Guest blog post: 13 states get on board for cutting-edge cost-benefit analysis
Gary VanLandingham is director of Results First, an initiative of the Pew Center on the States and the John D. and Catherine T. MacArthur Foundation, with additional support from the Annie E. Casey Foundation. Gary was CBKB’s first guest to take part in our “Four Questions” series and blogged for us again as Results First reached its one-year mark. He wrote this post shortly before he was a co-presenter of our webinar “Making Sense of the Bottom Line: A Guide to Reading Cost-Benefit Reports” on April 24, 2012.
In an era of persistent budget deficits, at least a dozen states are moving to adapt and implement a cutting-edge tool for policy research and analysis, beginning with criminal justice policy and eventually expanding to other areas.
States are under increasing pressure to ensure that scarce resources are invested in programs that yield the best results. In addition, many policymakers are looking for information that would allow them to target cuts more strategically, rather than making across-the-board reductions that treat effective and ineffective programs alike.
To meet this need, Connecticut, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Massachusetts, New Mexico, New York, Oregon, Texas, and Vermont, with assistance from Pew’s Results First initiative, are adapting a proven research and analysis model developed and implemented over 15 years by the Washington State Institute for Public Policy (WSIPP).
This Results First model goes beyond traditional cost-benefit analysis to:
- Analyze all available research to identify systematically which programs work and which don’t, often evaluating hundreds of studies to see how they were conducted and what they found.
- Calculate the potential return on investment of policy options for a particular state, taking into account both the short and long term and the effect on taxpayers, program participants, and residents who are most directly affected.
- Predict the investment risk if the initial assumptions behind the estimates turn out to be different from what was predicted.
- Rank the projected benefits, costs, and risks of all programs in a guide to policy options.
- Identify ineffective programs that could be targeted for cuts or elimination.
- Assess the combined benefits and costs of a “portfolio” of policies, instead of judging each program separately.
Using this model, bipartisan majorities in Washington State decided to invest in crime-prevention and treatment programs that have contributed to:
- Savings of $1.3 billion per two-year budget cycle, eliminating the need to build new prisons and making it possible to close an adult prison and a juvenile detention facility; and
- Decreases in crime rates and juvenile-arrest rates lower than national averages.
Each state adapting the model has established an implementation team of analysts. Many entities share responsibility for implementing the model, including interagency workgroups, legislative finance and evaluation offices, departments of correction, and nonprofit good-government groups, depending on state characteristics and needs. Each state has also formed a policy team of key stakeholders who are committed to using the model’s results in policy and budget discussions.
Results First is providing intensive technical assistance to help state staff collect and analyze data and apply them to the cost-benefit model, as well as to reach out to key stakeholders and policymakers. Staff from participating states also meet occasionally to share experiences as a learning community. They will also be able to draw on the results of a 50-state survey that will be completed this summer. This study is identifying the extent to which states are conducting cost-benefit analyses and how they are using the results to inform policy and budget decisions.
All states participating in Results First begin by using the model to assess their criminal justice investments. An expanded version of the model will assess several other policy areas—including child welfare, Pre-K through12th grade education, mental health, substance abuse, and teen birth prevention programs. The tool to assess these other areas will be peer-reviewed and made available later this year.
Two states—Iowa and New York—will have the criminal justice component of the model fully operational in time to inform policy and budget decisions in 2012. Other states should follow suit in 2013. Additional states are expected to join the initiative, based on their capacity for and commitment to implementing the model.
States’ efforts to use cutting-edge, cost-benefit tools will help provide state residents with the most effective services and taxpayers with the best possible return on their investment.