The authors of Freakonomics keep me consistently entertained with their books and Blog posts about the way people, in all walks of life, respond to incentives – commonly in unpredictable ways, frequently with unintended consequences.
Their latest book, SuperFreakonomics, covers everything from why drunk walking is more dangerous than drunk driving to why suicide bombers should buy life insurance and I recommend it unreservedly for an entertaining, and thought-provoking read.
I’m particularly drawn to these books because one of the abiding fascinations of my work is the challenge of disentangling and understanding complex systems which often result in perverse and unintended consequences. My specialism is in the construction and evaluation of multi-agency partnerships designed to tackle drugs and/or crime problems. Frequently I find that small scale successful pilot schemes fail when they are replicated on a larger basis. This typically happens when agencies’ genuine commitment to work together is undone by differences in professional culture or the need to meet conflicting organisational targets. Getting a precise understanding of just how and why the model doesn’t work is key to rectifying the situation.
There is a wealth of research literature which documents the challenges of policing illegal drug markets. Drug markets are notoriously adaptable and law enforcement agencies need to weigh up the pros and cons of different approaches. Local communities were delighted when open street markets were closed down. Unfortunately, so were the next generation of drug dealers who learnt to organise business via mobile phone and ensure that young runners carried the drugs and cash (separately) – as well as almost all the risk of being arrested.
The subject matter of perverse consequences is one of the reasons that first attracted me to the area of Payment by Results. Even at this early stage of the various pilot schemes (for a full list see here), with outcomes still to be determined, much of the debate features on preventing providers from “gaming” the system by “cherry picking” the easy cases and “parking” the more difficult ones. The fundamental challenge of PbR is to come up with schemes which align the objectives of commissioners and providers.
I have argued before that the collaboration and effective partnerships required to deliver multi-million pound PbR schemes are likely to be even more difficult to achieve in what is becoming an increasingly competitive culture. I like to call this particular phenomenon“Collaboretition”, a phrase coined by Benita Matofska of @peoplewhoshare.
There was a spectacular example of “Collaboretition” last week when the governor of three South Yorkshire prisons locked out all the prison probation staff when he found out that their Probation Trust had gone into partnership with G4S and were intending to bid to run the prisons which were being put out to tender. The governor claimed that probation staff could be gaining an unfair competitive advantage through their knowledge of current practices and access to confidential information.
Much of the ensuing debate, which was unsurprisingly polarised along the lines of “competition is good” versus “privatisation is bad”, failed to mention that the prison service itself had developed a partnership with Mitie to submit a bid of their own.
Whatever the rights and wrongs of the case, by seeking to develop a further business opportunity, South Yorkshire Probation Trust had unintentionally jeopardised their current work – a prime example of an unintended consequence.
My own interest in the political, social and economic fall-out from this situation is somewhat tainted by the knowledge that the prisoners in these three jails are no longer receiving any of the services which were provided by probation staff. If anyone anyone has any updates on the South Yorkshire situation, please let us know below.
The other reason that I’m drawn to the work of the Freakonomics team is that the two authors, Dubner (the journalist) and Levitt (the academic economist) work so well in partnership. When the publishers offered the two of them a book deal, they both insisted on a 60-40 split – with the other guy getting the 60%.
That’s the spirit of partnership.