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Government innovation requires that policymakers are able to compare the social returns to different policies, so that they can iterate towards policies that produce higher social returns. Having comparable and reliable estimates of the social returns from alternative policies enables policymakers to ask questions like, if I were to invest an additional $1 of public funds on policy A, what would be the return on that investment? What if I were to instead invest that additional $1 on policy B? 

Experimental evidence confirms that providing policymakers with side-by-side estimates of the social returns to alternative policies increases their responsiveness to evidence. Yet currently we generally lack reliable and comparable estimates of the social returns to alternative policies. Authors of papers estimating the causal impacts of specific policies may or may not conduct cost-benefit analyses (CBA) of the social returns to those policies. Yet even when authors report CBA estimates, they are often using very different inputs and assumptions that reduce the comparability of those estimates across policies.

The Policy Impacts team at MIT has constructed a standardized metric of the social returns to alternative policies, the Marginal Value of Public Funds (MVPF). The Policy Impacts website currently reports MVPF estimates for 143 public policies. Yet this is a small fraction of the universe of potential policy alternatives.

 The Social Science Research Council is supporting the members of the College and University Fund for the Social Sciences in developing an initiative that coordinates research teams to produce MVPF estimates for alternative policy interventions across a range of policy areas. These estimates will enable policymakers to compare the social returns to a broader range of alternative policies, increasing the impact of evidence and accelerating government innovation.

Measuring the Social Returns to Government Innovation

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