Polity by Rob Salmond


Behavioural economics and Hekia Parata

After getting rebuffed trying to increase class sizes in 2012, Hekia Parata is trying to foist them on parents by stealth in 2016. But I think her plan is doomed to fail.

Parata’s latest foray comes in the form of the so-called “global budgets,” where schools get one overall budget allocation to cover everything from teacher salaries to sports equipment, and are free to allocate the funds as they like, subject to collective agreements about salary scales and so on.

This is basically the old “bulk funding” model National tried to roll out in the 1990s with very limited success.

Teachers have responded to the proposal by saying it stinks because it will force schools to have larger class sizes when the government grants don’t keep up with cost pressures. And, when parents express their outrage over all this, the government whose underfunding was the ultimate cause of the bigger classes will be nowhere to be found. “The school made the decision, not us!” they’ll say.

I don’t think global budgets will necessarily lead to that chain of events, because behavioural science suggests it could lead to other harms instead.

To see why, let’s start with two central ideas in behavioural economics: 

  1. People respond to incentives.
  2. Therefore, policymakers should give people an incentive to do the right thing. (This is the central point of Nudge.)

I’ve got in trouble with teachers before for suggesting that they, like others, respond to incentives. I’m unrepentant on that front.

The yawning problem with Parata’s global budgets is that they give teachers a clear, actionable incentive to do the wrong thing, namely to make kids’ education worse outside the classroom.

With a global budget, bigger allocations going to staff salaries increases job security for all current staff, as there’s less pressure to cut people in order to make room in the budget.

And the less the school spends on “cherry on top” programmes for kids, from music to sport to drama, the more is left over for staff salaries, keeping people employed and class sizes down.

But the impetus for cherry on top programs often comes from the teachers themselves. If a school has a jazz band, it’s normally because a teacher put their hand up to coach it, did the research and shopping for the instruments, and so on.

With the global budget proposal, Hekia Parata has given teachers a clear incentive to stop pushing for student enrichment programs, and to oppose any programs other teachers might propose.

The more limited those programs, the more money is left aside for staffing, the more secure is everyone’s job, and the smaller is each class.

If the global budgets proposal comes to pass, I expect you’ll see schools eeking out their materials for longer, reducing investment in extra-curricular activities, and otherwise battening down the hatches.

It won’t be any kind of explicit, Machiavellian plot to screw the kids. I don’t think teachers have that mindset in them.

Instead, it’s a death by a thousand subconscious cuts, as people fail to summon the energy to drive an enrichment project that may help children on the margin, but may also make their jobs, and their colleagues’ jobs, less secure.

The result will be a lesser educational experience for the kids.

Now, to be crystal clear, I think that’s a tragic outcome. I don’t support it or suggest it. And that’s because nobody – nobody – gets what they want.

Behind its generalized patter about choice, National wants bigger class sizes to spring up organically out of global budgets, so they can’t be blamed for it. But teachers will thwart that.

Parents want all the school’s energy to go into enlightening their children and enriching those kids’ lives, and they won’t get that, either.

Teachers want to do right by kids, which they’d prefer to do both through smaller classes with more personal contact, and through great enrichment programmes.  Sadly, the Global Budget proposal forces them to choose between the two.

In 2010, David Cameron put together a “Nudge unit” to advise on government policymaking from a behavioural point of view. Methinks its past time John Key followed suit.

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