The Windrush scandal and police failures show the dangers of bureaucratic targets

The Windrush scandal still bubbles away.

The bureaucrats at the Home Office are being condemned for their harsh behaviour. But it is scarcely their fault – they are simply reacting in a way entirely compatible with the economic theory of rational choice.

It emerged during the saga of Amber Rudd’s resignation that targets had been set within the Home Office for the number of illegal immigrants to be deported each year.

The relevant officials could have spent a lot of time and effort, for example, tracking down members of eastern European criminal gangs.

Instead, they focused on the much easier task of deporting elderly people who have lived in Britain for decades. Many of these immigrants, understandably, regarded themselves as British and had never bothered to hunt down and fill in the complicated forms which would have guaranteed their residency.

The bureaucrats reacted to targets exactly as rational choice theory predicts, seeking to meet them in a way which minimises the costs and effort to them. The problem lies not with the individuals trying to meet the targets, but with those who set the targets in the first place.

A great deal of the behaviour of the police can be accounted for in the same way.

You could try to tackle knife crime, at personal risk to yourself. But it is much easier and safer to investigate and “solve” hate crimes, such as when Tony Blair himself was interrogated for allegedly abusing the Welsh.

An interesting new Princeton University book by the American historian Jerry Z Muller provides many such examples from the United States. The Tyranny of Metrics is about the unintended consequences which often follow when targets are set to measure performance.

More precisely, it is about the adverse effects which can be created when standardised measures of performance are substituted for personal judgement based on experience.

Unsurprisingly to economists, if the rewards which agents receive become dependent on meeting quantitative targets, they will game the system to try and achieve them.

Muller’s book was inspired by the excellent TV series The Wire, set in Baltimore and based on real life. A central theme was the baleful influence which targets to cut crime had on the police department. They spent a lot of time arresting low-level drug dealers instead of going for the top villains.

A key point which Muller makes is that a decline in trust leads to an increased demand for measured accountability. A lack of trust can work two ways, with both the governors and the governed becoming suspicious of each other’s abilities or motives.

For example, it was under Margaret Thatcher that the first of a disastrous series of exam performance targets was introduced into British schools, because teachers were seen as being hopelessly and uselessly left-wing.

It is easy to introduce a target. It is much harder to generate a culture within an organisation in which everyone is trusted to do a good job. But, ultimately, it is the latter which works.

Paul Ormerod 

As published in City AM Wednesday 16th May 2018

Image: Home Office by Steve Cadman is licensed under CC BY-SA 2.0

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ELLIE EVANS

Partner

e: eevans@volterra.co.uk
t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.