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Government Takes a Page from the Smart
Business Playbook


By Gary VanLandingham

Fall 2013

Jack Welch, the former CEO of General Electric Co., believes that an organization’s ability to learn—and to translate that learning into action—is the ultimate competitive advantage.

Most successful businesses practice what Welch preaches. They learn the facts, understand the risks, and make well-informed decisions. States, however, often make budgetary and policy choices based on few facts, outdated assumptions, and ineffective analytical tools. That’s why states are increasingly turning to The Pew-MacArthur Results First Initiative (Results First).

Results First uses a cutting-edge analysis developed by the Washington State Institute for Public Policy. The initiative currently works with 14 states to implement the kind of cost-benefit analysis that businesses have long relied on.

The Results First model is a nonpartisan, evidence-based approach based on data from hundreds of programs that provides states with an apples-to-apples comparison of different policy options to help them make the best use of their limited tax dollars. The model:

  • Calculates the potential return on investment of different policies
  • Predicts the risk of investments in these programs
  • Ranks projected benefits and costs
  • Identifies ineffective programs
  • Assesses the combined benefits and costs of a full portfolio of policies.

Currently, the Results First cost-benefit process is being used primarily to analyze crime prevention and treatment programs. In Washington State, which has the most experience with the model, policymakers invested in proven crime-prevention and treatment programs that contributed to reduced rates of crime, juvenile arrests, and incarceration—and the rates dropped more than the national average. These investments will achieve about $2.7 billion in savings over a period of 50 years, starting in 2000, for Washington State residents. Many of the benefits are being realized quickly; others will occur over a longer period of time, including higher lifetime earnings for people who participate in the programs. As the use of the Results First model expands, it can also guide the allocation of funds for education, child welfare, substance abuse, and mental health programs.

In almost any state capitol you might hear someone say that government needs to run more like a business. State leaders understand they have a lot to learn from the business community about managing risk, weighing benefits and costs, and evaluating outcomes. This puts business executives in a strong position to talk to governors and legislators about joining The Pew-MacArthur Results First Initiative. Businesses need an educated workforce, safe communities, and modern infrastructure. By supporting Results First, businesses will help states find the most cost-effective path to reach these critical goals.

Gary VanLandingham is director of the Pew-MacArthur Results First Initiative, which works with states to implement an innovative cost-benefit analysis and to cultivate a climate for evidence-based decision-making that can enable states to eliminate ineffective programs and shift resources to those that generate the best outcomes. To learn more about Results First and how you can induce state leaders to use available data to make smarter spending decisions, go to http://goo.gl/LP6MyL.

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Business Playbook
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