A call for randomised trials in policymaking

Dr Andrew Leigh MP, Assistant Minister for Competition, Charities and Treasury, Assistant Minister for Employment, has called for “randomised trials” to guide the path to effective government spending.

“While randomised trials are common in medicine, rigorous evaluation remains rare in policymaking,” stated Dr Leigh.

A study from the Committee for Economic Development of Australia (CEDA) think tank examined a sample of 20 Australian Government programs conducted between 2015 and 2022, with a total expenditure of more than $200 billion.

CEDA found 95% were not properly evaluated. Its analysis of state and territory government evaluations reported similar results. Across the board, CEDA estimates fewer than 1.5% of government policy evaluations use a randomised design.

This finding echoes the Productivity Commission’s 2020 report into the evaluation of Indigenous programs, which concluded that ‘both the quality and usefulness of evaluations of policies and programs affecting Aboriginal and Torres Strait Islander people are lacking’, and ‘evaluation is often an afterthought rather than built into policy design’.

“That’s where the Australian Centre for Evaluation comes in. Established a year ago, the centre aims to expand the quality and quantity of evaluation across the public service. Collaborating with departments, the centre is busily initiating rigorous evaluations of programs across a range of agencies,” Dr Leigh commented.

“When our political leaders approve new policies that affect the lives of many, they do not need any rigorous evidence. Best guesses and ideology often trump results-oriented policy.

The sad result is that many of our public policies are likely causing more harm than good, some informed by bad evaluations. As taxpayers, we deserve better,” stated Sebastian Tofts-Len, an economist at CEDA.

While the Australian Centre for Evaluation works across government, the Paul Ramsay Foundation has recently launched a $2 million grant round to support experimental evaluations conducted by non‑profits with a social impact mission. The Paul Ramsay Foundation gives a few examples, including programs aimed at improving education outcomes for young people with disabilities, reducing domestic and family violence, or helping jobless people find work. This announcement demonstrates the commitment to rigorous evaluation by Australia’s largest philanthropic foundation.

Dr Leigh emphasised, “A ‘what works?’ approach to government promotes democratic accountability. It makes government more effective and efficient – producing better public services for every dollar we raise in taxes. But it especially matters for the most vulnerable. When government doesn’t work, the richest can turn to private options. But the poorest have nowhere else to turn, since they rely on well‑functioning government services for healthcare, education, public safety and social services.

“Getting impact evaluation right can deliver not just a more productive government, but a more egalitarian society.”

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