In Search of Good Governance, Driven By Data

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The use of data can play a role in effective governing.


Now more than ever, policymakers can use data in their decision making, and this should vault our economy forward.

“In God we trust. All others bring data.”

So said W. Edward Demings, the famous American engineer and statistician. Bring it we must to produce better policies, cleaner politics, and a stronger economy.

Seventy years ago, in the direct aftermath of World War II, Congress approved landmark legislation setting out three simple goals for monetary, fiscal, and economic policies: to maximize employment, productivity, and purchasing power.  

Since then, policymakers have worked—quite unevenly, sometimes blindly, and often at cross purposes—to achieve this formula for prosperity. 

The objective remains as relevant and aspirational today as when it was first expressed in law. A featured question in the 2016 elections, as it is every presidential election, will be how the two candidates propose to encourage job creation, stimulate growth, and control inflation. 

What’s different today is that modernity has revolutionary new tools at our disposal. Growing mountains of big data and rapidly developing computerized analytics are able to extract practical insights on the economy and the forces that shape it.

Big data is arming society with a clearer and timelier understanding of inflation, employment, wages, productivity, and more. The Billion Prices Project @ MIT, for example, collects data from online retailers in order to provide real-time statistical insight on inflation. Similar private projects are emerging to take clearer stock of job trends.  

Big data is arming society with a clearer and timelier understanding of inflation, employment, wages, productivity, and more.

The brass ring is the development of sophisticated algorithms that can tease from digital not just how the economy is performing but the reasons why, and to help policymakers design policies and approaches that will more probably improve it. The good news is that big data comes with no (R) or (D) label. Digital insight can help us distinguish cause and effect from correlation, grasp the true consequences of current law, and perceive the likely outcomes of policy changes.

The private sector will remain at the leading edge in the art and science of capturing useful data and putting it to work. This will enable policymakers and citizenry at the federal, state, and local level to set more informed and better policies on taxes and regulations, education and training, infrastructure, the money supply, crime and instability, and the overall business environment. Same goes for regulators, as former FTC Commissioner Josh Wright has pointed out.

Government can clear the way for better governance through data by:

  • Not impeding data flows with ill-advised policies, over-regulation, or cyber-insecurity.
  • Improving our educational system to produce a STEM-ready workforce.
  • Harnessing analytics to improve legislation, and regulation.
  • Sharing open data on legislation and regulation.
  • Creating academic, commercial and governmental centers of excellence on applying data analytics to public policy.  

I had an economics teacher once who began and ended every class with a warning: “Good intentions are not enough!” This truth should be etched in granite wherever laws are made. Think of how much better our economy, lives, and political process can be when public discourse and economic decision making are based far more on facts than wishful thinking. Knowledge is a far better platform for progress than partisan conjecture and bogus promises on which politicians thrive at the expense of the Republic.