their respects to recently deceased Rep. John Lewis.

The hearing, which is to feature the testimony of big tech CEOs Tim Cook, Mark Zuckerberg, Jeff Bezos, and Sundar Pichai is supposed to wrap things up for the House Judiciary Committee’s year-long investigation into “anti-competitive behavior in the tech sector.” The Committee is supposed to release its findings later this summer or in the fall, on the eve of the presidential elections.

Much has been made about the “major concession” or “breakthrough negotiations” regarding the mere presence of these high-powered chief executives at the hearing, which underscores the very problem facing the country and the world over the excessive influence these corporations wield over our lives. Whether the robber barons of our time will be physically present or simply chime in via a Zoom video chat has yet to be determined. Perhaps they’ll each make use of their own proprietary video-conferencing apps to attend remotely.

The Committee’s investigation has been called the “most sweeping congressional probe to date,” though that is not saying much considering the complete lack of regulatory oversight of these mammoth companies, who have been allowed to operate virtually unfettered over the last 20 years.

Apple, Google, Facebook, and Amazon are said to be in the crosshairs of the Congressional investigation, but even the communications between the company CEOs and lawmakers about their testimony before the Committee reveal the true pecking order. Jeff Bezos, for instance, responded to the Senate’s request by conditioning his presence: “Of course,” the letter addressed to the Committee stated, “we will need to resolve a number of questions regarding timing, format, and outstanding document production issues, all necessarily framed by the extraordinary demands of the global pandemic.”

Other CEOs, like Tim Cook, responded with similar caveats to the provision of documents and other evidentiary material requested by the Congressional body. A letter from Apple’s attorney called the Committee’s demands “highly unusual and burdensome” and expressed doubts that its corporate secrets and “other competitively sensitive information would be withheld from its many competitors,” essentially accusing the government of preemptive corporate spying.


Unfair practices

Just one week ago, in the span of 24 hours, Jeff Bezos increased his net worth by $13 billion dollars. The obscenity of such an immense jump in wealth underscores the growing disparity between the uber-rich and regular people, who are in the midst of an ongoing economic catastrophe and millions of whom are facing the prospect of losing their homes in the coming months as federal government handouts run out.

Meanwhile, the tech giants are using every dirty trick at their disposal to increase their riches and power to a level seen only in the days of John D. Rockefeller… or Caligula. Their ability to manipulate markets and near-total control over modern-day communications makes their power virtually unassailable.

Examples of the types of activities Congress will have to curtail abound. Amazon, for example, used its own venture capital firm to attract startups who shared details about their products and services only to see Amazon launch their own versions. The $200 million Alexa Fund would purchase stakes in companies like Nucleus – which made a video communication device for the home – to gain access to the startup’s plans. Eight months after their “investment” in Nucleus, Amazon would launch the “Echo Show,” which directly competed with Nucleus’ product.

This is a pattern Amazon has been shown to engage in with regularity, but it is not alone among the tech giants. Facebook also has a history of doing the exact same thing, while Apple has exploited its mobile application monopoly through its “iOS App Store,” which erects high bars of entry for third-party developers through onerous fees and rules described by some developers as a “Kafka-esque nightmare.” Meanwhile, Apple puts no such barriers in the way of its own apps.


More than economics

The problem doesn’t end at unfair market practices, however, since the power these companies now wield by virtue of the wholesale transformation of society and economy into a digital environment, means these giant corporations have a stake in practically every human activity as defined in the 21st century.

The race to “connectivity” has placed the Apples and the Googles of the world in a position of near-limitless power, which – on certain levels – far exceeds the judicial mechanisms that exist to curtail it. “When you connect all of society, you connect all of society’s problems as well,” says tech research scientist, Benedict Evans.

In a recent article about tech regulation, Evans points out that the tech industry embodies all the complexities that were present in previous regulatory battles against large industries, such as banking or the airline industry. But, not only do tech companies present a far larger sample of complexity, the timeframe in which we, as a society, must deal with the implications of this reality is immeasurably more compressed. Evans quotes an old colleague who “liked to say that software is eating the world.” He agrees that, in fact, it did eat the world. But, also reminds us that regulation can only go so far in reigning in these new monopolies because they cannot ultimately solve the enormous social issues that their unrestrained existence up to this point has already caused.

