Set measurable targets to see if policies are working

I refer to Mr Goh Bun Hiong’s commentary “Tax policies should take aim at specific behaviours” (Feb 22).

He said that the overriding criterion in designing effective policies is to ensure that the incidence of reward or burden is ultimately borne by the correct party exhibiting the targeted behaviour. This raises a question: How “targeted” are the policies in our Budgets over the years?

Although issues and social-demographic specifics are getting more complex, the use of a common denominator or criterion in the reward and burden structure in our Budget, such as dwelling type, is still prevalent.

Another question: How rigorous are we in monitoring the effectiveness of policies and their execution?

We cannot rely too much on opinion surveys to formulate policies. In surveys, people tend to ask for more benefits or rewards. But would giving more benefits and rewards translate into the outcomes we aim to achieve?

For example, has the enhanced Marriage and Parenthood package been effective in spurring more births in the last two or three years?

Statistical procedures like hypothesis testing, simple linear regression and correlation, multivariate analysis or econometric modelling, among others, could be used to help formulate more effective policies.

With competition for Budget allocation among ministries getting more acute, a fair evaluation of the efficacy of fiscal spending is needed more than before. Policymakers should try to set measurable targets for policies, especially new ones, such as the schemes for achieving the Committee on the Future Economy’s seven strategies.

Conceptual policies that are not quantifiable may be subject to different interpretations by different administrators or targets.

Through better target setting and monitoring, we can make more transparent and objective periodic evaluations of policies, enabling us to pinpoint and correct any weakness or shortfall more easily and faster. In the bigger picture, the application of a more advanced approach to formulating and monitoring policies is imperative to enhancing our global competitiveness.