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The law of unintended consequences

Be careful when making policy, you may get a response you didn't plan for.

The law of unintended consequences suggests that any intervention may or may not have the intended result, but will inevitably have unanticipated outcomes. Sometimes, these outcomes are positive. The Korean demilitarised zone, for instance, has become a wildlife sanctuary. And it has been claimed that legalised abortion in the US accounted for much of the drop in crime in the 1990s, though this is disputed.

More worrying are the unintended negative outcomes. Drugs can obviously have bad side effects. On US television, adverts for prescription drugs urge you to go to your doctor and tell him to prescribe you this drug for acid reflux, or blocked arteries, or whatever, even though you are, say, a plumber with no medical training. But then someone quietly reminds you of the awful side effects, which might include dizziness, diarrhoea, constipation, depression and, on rare occasions, death. Sounds great; must rush out to get some.

I began thinking about all this after reading an NBER working paper by Christopher Carpenter and Mark Stehr titled Intended and Unintended Effects of Youth Bicycle Helmet Laws. More than 20 states in the US have adopted laws requiring young people to wear a helmet when riding a bicycle. The authors found that these laws increased helmet use and reduced youth fatalities from cycling accidents by roughly 19 per cent, which is a good thing. But they also found that the laws significantly reduced, by between 4 and 5 per cent, the amount of cycling done by young people, which was not the intention.

It's possible that the kids simply took up other sports, such as skateboarding or inline skating, for which they were not legally mandated to wear helmets. Helmet laws change the relative prices among these activities.

The moral of this tale is to be careful when making policy, as you may get a response you didn't plan for.

Good citations

A recent letter to the Guardian, signed by 20 economic historians, warned against making immediate cuts in public spending. The experts argued that, in both historical and international contexts, Britain's level of public debt is relatively low. They urged the next government not to slash public spending in the short to medium term, but instead to support knowledge-based growth, which they argued can help to drive economic recovery. I have much sympathy with that view.

One sentence in particular caught my attention: "The next government should develop a constructive strategy for growth, capitalising on the UK's clear advantage as the home of four of the world's top ten universities, to invest in its role as an international hub for learning, science, innovation, advanced study and green jobs."

I am all for investing in the knowledge economy, but four of the world's top ten universities in the UK? That couldn't be right. The unintended consequence of this letter was that I checked up on this and, lo and behold, according to the latest US News and World Report ranking, they are right. It rates Cambridge (second), University College London (fourth), Imperial College (fifth) and Oxford (joint fifth) among the world's best universities, ahead of Chicago (seventh), Princeton (eighth), MIT (ninth) and Stanford (16th). Surely not, though?

I checked the Academic Ranking of World Universities (ARWU), compiled by Shanghai Jiao Tong University. This index places only five UK universities in the top 50. Cambridge is fourth, Oxford tenth, University College London 21st, Imperial 26th and Manchester 41st. Seventeen of the top 20 places are taken by US universities. I spend a good part of my time visiting universities, on both sides of the pond, and this index is much more believable.

What accounts for the difference? The ARWU index is based primarily on the quality of research done at a university. It weights heavily the receipt of Nobel Prizes and academic medals, as well as the number of papers published in the top two scientific journals, Science and Nature. It also gives heavy weight to citations of papers published by its faculty members, and to the presence at a university of highly cited researchers.

Citations are a good measure of quality. Academics who publish nothing are not cited; worthless papers are never cited, but great papers are cited a lot. A significant proportion of academic papers are never cited by anyone, but some are cited many thousands of times.

Prize possessions

The US News and World Report index does not provide an appropriate measure of the quality of universities and should be ignored. Almost a third of the score is based on the student-to-faculty ratio and the proportion of both international faculty and overseas students, which is laughable as they tell us zero about quality. Other questionable measures that are used underweight the importance of current scholarship. This is an index that penalises the best to help the mediocre. We should judge our universities on the quality and quantity of the research that they produce. Period.

The index gives a weight of zero to the receipt of a Nobel prize, or a distinguished award, or having a highly cited researcher. To me, none of this makes sense. There is no special place in these rankings for multiple Nobel prizewinners - today's equivalents of Marie Sklodowska-Curie, who received the Nobel Prize in Physics in 1903 for the discovery of radioactivity and the Nobel Prize in Chemistry in 1911 for isolating pure radium. Or for John Bardeen, who received the physics prize twice: first, in 1956, for the invention of the transistor; and then, in 1972, for the theory of superconductivity. A university's reputation is driven mostly by the quality of the output of its best two or three researchers.

The UK is not home to four of the top ten universities in the world, sorry. But that is what we should be aiming for. All of this strengthens - rather than weakens - the main point made by the 20 economic historians: that it is vital we invest in learning, science, innovation, advanced study and green jobs. My economic historian colleagues are right to argue that further public spending cuts which would endanger such knowledge-based growth should be ruled out. Especially when it comes to research on bicycle helmets.

David Blanchflower is Bruce V Rauner Professor of Economics at Dartmouth College, New Hampshire, and the University of Stirling

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 15 March 2010 issue of the New Statesman, Falklands II