The Agenda

A Voucherized Human Capital Investment Program

Danny Vinik of Business Insider interviews Scott Winship of the Manhattan Institute on strategies for fighting poverty, and Winship offers a number of ideas for center-right reformers wary of dramatic increases in public spending ought to pursue. He briefly references the success of the earned-income tax credit in promoting work and he floats the idea of a married parent tax credit designed to shore up two-parent families with children and to discourage out-of-wedlock child-rearing. Winship then goes on to propose a market-driven approach to human capital investment, which would go beyond school vouchers:

Another interesting approach would be to promote a voucherized human capital investment program. The idea would be that if you’re disadvantaged you qualify for a voucher that you could use for whatever services you think would most benefit your kid. That will vary by family obviously. Maybe it’s tutoring. Maybe it’s summer school. Maybe it’s an after school program. Maybe it’s violin programs. Essentially, you give folks vouchers. You create a regulated market of organizations that can receive vouchers and people who could receive the vouchers. But then you rigorously evaluate both overall approaches and individual providers and those who are ineffective at some point no longer qualify for the vouchers. What would be potentially interesting about that is you could attack this cultural element of poverty as well where people particularly in neighborhoods of concentrated poverty have kind of ended up with bad norms that inhibit mobility.

It would be voluntary so it would encourage personal responsibility as well. If parents decided not to use these vouchers then they wouldn’t help their kid at all so you’re sort of building in an incentive for them to think about their kid’s future and investing in it.

Finally, one of the benefits of it would be you would find that more programs than not fail to be effective. In some sense that would be bad because you would be throwing dollars at problems without improving things. On the other hand, it would also be a way to build concerns and recognition around the fact that a lot of what we currently do is ineffective and there’s no reason to spend money on ineffective things when we could discover things that do work and use the money there. [Emphasis added]

Winship’s ”voucherized human capital investment program” brings to mind Jim Manzi’s Uncontrolled, a book which calls for building a “test-and-learn” capacity into institutions that deliver social services so that we can gather fine-grained data on which policy interventions work under which circumstances with which populations. The political challenge with Winship’s approach is that (a) it doesn’t offer easy answers and (b) it requires lawmakers and officials to “relinquish” their power, per Neerav Kingsland’s distinction between reformers (who aim to improve the performance of centralized institutions) and relinquishers (who aim to relinquish authority over service delivery to outsiders while accepting responsibility for protecting consumers by actively policing the marketplace). 


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