The strong case for randomised trials in policy development


Federal Budget Reaction In Canberra

Employing randomised trials to drive policymaking is gaining traction overseas. Labor’s Andrew Leigh makes the case for Australia — and calls for more innovation in the public sector.

Governments should use more randomised trials in policy development, according to federal Labor frontbencher and former economics professor Andrew Leigh.

Randomised trials are used extensively in the private sector — “you are having randomised trials done on you every time you enter a supermarket or every time you use Google”, Leigh told The Mandarin at his Parliament House office recently. New South Wales has been conducting randomised trials with letters asking people to pay fines and tax, among other things, building on the work of the British government’s Behavioural Insights Unit.

A recent NSW trial found the number of citizens paying overdue land tax jumped from 27% to 39% by introducing greater personalisation and a statement that “8/10 people pay their land tax on time” in legal notices. Other trials have included six or eight possible alternatives in the layout of websites, for example, allowing exact measurements of how customers responded to the inclusion of a photo, a logo or different text.

Leigh, Labor’s shadow assistant treasurer, says the use of randomised policy trials has been gaining traction in the United States, the United Kingdom and Sweden.

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