The Fundamental Problem
Government traditionally budgets and evaluates programs based on INPUTS:
- How much money was spent?
- How many employees were hired?
- How many services were delivered?
This tells us nothing about whether programs actually WORK. Outcome-based government asks different questions:
- Did student test scores improve?
- Did crime rates decline?
- Did health outcomes get better?
- Did water quality improve?
Core Principles of Outcome-Based Budgeting
Define Measurable Outcomes
Every program must have specific, measurable goals. Not "provide job training" but "increase employment rates among participants by X%."
Track Performance Continuously
Real-time data collection allows course corrections, not just end-of-year reports.
Shift Resources Toward What Works
Programs demonstrating results get expanded; programs failing to deliver get reformed or eliminated.
Publish Everything
Performance data should be publicly available so citizens can evaluate government effectiveness.
Build in Evaluation from the Start
New programs should include evaluation design from day one, including control groups where feasible.
Implementation Mechanisms
Performance-Based Contracts
Pay contractors based on outcomes achieved, not services delivered.
Example: Pay job training provider bonus for each participant who maintains employment for 12+ months.
Shifts risk to provider, incentivizes effectiveness.
Randomized Controlled Trials (RCTs)
Gold standard for determining program effectiveness.
- Randomly assign eligible population to receive program or not
- Compare outcomes between groups
- Federal "What Works Clearinghouse" maintains database of evidence-based programs
Pay for Success / Social Impact Bonds
- Private investors fund program implementation
- Government pays investors only if program achieves specified outcomes
- Taxpayers protected from funding ineffective programs
- Investors bear risk but can earn return if program succeeds
Automatic Sunset Provisions
- Programs automatically expire after set period unless affirmatively renewed
- Renewal requires evidence of effectiveness
- Forces regular evaluation rather than perpetual continuation
Application to NY-01 Issues
- Outcome metric: Nitrogen levels in groundwater and bays (measured in mg/L)
- Track: Number of septic systems upgraded, but ALSO actual water quality improvement
- Shift resources: To interventions showing greatest nitrogen reduction per dollar
- Outcome metrics: Net new units built, affordability (price-to-income ratio), out-migration rates
- Track: Not just permits issued but actual completed units and occupancy
- Evaluate: Which incentive programs produce most housing per dollar invested
- Outcome metrics: Test scores, graduation rates, post-graduation employment/college enrollment
- Track: Not just spending per pupil but value-added by schools
- Identify and replicate: High-performing programs