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Unintentional Privatization

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Conservatives opposed to government spending often argue that the market will do a better job and that public provision of goods crowds out market solutions. In some cases they are right, but there is no guarantee the market will solve the problem. Take the recent example of a government statistical program that was a casualty of this spring’s sequester.

We were disappointed when we learned that the Bureau of Labor Statistics would be shutting down its International Labor Comparisons program, which provides some of the highest-quality comparative international data on labor markets and productivity. Anyone who has worked closely with international data knows that cross-country comparison is no easy task: the multitude of different labor regulations, market types and definitions, combined with the sheer scale of aggregation make the construction of reliable data anything but easy. Important indicators in one country may simply be meaningless in another country.

It appeared for several months that the economics and policy community would just be out of luck. Fortunately, The Conference Board, a non-profit research and advising organization, has just announced that it will continue updating the series and provide the data to the public free of charge. The BLS methodology is all publically available, and the Conference Board already maintains its own international productivity dataset, so the match makes sense. In fact, this development makes the American taxpayer look like a bit of a sucker: they were paying for something that they now will get for free. Viva the free market!

Except… it’s a bit odd to call this a market solution when the private sector will be giving the information away for no charge. Presumably the Conference Board feels that the cost of updating the data on its own is balanced by the data’s usefulness for the organization’s more profitable operations—and as a reputation booster. The government and budget hawks should not expect to be so lucky in every case.

And of course, taxpayers are still forfeiting some of their rights to the data and the accountability of the data collection and production process—and ultimately it remains to be seen whether the private sector will be able to provide the level of public value that the BLS program has. However, we are optimistic that The Conference Board will be able to do a good job and we are grateful they have taken on this new responsibility.

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About the author

Ben Miller is ITIF’s Economic Growth Policy Analyst, specializing in the connection between technology, innovation, and everything else in the macroeconomy.