REPLY SD Impact on National Government Policies (SD6107)

[Jim Thompson james.thompson strath.ac.uk]

Posted by  Jim Thompson <james.thompson at strath.ac.uk>
Louis Macovsky wrote "I am curious to know to what extent has SD played, 
if any, in decision making and management at the Federal level other than 
in the military." That is a difficult question to answer without a thorough 
survey since assessing impact on social policy decisions and management is 
subjective. 

In the late 1990s I consulted to a consortium of pharmaceuticals firms on the 
economic impact of a proposed initiative to detect and treat hypertension in 
Italy.  We chose the region of Ravenna to study the incidence and prevalence 
of hypertension and likely influence of that disease on acute events including 
heart attacks and stroke.  That work produced some useful insights into hospital 
capacity planning, the economics of public health policies and the like.  I 
retain the exploratory models and underlying data, but I do not have a copy of 
the final report.  As I understand, our work influenced legislation to extensively 
modify public health policy and substantially increase efforts to detect and treat 
hypertension.  If anyone is interested in the simulation model development, 
please contact me directly.

A few years earlier, Jim Hines and I participated in a methodology assessment of 
system dynamics done by the Government Accountability Office (GAO).  The question 
was how to design federal financial guarantee programs to be more robust and less 
prone to problems.  We chose to study the single-family housing finance market as a 
prominent example of a large and complicated marketplace affected by various forms 
of federal financial guarantees, e.g. Fannie Mae, Ginnie Mae, VA, FHA, FDIC.  In 
essence, our work helped to define the problems caused by a system of federal financial 
guarantees and provided insight on how to avoid those problems.

In addition to providing the GAO with an example of the application of system dynamics 
for methodology assessment, results of our work were reported to the Senate Committee 
on Governmental Affairs, which was considering privatizing the federal interstate road 
system and providing guarantees for financing the transactions.  It is difficult to 
assess the impact of our work on the decisions taken by the Committee, but we pointed 
out that such guarantees are a primary cause of price inflation and pose other significant 
challenges.

In their final report, the GAO methodology assessment team made several egregious errors 
which Jim and I were not able to have corrected.  Nevertheless, the entire engagement was 
a successful application of the methodology to policy design and testing at the federal 
level.  Given that the work was done quite awhile ago, it may be difficult to access copies 
of our work or the GAO report.  If anyone is interested in our work or the final report, 
please contact me and I will try to supply you with copies in the public domain.

Regards,
Jim Thompson
Posted by  Jim Thompson <james.thompson at strath.ac.uk>
posting date  Wed, 13 Dec 2006 11:52:02 -0500