Speed limits do work, but the road should be designed with the speed limit in mind. Just slapping a new sign up and reducing the speed limit is going to lead to non-compliance - even if the speed limit is enforced by police.

The UK recently released figures on speed limit compliance. For 20mph roads (30-35kph) they primarily measured roads that didn't have traffic calming measures recommended for 20mph roads (ie the roads don't "feel" like 20mph roads), and they found 85% of drivers exceeded the speed limit.