Feature photo | This combination of 2019-2020 photos shows Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg, July 29, 2020, the four Big Tech leaders facing antitrust hearings in front of Congress by the House Judiciary subcommittee on antitrust. Pablo Martinez Monsivais | Evan Vucci, Jeff Chiu | Jens Meyer | AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post Antitrust Hearings Delayed as Tech Giants Push Ahead with Ruthless Market Dominance appeared first on MintPress News.

Trump’s Pal Just Used John Roberts’ Get-Out-Of-Jail Free Card

Published by Anonymous (not verified) on Sat, 18/07/2020 - 6:54am in

One of the Supreme Court’s least-noticed rulings in the past few months just helped the one of the planet’s biggest financial firms — and one of Donald Trump’s billionaire pals — stomp on thousands of public-sector workers and retirees in one of America’s poorest states. Continue reading

The post Trump’s Pal Just Used John Roberts’ Get-Out-Of-Jail Free Card appeared first on

Leverage Ratio Arbitrage All Over Again

Published by Anonymous (not verified) on Tue, 30/06/2020 - 9:00pm in

Donald P. Morgan, Dong Beom Choi, and Michael R. Holcomb

Leverage limits as a form of capital regulation have a well-known, potential bug: If banks can’t lever returns as desired, they can boost returns on equity by shifting toward riskier, higher yielding assets. That reach for yield is the leverage rule “arbitrage.” But would banks do that? In a previous post, we discussed evidence from our working paper that banks did do just that in response to the new leverage rule that took effect in 2018. This post discusses new findings in our revised paper on when and how banks arbitraged.

When They Arbitraged

The new leverage rule, like other post-crisis reforms, had a long gestation period:

Leverage Ratio Arbitrage All Over Again

U.S. regulators first proposed the supplementary leverage ratio (SLR) rule in January 2012. The motivation for the rule was to have a simple, unweighted capital requirement as backup in case the risk-weighted requirement did not capture true asset risk at the very large banks using internal, model-based risk estimates. Several years of refinement followed, particularly concerning which assets would count in the denominator of the SLR (“total leverage exposure”). Banks argued for excluding certain “safe” assets, which would tend to make the leverage ratio less binding. The denominator was finalized in September 2014 and the leverage rule wound up as the more binding requirement for most covered banks. Banks were required to disclose their SLR to investors in 2015, but had until January 2018, six years to the month after the rule was first proposed, to comply—in other words, to bring their leverage capital ratios to the required minimum.

If banks intended to arbitrage the new rule by shifting toward riskier assets, when along that time line would one expect them to do so? Our original paper focused on the third quarter of 2014, when the SLR denominator was finalized, on the grounds that only then did banks know how binding the rule would be. While we found evidence of risk shifting starting then, our data ended before the compliance date in 2018. Did we miss part of the story?

Evidently not. We extend the sample in our revised paper but find no additional risk shifting after the compliance date. To illustrate, the chart below plots the mean ratio of risk-weighted securities to total securities at the fifteen banks covered by the SLR and a control group comprising the eighteen next largest banks (with assets between $50 and $250 billion). The control banks are similarly regulated, save for the new leverage rule. The SLR banks increased their risk-weighted securities ratio—indicating riskier holdings—just as the SLR denominator was finalized in 2014 (the light gray vertical line), but there was no additional risk shifting when it took effect in 2018 (the dark gray vertical line). While it might be surprising that banks did not postpone any shift until absolutely necessary, we show that among SLR banks, those most constrained by the rule began increasing their leverage ratios around the disclosure date in 2015. The timing of this “forced” deleveraging, rather than the official compliance date, may have determined when to reach for yield. More generally, this finding illustrates the perils of identifying regulatory effects when the regulations under study have such long gestation periods and ambiguous “treatment” dates; had we naively compared before and after the compliance date, we might have rejected the arbitrage hypothesis.

