Author: Andrew Norton

Evidence and economic reform

~ Andrew Norton ~ 44 Comments

An article in the latest issue of federal Treasury’s Economic Roundup publication argues for the importance of evidence in ‘creating a broad base of community support for reform’. The authors, Joann Wilkie and Angelia Grant, use the economic reforms since 1983 as their case study.

I’ve no doubt that evidence and analysis was important in shaping elite views on economic reform. I’m not sure, however, that they make a convincing case on public support for the reform process. The main reason for saying this is that the polling we have suggests that the public opposed most of the specific economic reforms, with mixed survey results on their attitudes towards the whole reform process.

The problem is evident in contradictions within the article. The authors say that influential experts and commentators were important in ‘convincing the public to support tariff reform’. But their own data a couple of pages on clearly shows that most people continue to support tariffs. Wilkie and Grant note, as I did in a 2004 article, that polling does show understanding of the argument that free trade benefits consumers. However, on my analysis concern about jobs is the over-riding consideration.

Similarly, privatisation almost always polls poorly, and while there were some mixed results in early industrial relations polling, opinion was strongly against WorkChoices.
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Liberty and Society, 1-3 May 2009

~ Andrew Norton ~ Leave a comment

For university students and recent graduates, applications are open for the next CIS Liberty and Society seminar. It starts with a dinner on Friday 1 May, with sessions over the next two days on liberal political philosophy, liberal economics, liberal law and a final policy-oriented session. If you are interested in classical liberal ideas, you’ll get lot from this weekend.

You don’t have to be a classical liberal to attend; we always select a few conservatives and social democrats to keep the debate lively. But everyone has to express their disagreements in a reasoned and polite way, so all who attend can participate in the discussion without being intimidated.

If you are selected, the CIS will cover all the costs of the weekend itself, and there are also air fare subsidies available for those who need help getting to Sydney.

Applications close on 3 April.

More voucher confusion

~ Andrew Norton ~ 2 Comments

The word ‘voucher’ sure has journalists confused. Last week the SMH took Gillard’s spin at face value. And in today’s Australian we are told this:

The system isn’t a voucher system. Students aren’t being issued with a portable amount of money they can just cash in where they like. For all the talk of empowering students with greater choice, it is the universities, and ultimately their vice-chancellors, that will frame that choice, since it is they that will decide what is on offer.

And while universities can be expected to tailor offerings to attract students, not all universities will seek to expand. Offerings will be influenced not just by what students want, but also by the relative cost of delivery.

There are two confusions here. One is the point I made last week about the technology of delivering the subsidy. This is irrelevant to the concept of a voucher, which is that a consumer’s decision, rather than a bureaucrat’s decision, triggers the payment (under the current system, no payment is made unless a student occupies a place first authorised by the bureaucracy).

The second confusion is about the role of suppliers and prices. In this respect, ‘voucher’ system is preferable to Bradley’s language of a ‘demand-driven’ system, since what is delivered in a market or quasi-market system is not whatever consumers want, but the intersection of supply and demand, mediated by prices. So the actions of suppliers and the role of prices are integral to voucher systems, not features that make a voucher system not a voucher system.

From one Soviet-style policy to another

~ Andrew Norton ~ 6 Comments

In a particularly bad day for long-suffering university administrators, Julia Gillard yesterday joined Kim Carr in piling on the bureaucracy. Though she did not say so directly in her speech to the AFR higher education conference, she clearly intends to follow the Bradley report recommendation to impose institutional enrolment targets for low SES students, which will cumulatively meet a national target.

By 2020, 20% of university undergraduate enrolments are to be of low SES students. She says the current figure is ‘around 16%’. Though it sounds about right, I can’t verify this because this number is not currently reported (it is for all students, but not for undergraduates only).

This is, however, the least of the statistical problems with this target. As I argued in December, even if targets are adopted the denominator should not be total university enrolments. This is a shifting target, in which the most important factor is not low SES enrolments but enrolments of other SES groups. In order for low SES to increase their share of total enrolments their enrolments need to grow more quickly than that of other groups. Substantial improvements in low SES enrolments are not in themselves enough.

Short of engaging in class discrimination against applicants from middle and high SES groups, substantially increasing low SES as a share of total enrolments is going to be very difficult to achieve. Gillard herself notes that the school completion rate for high SES students has room to increase, but to the extent that it does reaching the low SES target would become more difficult.
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Kim Carr suppresses cognitive dissonance

~ Andrew Norton ~ 5 Comments

In a speech to the AFR‘s higher education conference today, Science and Research Minister Kim Carr, showing Nelsonesque levels of capacity to suppress cognitive dissonance, said that:

the Government will expect universities to provide better, more meaningful data on research costs through activity-based reporting, and to meet specific performance targets to be developed in consultation with the sector. …

The Government will use any additional funding as a lever to:

* drive structural reform within institutions and across the sector,
* increase transparency and accountability,
* ensure that resources are allocated rationally and used efficiently,
* make universities responsible for their decisions, and
* improve the way universities manage their estate.
These are precisely the same ends we will expect to achieve through mission-based funding compacts.

but at the same time…

Compacts will increase institutional autonomy …

So unprecedented interference in how universities run their business increases their autonomy?

