Last Updated: 7:05am, Jan 09, 2014
2013 WAS a memorable year: Malaysia saw her most intensely fought general elections, with political parties widening the already gaping divides between Barisan Nasional and Pakatan Rakyat supporters, Malays and non-Malays, and Muslims and non-Muslims. The path to reconciliation has been weak, almost paltry. If politicians expend as much effort on policy-making and governing as they do on politicking, 2014 may be a better year for all of us.
At this time last year, the nation was at a feverish pitch, having long anticipated the dissolution of parliament. Having led IDEAS’ election observation efforts that had me visiting most states in the peninsula, I had sensed an air of uncertainty, skepticism, and general mistrust during this riveting period – but all lined with some amount of hope. As we enter the new year, there seems to be a similar buzz amongst Malaysians – but with, perhaps, less hope this time around – about the impending increases in the cost of living.
The rising cost of living is not a new political issue; it was a common discussion topic at ceramah sessions for both the 2008 and 2013 elections. That it has today become a central narrative amongst most Malaysians is telling that previous attempts at resolving this problem have been, at best, cosmetic.
Prior to the mild austerity measures announced last week, the government’s efforts to assist the most disadvantaged Malaysian families cope with rising living costs have been primarily through the Bantuan Rakyat 1Malaysia (BR1M) programme, introduced by the Datuk Seri Najib Razak’s administration in 2012.
Billions have been spent so far, and billions more will be spent on the programme in the years ahead. Amidst accusations that BR1M is a legal method of vote-buying, countered with happy images on BR1M’s webpage of folk grinning broadly (displaying their ang pows from the government – or more aptly, from taxpayers), lies a simple question: Is BR1M helping the poorest of Malaysians face this painful rise of living costs? Simply put, is BR1M working?
At first, this question appears simple, almost rudimentary. But speak to any experienced bureaucrat, and they will tell you that any and all policies are riddled with a myriad of challenges and unintended consequences when it comes to implementation. Cash transfers to the poor – which is essentially what BR1M is – may be spent on alcohol, gambling, or perhaps even the latest iPhone.
How the cash is dispensed also matters; the system and processes need to account for the selfish Malaysians – the ones who under-declare their income and use the cash handouts for brand new Astro subscriptions.
My point is this: as responsible citizens, we need to know if our national policies are working. As taxpayers, we need to know if BR1M is working. And instead of relying on politicians to tell us the answers, we should demand answers based on evidence.
The reason for this is simple – when tested empirically, there are surprises and lessons to learn in even the most simple of interventions. Simple interventions can have profound impact – and major interventions, such as BR1M, could possibly have effects that fall far from its original intentions.
Experimental testing through randomised control trials has become the gold standard of policy evaluation in many countries. In its essence, the idea is simple: to assess the impact of a programme, such as BR1M, we need to know how the intended beneficiaries would have been impacted without the programme.
To do this, we observe and track the impact of two groups of individuals: one group that receives the intervention (the treatment group, in this case those who receive BR1M aid) and another group with similar characteristics that does not (the control group – in this case those who do not receive BR1M aid).
At the end of the intervention, we would then compare the performance of our two groups and see if the control group is doing better. This would provide us with an estimate of BR1M’s true impact, and not the impact as proclaimed by politicians on either side of the divide.
In 1997, the Mexican government implemented a cash transfer programme called PROGRESA, that provided cash transfers to households conditional on children attending school at least 85% of the time. The policy met its objectives and has become a huge success. A cash transfer programme in Malawi aimed at addressing the rise of HIV-AIDS cases, however, led to more recipients engaging in risky sex.
These examples point to a fact that policy-makers have known for decades – the impact of cash out policies such as BR1M is highly contextual. Cash transfer policies have worked well in some countries, and less well or not at all in others.
Typically, they have had the most impact on the poorest households whom struggle with basic amenities, and with the objective of incentivising socially desirable behaviour change. In contrast BR1M serves households with monthly incomes of RM4,000 and below, and with the objective of addressing the rising cost of living. The disparate aims of these programmes, and their target audiences, make BR1M’s impact evaluation all the more urgent. With the absence of evidence, how do policy-makers decide whether or not the policy should continue?
Last month, I attended the 10th anniversary of MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL), whose founders pioneered the approach of randomised control trials for social policies. Today, their completed evaluations number 440, spanning both developed and developing countries, including several of our less affluent Southeast Asian neighbours, such as the Philippines, Cambodia and Indonesia.
With BR1M expected to impact around 5.2 million households this year, comprising a whopping 80% of all Malaysians, taxpayers really need to know if this is a programme that meets its objectives.
Despite the massive scale of BR1M’s intervention, its impact remains largely untested, and this is troubling. Faced with mounting debt, and less money in the bank, we should spend our money on policies that work, and throw out those that don’t. Organisations like J-PAL can help us figure out these answers.
Rigorous evaluation has the potential to add richly to the policy debate in Malaysia, and can be used to assess a wide variety of policies as well as their relative merits. To increase student outcomes, should we recruit top talent as teachers, or should we train existing teachers instead? To reduce crime, should we increase the number of police patrols on the streets, or should we invest in more security cameras?
My wish for the year is for parliamentarians to demand answers to these questions, and demand the availability of rigorous, high quality policy evaluations. Our resources are finite, and it is in our country’s best interest for the government to start behaving and spending in a manner that reflects this reality. Perhaps 2014 could be the year that we move towards evidence-based policy making, instead of “policy-based evidence making”.
Keeran Sivarajah is a graduate student at Harvard University, where he is a Wendy and Philip Kistler Fellow. He is a co-founder of Teach For Malaysia and an associate of the Institute for Democracy and Economic Affairs.
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