Risk Shifting Evident After SLR Denominator Is Finalized but Not at Compliance Date

How They Arbitraged

While we find evidence of reach for yield via securities, we find no evidence of a shift toward riskier loans (see chart below). The ratio of risk‑weighted loans to total loans was essentially flat and parallel for SLR banks and control banks. That’s potentially surprising since loans are banks’ signature assets. While it might be that the risk shifting is simply not detectable in risk-weighted loans, we look at alternative credit risk measures (provisions and nonperforming loans) in our revised paper and find no evidence of a differential change in either. While evidence may yet be found, we conclude that effecting a discrete increase in risk might be cheaper and more predictable via the securities books than by forging new loan relationships.

Leverage Ratio Arbitrage All Over Again


The main takeaway in our revised paper is unchanged: Banks can be expected to arbitrage simple leverage rules by shifting toward riskier, higher yielding assets. Our revised paper shows that arbitrage was effected well before the compliance date for the new leverage rule, and not in the loan book, where one might most have expected it.

Related Reading

Choi, D. B., Holcomb, M. R., and Morgan, D. P. “Bank Leverage Limits and Regulatory Arbitrage: Old Question, New Evidence.” Federal Reserve Bank of New York Staff Reports, no. 856, revised December 2019.

Choi, D. B., Holcomb, M. R., and Morgan, D. P. “Leverage Rule Arbitrage.” Federal Reserve Bank of New York Liberty Street Economics, October 12, 2018.

<br />
Donald P. Morgan

Donald P. Morgan is an assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Dong Beom Choi is an assistant professor of finance at Seoul National University. He previously was an economist in the Bank’s Research and Statistics Group.

Michael R. Holcomb is a Ph.D. student at Harvard’s Kennedy School of Government. He previously was a senior research analyst in the Bank’s Research and Statistics Group.

How to cite this post:

Donald P. Morgan, Dong Beom Choi, and Michael R. Holcomb, “Leverage Ratio Arbitrage All Over Again,” Federal Reserve Bank of New York Liberty Street Economics, June 30, 2020,


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Insider Networks

Published by Anonymous (not verified) on Thu, 25/06/2020 - 9:00pm in

Selman Erol and Michael Lee

Insider Networks

Modern-day financial systems are highly complex, with billions of exchanges in information, assets, and funds between individuals and institutions. Though daunting to operationalize, regulating these transmissions may be desirable in some instances. For example, securities regulators aim to protect investors by tracking and punishing
insider trading.

Recent evidence shows that insiders have formed

sophisticated networks
that enable them to pursue activities outside the purview of regulatory oversight. In understanding the cat-and-mouse game between regulators and insiders, a key consideration is the networks that insiders might form in order to circumvent regulation, and how regulators might cope with insiders’ tactics. In this post, we introduce a
theoretical framework that considers network formation in response to regulation and review the key insights.

A Model of Insider Networks

In our model, agents benefit from successfully transmitting a good to others who can utilize it. The good can be a package, a vital piece of information, or even money. To make things concrete, suppose the good is insider information regarding a public company. Agents can form links with each other that allow them to transmit information. Importantly, transfers need not be direct. An insider can transmit the information indirectly through anyone in his network as long as there is a path connected to his co-conspirator. The figure below illustrates how, given a network, a sender can transmit to a receiver along two different paths.

alternative transmission paths between send and receiver

The regulator’s goal is to detect and punish anyone in the network from trading on insider information, as allowing such could ultimately harm market fairness and efficiency. If the regulator could observe and process all transmissions, then he or she could more easily detect insider trading. But observing all trades involves loss of social liberties and privacy, as well as cost for gathering and analyzing large numbers of transmissions.

More realistically, the regulator may know the set of potential insiders, and separately monitor financial markets for that set’s unusual or suspicious trading activity. Knowing the identities of insiders and monitoring market activity is not, however, enough to successfully prosecute wrongdoers. In order to punish violations, the regulator must be able to uncover direct evidence that an individual suspected of insider trading did in fact obtain nonpublic information from another insider. That is, the regulator must be able to map the path of transmission between the sender and the receiver of insider information in order to prosecute the guilty parties. Yet the greater the network distance between the alleged perpetrator and an insider, the costlier it is to identify the link between the two.

