There could be solutions to this, I'm sure, or at least ways of minimising the problems.

I'm sure there could be. It's not an easy problem to solve - after all, right now, there are professors in social sciences, economics, and other subjects who can tell pretty quickly whether or not a given policy is at least vaguely sensible or not. But how often are they listened to?

Also, it's not always easy to see which option is the best. If Policy A might or might not reduce crime but makes it look like everyone's trying; Policy B will reduce crime but also reduce civil liberties; Policy C will reduce the amount of crime but increase its potential lethality... then how can one tell which policy is the best?

Having said that... there should be solutions. Your proposed institute is an improvement on the status quo, and would be a good thing to set up in many countries (assuming that they can be funded).