Both economic theory and evidence from the UK shows that state-funded healthcare which incorporates market-type incentives will save more lives and reduce more suffering

Commentary by Allyson Pollock et al misrepresents the findings of economic analyses of quasi-markets says Julian Le Grand. Looking at the evidence (and recognizing the defects of state agencies’ administration of healthcare) shows that quasi-markets with fixed prices perform better. Competitive mechanisms in the NHS were also supported by previous Labour reform

Academia, policy and politics.

In October 2003, I started a secondment from the London School of Economics (LSE), where I hold the Richard Titmuss Chair of Social Policy, to No 10 Downing Street, where I worked as a senior policy adviser to the Prime Minister, Tony Blair. I began working initially on a specific project: developing policies on extending user choice in public services, with particular reference to health care and education. Then I was asked to be the Prime Minister’s health policy adviser, a role I agreed to take on up to the general election that took place in May 2005. In the event I stayed on a few weeks after the election until August of that year, when I returned to LSE. So I worked for nearly two years in Downing Street. Mine was an unusual appointment. Most of my Downing Street colleagues were much younger than me; unlike me, all had had experience of working as political or policy advisers in government, despite their relative youth; and none were academics. Although interchange between government and academia is not uncommon in the United States, it is rare in the UK and other countries. So the editors of this journal felt that readers might be interested in my reflections on the experience, especially the differences between being an academic in a university and an academic in government: the squarish peg of academia in the round hole of politics and policy. Of course, the most obvious difference was in working style. As a senior academic at a good university, your time is broadly your own to allocate as you will – apart from the occasional lecture or seminar series, and even those you can usually re-arrange if necessary. But in government, as Harold Macmillan so famously noted, you are at the mercy of events. So often I would wake up in the morning, switch on the radio, hear about the latest outbreak of MRSA in a National Health Service (NHS) hospital or the mile-long queue of people waiting to register for a new NHS dentist, and know that the reflective paper the Prime Minister wanted on the pros and cons of more patient choice was going to have to be put off yet again. Rarely did days work out as planned; indeed, rarely did minutes work out as planned.

Knights, knaves or pawns? Human behaviour and social policy.

There are two fundamental changes currently under way in the welfare state. These are the development of quasi-markets in welfare provision, and the supplementation of ‘fiscal’ welfare by ‘legal’ welfare: policies that rely on redistributing income through regulation and other legal devices, instead of through the tax and social security system. This article argues that these changes are in part the result of a fundamental shift in policy-makers’ beliefs concerning human motivation and behaviour. People who finance, operate and use the welfare stateare no longer assumed to be either public spirited altruists (knights) or passive recipients of state largesse (pawns); instead they are all considered to be in one way or another self-interested (knaves). However, since neither the ‘new’ nor the ‘old’ set of assumptions are based on evidence, policies based on the new set are as likely to fail as those based on the old. What is needed are ‘robust’ policies that are not dependent on any simple view of human behaviour.

Outsider and Insider Expertise: The response of residents of deprived neighbourhoods to an academic definition of social exclusion

The aim of this paper is to compare academic interpretations of the term social exclusion with the understanding of people with direct experience of the phenomenon. A pre-selected group of residents of deprived neighbourhoods were asked about various aspects of the concept and their responses compared with the definitions of social exclusion used by Burchardt, Le Grand and Piachaud in their 1999 article in the journal Social Policy and Administration. In general, the residents' understanding of the term corresponded well with the more academic definitions; however, in one or two key areas there were significant differences, for example, the importance of neighbourhood and 'service poverty', and the need for action against aspects of social exclusion on the grounds of social justice. This confirms that it might be useful for more academic concepts to be tested against the views of those with experience of the phenomenon which the concept is trying to capture.definitions of social exclusion, community involvement, neighbourhood renewal

Tax relief and partnership pensions

Government support of private (occupational and personal) pensions through tax relief is an important element in the UK’s retirement income system. However, the current tax relief system is regressive, lacks transparency and is difficult to control. This paper argues that it should be replaced by a cost-neutral matching-grant or tax-credit scheme. Such a scheme would embody the ‘partnership’ idea implicit in much government policy in this area, but would be much more progressive, more open and more accountable than existing arrangements. The argument is illustrated through a comparison of the cost and distributional impact of the current system with those of an alternative tax-credit scheme.

A springboard for new citizens: universal basic capital and a citizen’s day

In recent years there have been several proposals from academics, think tanks, and politicians for a universal grant of basic capital (UBC) to be awarded to every citizen. There has been one UBC programme that was actually implemented: the British Child Trust Fund, started in 2003 by a Labour Government and abolished by a Coalition Government in 2011. This paper discusses the case for a UBC, focusing attention on its potential for helping young people to attain long-term positive outcomes in several dimensions of life, from employment to health. By looking at the experience of the Child Trust Fund, the paper also highlights lessons for how a UBC should be implemented in practice. It proposes a Citizen’s Day: a coming-of-age occasion, marked by a ceremony at which a substantial UBC is awarded, along with the right to vote

Has the tide turned on higher education inequality?

In his classic book Strategy of Equality, Julian Le Grand uncovered surprising findings about the main beneficiaries of social spending. Four decades on, what progress has been made towards achieving greater social equality? Has the middle class released its “ownership” of the welfare state? A closer investigation reveals a mixed picture

The case for Universal Basic Capital: a £10k grant for every 18-year-old

What if we gave young people £10,000 on their 18th birthday? In an age of growing inter-generational inequality and resentment, Julian Le Grand (LSE) explains the thinking behind an idea whose time may have come. A lot of people are going to find themselves in a precarious situation at the end of this pandemic. The ... Continue

Hands, hearts and hybrids: economic organization, individual motivation and public benefit

Should policy makers rely upon firms motivated by profit and guided by the invisible hand of the market to promote public benefit or upon government agencies or nonprofits motivated by the compassionate heart? In this article we examine how the motivational assumptions implicit in these forms of economic organisation impact on their ability to promote the public good in key areas of the economy. We argue that in many circumstances it would be better to for policy makers to work with hybrid organisations: organisations that aim for both social and economic returns and whose stakeholders display the true complexity of individual motivation

Future imperfect: behavioural economics and government paternalism

Economists and others have used the results from behavioral economics to justify paternalistic government policies, aimed at changing an individual’s behavior in the present so as to improve that individual’s well-being in the future. Examples include the automatic enrollment in pension schemes and anti-smoking measures, such as banning smoking in public places or proposals for a smoking license. But these - and the economic analyses underlying them – have been challenged on the grounds that they arbitrarily privilege one set of preferences over another. The privileged preferences include those of an ‘inner rational agent’ and those of the future over the present. This paper addresses this criticism and puts forward two new conceptions of - and justifications for – these kinds of policy