The Virtue of Regulatory Ambiguity

Suppose that an insider, call him Isaac, gained insider information, such as news of his firm’s impending merger with an industry competitor. By trading on this information ahead of markets, Isaac could turn a handsome profit. But trading directly is risky. The regulator, who monitors trading activity and knows that Isaac is an insider, would immediately take note. Since it is not hard to verify that Isaac has access to such information, the regulator could swiftly punish Isaac for violating insider trading regulations.

Suppose that the regulator enacts a policy to only take enforcement actions on trading activity by insiders. Isaac could in response relay this information to someone else who takes advantage of it. For instance, he could inform a friend, family member, or business partner who could trade on his behalf, and share the profits. This approach would insulate him and his co-conspirator from prosecution.

But knowing that Isaac is likely to share insider information with his close familiars, what should the regulator do? By expanding the scope of enforcement to include insiders’ friends, family members, and business partners, the regulator can successfully go after Isaac and other insiders who attempt similar schemes. Though expanding the scope is expensive, the regulator would be in a better position to catch all violations.

Can the regulator declare victory? Unfortunately not. Isaac, expecting the regulator to pursue enforcement based on trading activity by his close familiars, can take one step further. By relaying the information down an additional link, such as to an acquaintance of a friend, Isaac can, at a cost of diluting profits, avoid a regulator that only examines close ties. Of course, this likelihood would compel the regulator to increase the scope of enforcement. Following this argument to infinity offers one clear insight: that for any fixed enforcement strategy chosen by the regulator, insiders can successfully profit by transmitting the information along longer chains. Effectively, agents can game the system.

The practice of using long transmission chains to obfuscate the relationship between the sender and the receiver is observed also in money transfers. Money-laundering operations commonly involve “layering” —a practice of transferring through numerous accounts—that obscures a fund’s source from regulators. In the context of capital controls, leaked documents referred to as the “Panama Papers” revealed an extensive network of offshore financial intermediaries and shell companies that helped conspirators evade regulatory scrutiny dating back to the 1970s.

What is the optimal regulation of insider networks?

An effective method for combating gaming is regulatory ambiguity—that is, choosing a policy that is deliberately vague. As long as Isaac does not know with certainty the extent and scope of the regulator’s enforcement intensity, he cannot do “just enough” to escape regulatory prosecution.

Our analysis suggests that authorities benefit from flexible, broad guidelines on which to base regulatory enforcement. Regulatory institutions have been criticized for only loosely defining what constitutes illegal use of insider information. In practice, broad rules governing insider trading have been augmented by courts to ultimately determine illegality on a case-by-case basis. A rationale for using a case-specific approach to determining illegality is clear, in the context of our model: in circumstances where precise regulatory framework necessarily allows for more gaming, agents can easily adjust their strategies to circumvent regulation.

In response to regulatory ambiguity, insiders choose to form flexible core-periphery networks. First, the network is flexible, in the sense that it makes available to insiders multiple paths through which information can be transmitted to another agent in the network. Second, the network takes a core-periphery structure, where agents in the core act as conduits of information on behalf of the periphery members of the network. In doing so, agents form a cost-effective network that ensures that all periphery members have access to a wide set of transmission paths.

How does illegal transmission change with greater regulation?

Empirical studies have found that, historically, insider information has been shared within tight social networks, such as those that involve
familial, social, or geographic ties. Regulatory enforcement in the United States also appears to have become

stronger over time. How might regulation affect the structure of insider networks?

We extend the model so that agents belong to their respective local social networks. When regulatory enforcement becomes sufficiently strong, agents' information-sharing shifts away from their respective social networks and prompts the formation of more centralized and complex insider networks. These networks consist of intermediaries at the core, who are responsible for matching and relaying information between insiders who are otherwise not connected. The next figure provides an illustrative example of how the highly connected “core” members indirectly connect a large number of “periphery” members.

