Statistically informed ideas on how to make the world work better.

Month: April, 2012

Idea: Fixing the US primary election system with rotating county primaries

John Tillinghast recently wrote me with a clever idea to fix the US primary election system. Since it’s very much in the spirit of this blog, I’ll present it for your comments. The text is a mix of what he sent me and some broader framing of the problem.

The problem: US presidential primary elections (and caucuses – let’s ignore the difference for now) are held first in Iowa and New Hampshire every year. The ostensible reason for this is to choose two small states that will give the politicians a chance to meet many voters face-to-face and not just saturate major media markets with ads. While the record of these states at choosing the eventual nominees of the parties is mixed, it is certainly true that many candidates drop out at this stage of the race. The problem is that these two small, highly non-representative states thus have quite disproportionate power over a national process. So the challenge is to find a way to preserve the need for politicians to succeed at convincing voters face-to-face to choose them, while removing the disproportionate role of these two states.

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A pharmaceutical insider’s take on a National Institute of Pharmaceutics

I have a friend who works as a scientist in the pharmaceutical industry, and he recently emailed me with some thoughts on my post regarding a National Institute of Pharmaceutics. It’s clear that he knows a lot more about what he’s saying than I do, and a really interesting idea emerges at the end. The rest of this post is his email (slightly edited for context), and I respond in a comment:

“I’ve been following your blog and I read your NIP idea with a lot of interest, as someone making a living as a storm trooper for the evil big pharma empire, and as someone that has also been wondering if there is better way to develop and distribute new drugs.

“My biggest concern is how we’ll decide who will get funding. People carefully move a drug candidate from one development stage to the next, especially since it is going to cost a lot more money at the next stage than all the money spent so far combined. Those decisions are made by each company. If we now move this responsibility to the NIP, are we sure that they will do at least as good a job as current pharma CEOs do?

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Idea: To fix the filibuster, make it harder to overcome

Yesterday, I wrote about how political (and other) systems can be shaped by culture as well as the rules that govern them. Today, based on this, I am going to post a relatively radical idea about how to fix the gridlock in the US Senate. (I’ll assume you’re familiar with the info in the previous post on the filibuster and the functioning of the Senate.)

Most Senate-watchers suggest that the filibuster should be eliminated, since it has become just a tool for obstruction. Those that don’t are usually thinking in the short-term about aiding their party, which would be the current minority. I will suggest the opposite: strengthen the filibuster by increasing the number of votes needed to override one. In the short-term, this will produce more gridlock. In the long-term, it will restore a culture of collegiality and compromise.

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The structure and culture of political systems

Steven Pearlstein has a very nice take in today’s Washington Post on why US politics has become so dysfunctional. At the base of his argument is the idea that the individual politicians are not really to blame – they are trapped in a system that creates strong incentives for them to behave in increasingly polarized ways. Politicians that don’t follow these incentives are usually either not elected, not re-elected, or marginalized and unable to make much difference.

The key point here is the distinction between individuals and systems, and how each affects the other. I’ve been meaning to write a long post on this, and I will soon: it’s one of the main principles underlying this blog. For now, though, I want to look specifically at one case of how systems constrain individuals: the case of the US Senate. In particular, I want to look at two aspects of constraint: the rules and laws that structure the Senate, and the culture of how those rules are interpreted.

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The value of a dollar depends on who you are: Why we all need to understand utility functions

How much is a dollar worth? (Forget about exchange rates and inflation for a minute.) It’s a funny question because we’re used to measuring the value of other things in dollars, so we have a tendency to assume that the value of a dollar is thus a rigid scale, an invariable standard for comparisons. It’s like asking, “How long is a meter?”

One way to answer it is to inverse the relationships: a meter is 0.54 Alan-heights, for example. A dollar in about 1 candy bar, or 0.67 Starbuck’s coffees. And this is true as far as it goes, but it doesn’t get us very far. A meter is a more useful general measure of length than Alan-heights, and a dollar is a more useful measure of value than candy or coffee. But the problem here is that dollars are supposed to measure value, and value is a tricky thing to pin down. Length is pretty darn invariable (unless you happen to be traveling at near-light speed), but value is subjective. Subjective, but important: most of the fields of economics and finance, as well as much of government, is devoted to trying to generate value for individuals, companies, and society. And the problem is that a dollar (or a euro, or a yen…) is actually a very bad measure of value: in statistical terms, it not only has a lot of variance (i.e., measurement noise), but also a systematic bias. While measurement noise can often be worked around, bias is usually much trickier. And that, it turns out, is something that is hugely important but underappreciated, even by economists…

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Idea: NIP, National Institutes of Pharmaceutics

The problem, in brief: Drugs are expensive. This is not because they are expensive to make, but because they are expensive to develop, and because pharmaceutical companies hold patents. The high drug prices mean that many who need them don’t get them, and that many who do get them become impoverished as a result. Drug costs represent a substantial and growing percentage of medical expenditures, regardless of how they are paid for. However, pharmaceutical companies argue (reasonably) that without patent rights, they would have no incentive to conduct the risky, billions of dollars of research necessary to develop the drugs. So, how can we get cheap drugs to the population without slowing down future drug development?

