Wednesday, October 12, 2011

Batting averages for economic consultants?

Nearly every new proposal for corporate welfare is accompanied by a study claiming huge benefits from the use of taxpayer money to subsidize a private business.  Despite the frequent failures of projects to deliver the promised benefits, each new study is presented with as much confidence as the last.  In light of this, Audrey Spalding of the Show-Me Institute proposes that "(c)onsulting organizations should report their track record of success (and failure)."
What if every estimate of job and investment creation the RCGA publishes had to be accompanied with a percentage showing the accuracy of previous estimates the agency predicted? What if, when contemplating creating new tax credit programs, we considered whether existing programs delivered on the promises used to create them?
If we are considering whether hundreds of millions of taxpayer dollars should be allocated to a particular project, it is not enough to take proponents’ claims for fact, especially if those organizations have a track record of poor prediction. We need to know how frequently those predictions actually become reality.