A Core-Periphery Insider Network

Expert networks, which have been implicated in insider trading cases in the United States, can be seen as real-life examples. These networks are consulting intermediaries that specialize in connecting clients to experts in various fields—including but not limited to technology, media, medicine, law, and finance—reportedly at rates of up to
$1,300 an hour. Providing clients with access to experts who may own proprietary information, the networks offer a conduit through which nonpublic information can be shared. These intermediaries have become a growing source of information to hedge funds, private equity firms, and other investment firms.

What are the implications for regulatory policy?

Our results suggest that strengthened regulatory and legislative initiatives may trigger demand for, and thereby the creation of, sophisticated networks that connect individuals who otherwise are not connected. Indeed, legislative and regulatory actions may have been

at least partly responsible
for the growth of the expert network industry in recent years. Regulation Fair Disclosure and the Global Analyst Research Settlements, enacted in the early 2000s, tightened governance on information disclosure and restricted insider information dissemination by financial intermediaries, who have

historically been at the center of information diffusion. In the political arena, the Stock Trading on Congressional Knowledge Act (STOCK Act), enacted in 2012, imposed restrictions on profiting from private information derived from Congressional activity. More recently, the European Union rolled out a legislative framework called MiFID II to improve market transparency that, among other things, bans banks from bundling transaction and research services. While these actions may succeed at displacing existing channels of information diffusion, they may prompt the formation of networks that aim at undermining the objective of improving market integrity, posing new challenges for policymakers.

Selman Erol is an assistant professor of economics at Tepper School of Business, Carnegie Mellon University.

Lee_michaelMichael Lee is an economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

How to cite this post:

Selman Erol and Michael Lee, “Insider Networks,” Federal Reserve Bank of New York Liberty Street Economics, June 25, 2020,


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Robert Solow on 'Why Economies Grow'

Published by Anonymous (not verified) on Sun, 10/05/2020 - 9:32pm in

As a follow-up and companion piece to my previous post, I decided to publish a transcription of a lecture on economic growth by Robert Solow that I transcribed originally as an aid for friends and colleagues who were studying economics. Although the lecture was given by Prof. Solow a few years ago during the height of the financial crisis, it contains loads of timeless insights, some of which is useful to be reminded of in the current situation, as discussions about the output gap resume in the next few years (see chart).

However, it's extremely important to keep in mind that in our current predicament as a result of covid potential GDP will also likely take a huge hit, as businesses and employees require some catching up in terms of business practices (misaligned with changing consumer preferences) and job training (due to skills entropy from employees being on furlough), to name only a few aspects that are likely to be impacted. In many ways, the post-covid period will bring us back to the type of economic analysis that used to occur a long time ago when natural catastrophes had significant and frequent impacts on economies' productive capacities.

The video of the lecture is included down below, though the sound quality is very bad, which is why I recommend reading the transcription instead (and you'll get through the transcript much faster by reading it).

Key insights are highlighted in bold font. Enjoy!

The business of this course is the long run. What are the sources of economic growth in the national economy or in the larger economy? Where does growth come from? And the policy implication – well, not implication, but policy question – is ‘How do you get an economy to grow rapidly and to have that growth widely shared in the nation?’
But there is a problem – it is a problem that appeared in the slides that Prof Newstone showed. It is a problem about getting there from here. So I’m going to start by talking a little bit about right now – this is not going to be the usual stuff about the financial crisis and all that – I have something else in mind.

There is something very odd about our economic situation in the US today. I read just recently an estimate from the Federal Reserve that about $7 trillion worth of wealth has been destroyed in the last year or year in a half (in 2008-2009). The country, so to speak, is $7 trillion poorer than it was.

When I wasn’t having a conversation with Cathy in the car, I was trying to divide 7 trillion by 300 million--the population of the US--in my head. It comes to about $23,000 for every man, woman and child in the country. Some, of course, have lost more, some have lost less.

