Everybody wants progress; nobody wants change

Alain Bertaud once told me, ruefully, that he was part of a failed effort at the World Bank to end the implicit subsidy for car trips created by the Bank’s offer of free employee parking. This proposal generated complaints, but that does not mean that it was a bad idea. If Steve Jobs had followed a strategy of avoiding all complaints, my MacBook Pro would still have an optical disk drive. Examples like these suggest a general lesson about cooperation in large groups:

Everyone wants progress.
Nobody wants change.

I will learn some of the details of the reorganization that the World Bank has been through once I am on site, but I take it as a good sign that the Bank is the type of organization that is generating complaints. It would have been a deal-breaker for me if I had been asked to buy into a culture of complacent paralysis. See this post for more thoughts on the difference between conditional optimism (good) and complacent optimism (bad.)

At NYU, I helped build the Marron Institute of Urban Management. In two ways, it is an unusual academic entity. First, it uses the city as the basic unit of analysis in place of the nation or the business. Second, instead of giving its faculty members the usual freedom to study anything that that seems interesting, the institute lets the problems that cities face set its research agenda. Because these choices are not the usual ones on campus, many people complained. I am proud of the work that the people working at the institute are doing. I appreciate the bet that Don Marron made on the value that could come from letting a new academic flower bloom; and the fortitude that NYU’s president and provost displayed in protecting this flower as put down roots.

As just one illustration of the value that such a unit can offer, Solly Angel is producing estimates that we never had before about such simple questions as the worldwide fraction of urban housing units that are informal, public, and private formal; and the worldwide fraction of urban expansion that is disorganized as opposed to being minimally planned.

When we embarked on this data collection effort, it was easier to get support from UN-Habitat than from the World Bank because the Bank was divided into groups that focused on specific regions, none of which had a mandate that could embrace the global population of cities. After Jim Kim took over as president of the Bank, he restructured it to shift the emphasis from regions to issues. I do not know the costs of this change, but for those of us working on the outside, the intellectual and practical benefits were large and obvious.

Organizations that generate no complaints are dead in the water. The question to ask about the organizations that do generate complaints is how they handle them. When a small minority of people complained about Apple’s decision to stop putting optical disk drives in portable computers, Apple persevered because this decision offered benefits for the vast majority of users. (Naturally, those of us who benefited did not speak up to say thanks.) In contrast, when lots of people complained because Apple Maps was a terrible piece of software, Apple worked to fix it … eventually.

These two episodes illustrate two general types of complaint. One arises when a change offers a windfall gain for some and imposes an undeserved cost on others. If the costs per person are small and the winners outnumber the losers, the best course is to persevere. But if the change offers net benefits but imposes large costs on many, it is worth finding ways to redress the split of gains and losses.

One of the most difficult judgments for an organization (or a nation) is how to draw the line that separates the cases that call for perseverance and those that require redress. An increase in international trade is a good example of a change that could increase income for a nation and impose either small costs on a few or large costs on many. Economists may have been slow to recognize that trade is now imposing larger costs on more people. As a result, we may have been too slow to take up the practical challenge of how to adjust the division between winners and losers of the total increase in national income.

The other type of complaint comes when the search for progress encourages experiments. (It should.) Complaints may be a valuable signal that one of these experiments has turned out badly. (Some will.)

When complaints show that something is not working, a healthy organization will make a change, perhaps after allowing enough time to collect a meaningful data sample.

I would never join a university that cannot abide a constant buzz of faculty complaints. (When I was at UC Berkeley, the joke was that the faculty is a group of free thinkers bound together by a shared grievance about parking.) I would not invest my retirement funds in a firm whose leaders took the absence of complaints as a reliable day-to-day indicator that they are making wise decisions. I would never work for an organization that advises the leaders of developing countries not to pursue any policy that causes some citizens to complain. As a soon-to-be member of the World Bank community, I’m glad that it will have the credibility that comes from taking its own medicine.

If I contribute anything useful to the Bank’s mission, I will inevitably generate some additional complaints. The way to judge me will be to see if I listen and assess how I respond, particularly when they reveal that something I propose is not working.

Who knows? Once I get there, I might have some complaints of my own. Which reminds me, what is the deal about parking?