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Designing a system to fund health research

Hypothetical representation of the frequency of different degrees of ethical research conduct under two funding schemes with differing amounts of pressure. The different categories of ethical conduct should be seen as a continuum, not as distinct. It is clear that even a small shift in the average level of ethical conduct could have a large effect on the conduct of science.

Thursday, I attended a meeting at the University of Sherbrooke in which ~20 health researchers could discuss some proposed changes to the funding system of CIHR (the Canadian equivalent of the US National Institutes of Health) with Alain Beaudet, President of CIHR (i.e., the big cheese). I had read the documents summarizing the proposed changes, and I was optimistic. I emerged from the meeting even more encouraged and highly impressed – Dr. Beaudet understands the underlying principles that make a funding system succeed or fail to a degree that I have rarely seen. This is because he does not simply view it as a budget to be allocated, nor as a set of priorities to be achieved. He understands that this is a system, in the sense that there are many different actors and incentives and rules and constraints, all of which interact in certain ways to produce outcomes that, while not deterministic, can be largely predicted based on the structure of the system.

And I like systems (in this sense), so I’ve been thinking about this for a while. So here’s a primer on CIHR funding, the problems it has now, the proposed changes, and why they’ll (probably) work. This may seem a bit technical or wonky to some of you, but I think it will be more interesting if you read with this general question in mind: How can we design a way to distribute funds for research that creates the most good research per dollar spent, given that researchers and administrators are the imperfect humans they are?  Read the rest of this entry »

The regulation curve

So I came home a couple days ago and my wife was frustrated with work. She is required to budget her time for different clients very precisely, and the requirements are a huge paperwork burden and actually constrain her ability to do a good job.

At the same time, I have a meeting yesterday with Alain Beaudet, the head of CIHR (Canada’s equivalent of the US National Institutes of Health) to comment on some proposed changes to Canada’s health research funding system. One of the things I suggested to him was to require a lot less information for evaluating grants.

The link between these two things is a general relationship in human systems between how precisely and hard we try to get a certain outcome by imposing rules, and how successful we are at getting it. The result (efficiency, quality, etc) is often optimized at intermediate levels of effort (oversight, amount of paperwork, pressure we apply, etc):

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On moving Canada’s retirement age from 65 to 67


For those of you who don’t keep on top of Canadian politics (and may not have heard that we’re eliminating the penny – yay!), the latest budget by the conservative government proposes changing the eligibility age for Old Age Security (OAS – a rough equivalent of US social security) from 65 to 67, to be phased in by 2029. There has been a lot of debate in the media here, and I wanted to chime in, especially since this debate parallels one going on in the US and elsewhere.

First, I should say that I have none of the economic or policy expertise to evaluate the details of Canada’s plan. I don’t know if this is essential to maintain Canada’s fiscal stability or not and I don’t know much about the social consequences.

What I do know about is aging and demography. And what’s clear is that not only are we living longer than ever, we are aging slower than ever. A 65 year old today is effectively younger than a 65 year old 100 years ago. What this means is that maintaining the chronological age for OAS eligibility static (at 65) is effectively a policy to reduce retirement age. This may or may not be desirable based on our budgets and societal priorities, but it should be acknowledged that over time maintenance of the status quo becomes, effectively, a radical policy shift.

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Insight: Democracy as simplicity, for better or worse

Paul Arora has a very nice comment under my vegetable mandate post, but it touches on another subject, so I thought I’d use it as a starting point for a new post:

“The argument FOR simplicity in the political system is that in a participatory democracy many many very complex issues have to be digested by the electorate and choices made. You could (and many people have) make a doctoral thesis around the economics of corn prices. The average voter will not have the time nor interest to dig into the details of ALL issues so best to present it like a menu of simple choices so everyone can participate (Andrew Potter uses the analogy of corporate branding to simplify political choice: vintage vs. new wave; quality vs thrift). The argument AGAINST simplicity is clear: VERY important issues get lost in the details and each issue can be framed to skew support to one view (government must fund the military vs. government funding for health care will be inefficient). Does this just end with the quip about democracy being the worst political system except all the others?”

I think this hits the nail right on the head. The corporate branding example is new to me, but these sorts of ideas have been on my mind for a while. I’m not sure I can improve much on Paul’s summary, but here are a few additional thoughts:

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