What I want to point out is how strange that is: $7 trillion of wealth has gone down the drain but the productive capacity of the US economy – the capacity of our system to produce goods and service for its people – hasn’t diminished at all. In fact, it is undoubtedly higher than it was a year ago or 18 months ago: the labour force is a couple percent larger, the skills and education and training of the population is certainly not deteriorating and have probably gained. The net investment in capital has been positive – it’s been declining – but has been positive.

So we have a bigger stock of productive capital in the economy now than we did a year ago or 18 months ago. So the productive capacity of this economy is bigger than it was, despite of this $7 trillion of disappearance of wealth. If you are thinking of buying the US economy as a gift for your boyfriend or girlfriend, it would be worth just as much as it was worth – you know, like a used car – it would be worth just about as much as it was worth a year ago.

So in that sense we haven’t lost anything at all. But, of course, the point is we are in a recession. It is one year old according to pundits. And according to other pundits, or the same pundits, it’ll continue for at least until the second half of this year and maybe beyond. And the point is we are not using the productive capacity that we have.

You saw the unemployment numbers that Professor Newstone showed you. It is a lot harder to measure excess capacity in industry than it is to measure unemployment, but there are such figures, and they show an increase in unused capacity. So we have this machine for producing the goods and services for the population and we are not making full use of it. And that under-use of economic capacity, of productive capacity will go on for a long time. Even if the economy turns up in the second half of this year we will undoubtedly finish 2010 still with some slack in the economy because the slack disappears only gradually. 

So if you are interested – now, this is the point, this is why I started this way – if we are thinking about the long run growth of the economy (which means the long run growth of its capacity to produce), it’s not a separate but it’s an analytically slightly different problem to make sure that that capacity is used.

As long as we are not using all of the capacity that we have, the economy and the decision-makers in the economy are not likely to be motivated to do the things that increase potential output, that increase the productive capacity very rapidly.

So the short-run order of business – policy business – for us and every other rich country in Europe or Asia right now is to close that gap or narrow that gap between productive capacity and actual output, which means fundamentally trying to increase the demand for goods and services. And to do that in a way that at least doesn’t create obstacles to the long-run growth of the economy once the gap is closed, and maybe does some things that will help it.

So, imagine it is now January 2011 and the American economy and the economies of the other rich countries – developed countries of the world – are prospering reasonably well, are using their capacity, have closed that gap. Then the question is: What makes them grow? What economic activities that take place have the effect of increasing the capacity of the economy to produce useful goods and services? 

Now, you won’t be surprised – in fact, I’m staring at this monitor here and it says: so what determines the rate of economic growth in the economy? And that’s the question that I want to come to now, and it becomes relevant after we have done the short run task of closing that gap. There isn’t any one word or two word answer to that question. 

And I should make it explicit that I am thinking now about what determines the rate of economic growth in a rich economy, in an advanced industrial economy. I am not thinking about developing economies where the answers are related but the answers are somewhat different.

And the truth is that for an advanced economy the answers to that question – what are the sources of growth of national output, of productive capacity – are really the usual suspects. They are things we have known about now for quite a long time. And basically, what matters is what you might describe as investment in a very broad sense. I have to emphasize “in a very broad sense”.

What increases the productive of an economy like ours is investment in physical capital, in machinery, in computers and all the rest of that, investment in what economists call human capital, meaning skills and capacities of workers and people who work in the economy, and investment in new technology.

And here there is a slight difference between the US and even most of the countries in Europe. Not quite across the board but in most branches of industry the US is the technological leader. The gap was very big at the end of the Second World War and has closed considerably. But still, if you look at sector by sector, with some exceptions, the US is the technological leader.

Other countries of the world, that were even fairly rich countries have the luxury of being able to acquire technology by innovation, essentially by adopting, using what is already known. This country (i.e., the US) is in the position of having – so to speak – to invent its own future.

So basically, if we are looking now at the US, the things we have to look after in order to have a successful fairly high rate of growth (we can talk about the equity issues later) are a high rate of savings and investment in plant and equipment. I’d rather have the saving done here than abroad so that, in effect, the capital equipment that is built by investment in this country is owned in this country, and the returns to it stay in this country. It’s not necessary but it’s probably desirable. 

