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Not a weblog

April 15th, 2003

This is pretty much the antithesis of blogging. I read an article by Will Hutton a few days ago, thought I’d noted down the link and now I can’t find it anywhere. Anyway, Hutton produced statistics to show that the increased public spending of Blair’s second term was producing the desired results – shorter waiting lists, better school performance, lower crime and so on. But I don’t have a link, so you’ll just have to take my word for it.

As I recall, Hutton had a go at the standard free-market line that ‘you don’t solve a problem by throwing money at it’. It’s easy to make fun of this kind of claim. After all, no-one, least of all free-marketeers believes this in relation to their daily lives – there aren’t that many problems that can’t be eased to some extent by a generous application of money.

But I thought that it might be worth exploring the underlying argument a bit further. At its weakest it’s a statement about logical implication, namely that spending more money is neither necessary nor sufficient to bring about better outcomes. This is true, and can be backed up by supporting examples and counterexamples, but it isn’t very helpful. Training is neither necessary nor sufficient for swimmers to win races, but that doesn’t mean it’s a good idea not to train.

A more serious version of the claim rests on the factual claim that the public sector is inefficient compared to the private sector. If true, this means that it would be possible to improve performance without cost, and it raises the possibility that an increase in funds will simply lead to an increase in inefficiency. But most plausible models of public sector inefficiency don’t yield this conclusion.

Finally, there is statistical evidence. Taken in aggregate, statistical evidence produces the commonsense result that, other things equal, more input implies more output. The apparent counterexamples, such as US studies showing no relationship between class size and academic performance, generally don’t stand up to scrutiny very well. (at last, a link!)

Update In the comments thread, Mark Chambers comes to my rescue with this link to the Hutton article.

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