I know Orwell is overused, but how can I resist?:

War is Peace.
Freedom is Slavery.
Ignorance is Strength.

Are book reviewers softer than movie reviewers?

~ Andrew Norton ~ 7 Comments

I was intrigued last November by this Marginal Revolution post on why music reviews tend to be positive, compared to film reviews. I was particularly interested in a comment comparing film and book reviews:

Book reviews are generally positive because reviewers frequently have a choice of which book of several to review, and choose to read books they expect to like, and then to give publicity to ones they enjoyed (knowing that there’s no such thing as bad publicity). It seems like there is a three-step process:
1. Is this book likely to be worth my time?
2. Read it. Is this book worth writing about?
3. Write a review.
Movie reviews basically have to cover all releases in a week, so there is no such filtering out of bad products.

My perception is that book reviews tend to be softer than movie reviews, but I had a different theory: that for social reasons people in the relatively small literary community are reluctant to give negative reviews to people they are likely to meet, if they don’t know them already. As the vast majority of reviewed films are foreign, this is less of a problem in movie reviewing.

A friend who is a part-time literary critic made a related point, that many book reviewers are actual or aspiring book writers themselves, while few movie reviewers have made or are likely to make a film. There are several reasons why this may lead book authors to be softer reviewers: they don’t want to provoke negative reviews of their own work, compared to a critic less of their reputation with readers relies on providing good advice to book buyers (which could lead to lower quality of reviewing overall, not just in being soft), and having been through the pain of writing themselves may just feel sorry for authors, even if the book isn’t much good.
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Two voucher schemes, ten years apart

~ Andrew Norton ~ 4 Comments

Julia Gillard’s part response this week to the Bradley report had me casting my mind back to an unscheduled, and rather more dramatic, higher education policy launch on 13 October 1999. On that day Labor ambushed my then boss, David Kemp, with a leaked copy of his Cabinet submission to reform the higher education system. I was his higher education adviser, and reform like this was why I was in politics.

In two respects, there are close parallels between the two launches. Both proposed a voucher scheme, but neither wanted to call it that. In the Kemp plan, it was a ‘universal tuition subsidy’. In the press clippings I have kept of the time, the voucher scheme in itself did not attract much controversy. There were a couple of the usual claims about regional campuses, but most of the voucher criticism focused on an alleged broken promise not to introduce such a scheme.

But there the differences end. While Gillard immediately ruled out any increase in fees, most of the 1999 controversy surrounded the plan to uncap fees (though there was some confusion in the media, with full fees being muddled with deregulated fees).
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Gillard adopts Bradley report, with its main flaw

~ Andrew Norton ~ 8 Comments

When yesterday I admired Julia Gillard’s chutzpah in stating that her voucher scheme isn’t a voucher scheme I did not expect anyone would believe it. But she has shown that if you spin brazenly enough people will believe you. Not only does the SMH buy Gillard’s non-existent distinction without negative comment, it adds an embellishment in its favour that is not in the published version of Gillard’s speech:

Ms Gillard said the change in funding model was not the student voucher system advocated by Professor Bradley.

Alas, it is exactly the voucher scheme advocated by Denise Bradley, with a slightly later starting date. Gillard has ruled out deregulating HECS price caps, leaving the system entirely reliant on the government subsidy creating the prices per student place that will be the incentives to drive a demand-driven system. For reasons explained in my recent CIS paper, I have no confidence that this will occur. Like Bradley, Gillard shows no sign that she understands this issue, much less that she has a solution to it.

At least Monash VC Richard Larkins was alert to one consequence:

Richard Larkins said abolishing caps on student numbers, while retaining them on the HECS amounts universities charged, could create “perverse incentives” to enrol more international or postgraduate students, who are not subject to price caps.

Exactly.

PJ O’Rourke finally coming to Australia

~ Andrew Norton ~ 9 Comments

I first came across PJ O’Rourke in 1987, via an hilarious review of a book by Jimmy Carter in the American Spectator (then a witty Tory magazine, not the Clinton-hating rag it became in the 1990s). Vindicating his harsh judgment, the Carter book now sells second-hand for $3.98. This review led me to his also-hilarious Republican Party Reptile and many other good books over more than 20 years.

He’s finally coming to Australia, a little later than originally planned via cancer treatment, to give the annual CIS John Bonython Lecture.

He’ll speak in Sydney on 21 April and in Perth on 28 April. I’m not sure if I have any New Zealand readers, but he will speak in Auckland on 30 April. (For east coast Australian readers with lots of frequent flyer points, note the arbitrage opportunity in the Auckland dinner.)