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The Policy Problem Of Ceteris Paribus

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This is specifically about the probation service in Britain but it serves as an example of a rather larger problem. Just what is ceteris paribus?

OK, to those not enamoured with economic jargon the cp bit means “keeping all other things the same”. It’s an assumption in near every model. OK, so we twiddle this it here, keep everything else the same, what’s the effect? In this manner we get to work out what actually is the effect of the thing we’re doing.

So, the probation service was largely privatised. This may or may not have been a good idea. So, it has been nationalised again. This may or may not be a good idea. We’d rather like to know of course, either way with either decision.

At which point:

Renationalising the management of offenders in the community will not be enough to put right the flaws of disastrous privatisation reforms introduced by the former Conservative minister Chris Grayling, the probation watchdog has warned.

As the reunified service launches on Monday, the chief inspector of probation, Justin Russell, said the move to renationalise the service was welcome but will not be without its challenges.

Well, hmm.

Launching the reunified service, the justice secretary, Robert Buckland, said the public would be better protected and that crime would be cut, adding that more than £300m in extra funding had been pumped into the service since July 2019.

Which is where it gets interesting. If the nationalised service is going to cost £300 million more then can’t we say that the nationalised service is actually worse than the privatised one?

Except that’s not quite right. What we want is, when deciding between nationalised and private, a ceteris paribus comparison.

So, we’d like to know the outcome of four different states. Without the £300 million and private, without the £300 million and public, with £300 million and public and with and private. Only when we know the four outcomes do we have enough information to be able to decide.

Yes, obviously, we know that those four have not been studied. Which is why government isn’t a good way of doing things of course.

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