May 09, 2004
I hope for the best for this – but fear the worst

Payment by results in Denver:

DENVER — As a teacher of emotionally disturbed children, Jeremy Abshire sets goals for each of his students. Geronimo, 14, an American Indian who knew only the letters for "Jerry," will read and write, and sign his true name. Shaneesa, a meek 12-year-old reading at a first-grade level, will catch up to her middle-school peers and attend regular classes in the fall.

Under a proposal approved by teachers here and to be considered by voters next year, if Mr. Abshire's students reach the goals he sets, his salary will grow. But if his classroom becomes a mere holding tank, his salary, too, will stagnate.

"The bottom line is, do you reward teachers for just sitting here and sticking it out, or for doing something?" said Mr. Abshire, who has been teaching for four years. "The free market doesn't handle things that way, so why should it be any different here?"

Yes and no. The hard bit with schemes like this is setting the goals fairly. Ambition, if you think about it, is liable to be penalised. Canny manipulation of the targets so that they are easily reachable is liable to be rewarded. Yet reaching for the stars has definite merit as a teaching attitude, doesn't it?

What really happens in that "free market" that public sector people talk about so much these days is not just that they set targets and reward you for reaching them. The other way they check up if you are working well is: they watch you to see if you are working well. Your boss works next door, and he can tell. He did your job, and he can tell if you are doing it well or not, even if the "results" now say different.

One of the most depressing things about the public sector is when it mimics the "free market" inaccurately, generally by putting lots of bureaucratic procedures in place, to measure "achievement" which end up getting in the way of achievement. In the real free market there is a constant tension between measuring work accurately, and the threat that such systems pose to the actual doing of the work enthusiastically.

So, I wish this Denver scheme well, but say of it: watch out. There will be problems as well as miracles, although probably in the opposite order to that order. The miracles will come first, when the scheme starts out working pretty much as it is intended to. But then will come the problems, made all the worse by the now immense prestige and hence political untouchability of the new regime, when canny operators learn to manipulate it into a regular reward system for everyone, even though most of them are just running the same old holding operation that the scheme was supposed to get rid of.

Sorry, but when it comes to the public sector I am a pessimist, and never more so than when they are faking up a market, but without actual consumers, waving money, allowed to bugger off if they don't like the product, etc., etc..

Posted by Brian Micklethwait at 03:21 PM
Category: Free market reforms