We need an extraordinary amount of emphasis – and we’ll talk more about this later – on investment in human capital, on producing the labour force that has the skills that are necessary to successfully operate that plant and equipment. And that is especially important because a country like this also has to invest in new technology. There is no place it can copy from – it has to in most cases create it itself.

Now, when I say new technology, the phrase tends to have a “high tech” air about it. But I don’t mean it that way.  New technology needn’t be high tech. It turns out that – in many ways – the most important contributors to productivity in the US over the last decade or two have been the application of information technology to wholesale trade, retail trade and financial services.

In fact, there are studies trying to understand why the major, big European economies, Germany, France, UK and Italy have lagged behind the US in productivity terms, general productivity terms. And the common answer seems to be that they have been slow to adapt the information technology to the service sectors. In manufacturing, there is very little gap, if any. But the gap is in the service sectors. 

So, this is extremely important. And I want to emphasize it, even at the risk of some repetition. One of the standard, valid, almost universal generalizations about the way people behave economically is that technically the income elasticity of the demand for services is high. All over the world, as incomes rise, personal incomes rise, people want to spend, [and] choose to spend a larger fraction of that income on services rather than goods. And you can understand why that should be so.

So this means that most of the rapidly growing advanced economies grow more rapidly in the service-producing sectors than in the goods-producing sector. There are exceptions to that. A country like Germany – to a lesser extent Japan, or formally Japan, not so much anymore – has a strong bias toward trying to make its living from simply exporting high quality manufactured goods. You notice I said exporting because the population of Germany, like the population of anywhere else, wants to consume services as it gets rich, not goods.

So those are the things, the essentially important things that a country like the US needs to do to generate long-run growth of productive capacity. 

I should say, in terms of policy, that you should beware of any universal advice like “well, the market will take care of that”. You know, if the alternative to the free-market economy is some kind of central planning, there is no question to where the advantage lies. But there is absolutely no evidence in the historical record of the advanced economies that zero regulation or weak regulation of industry is somehow conducive to rapid growth, or that minimal involvement of the government in the economy is conducive to rapid growth.

The functions of the government in terms of long run growth are just what you would deduce from what I have already said: promoting research and development, providing incentives for investment when they are lacking, taking care of education, and looking after mobility. By the way, it is probably also true that a country – there is less evidence for this generalization, but it’s probably also true – that business cycle instability is bad for economic growth.

For countries that are given to wide fluctuations like the ones we were looking at a few minutes ago, that’s not helpful for long-run growth because it adds to uncertainty. The likelihood of broad fluctuations adds to uncertainty is bad for all forward looking activities, like investment, like mobility, like education.

I wanted to say one more thing about the issue of mobility. When I say mobility, I mean industrial mobility and occupational mobility. In a rapidly growing, technologically-based economy, people have to change the nature of their jobs frequently and capital has to flow freely from obsolescent industries to new industries.

It is very important when you come in this course to talk about issues of equity. I think it is very important to find ways so that the burdens that are associated with necessary mobility don’t fall on workers and other people who are ill-equipped to prepare them [for that eventuality].

Dislocation and sometimes dislocation is probably an inevitable part of fast, mainly technologically-based growth. But it is the task of economic policy to find ways of combining that with income security, up to now, where it’s mostly below the median for incomes.

Is there still a role for validation?

Published by Anonymous (not verified) on Thu, 21/09/2017 - 9:02am in



Yes, answers the OU's Phil Berry, who argues that a validation arrangement can benefit alternative HE and established universities - serving to build a better quality sector.

The post Is there still a role for validation? appeared first on Wonkhe.

Time to open the door on sector diversity

Published by Anonymous (not verified) on Tue, 19/09/2017 - 9:04am in



The sector is diverse, but it could offer more choices of delivery methods to support the needs of a wider range of learners. Paul Feldman of Jisc, a member of the Higher Education Commission, introduces their recent report.

The post Time to open the door on sector diversity appeared first on Wonkhe.