Governments are very poorly run orgainizations

Great Debates
21

[QUOTE=Sam Stone]
Governments are very different from large businesses. Large businesses have to justify every decision they make to their shareholders, and as a result every manager up and down the chain has to justify his/her decisions to the next manager up the line. There is intensive scrutiny on all decisions all the time.

Here’s an old trope worth revisiting. In order of efficiency:

  1. Spending your own money on your own things. You have an incentive to spend the least possible, and to extract the most value for each dollar.

  2. Spending your own money on other people. You still have an incentive to control spending, but you won’t focus as much on whether there is real value in what you buy.

  3. Spending other people’s money on things for other people. Now you have little incentive to either control spending or to make sure you buy things of value.

Government fits into the third category. The politicians take your money and spend money oon your behalf. They have neither the incentive to conserve nor an incentive to get maximum value for your dollars. Thus they are controlled by secondary effects - the votes of the people, the amount of financing they can raise from special interests, etc.

Politicians routinely spend billions of dollars on ‘earmarks’ - things that neither the government requested or the people asked for, but which benefit them specifically by helping special interests. Do you know what would happen to a manager in a large company if he allocated 233 million dollars to a bridge that wasn’t in the company’s fiscal plan and which had no customers? He’d be cashiered on the spot. In government, if you pull that stunt you get funding by the people who benefit from the bridge, which you can then use to buy advertising to convince the people you’re a good guy and stay elected.

This is just one of the many forms of corruption and inefficiency that is unique to government. There are many more.
[/QUOTE]
You have in this post confused and mixed a number of different things. Let’s start with 2: Government Policy and Executive Administration. It is certainly the case that governments decide on policies for reasons that are ‘earmarks’ , poorly thought out, or if you prefer ‘corrupt’. However the OP is not concerned with the quality of the decisions that are made, but with their execution, i.e. the administration of those decisions by the executive.

That is an altogether different debate, whether governments execute policies or deliver services more efficiently than private businesses would do so. I think the current thinking is that government business enterprises are a bad idea. That is private business is the best vehicle for operating an enterprise for profit.

Leaving that aside the more fertile question is whether a government program can deliver services more efficiently than private enterprise. The answer must depend to an extent on how you propose to measure efficiency.

To brass tacks, by most measures the delivery of health services in the US is markedly less efficient than single payer schemes administered by governments elsewhere. However, some regard the proper outcome of medical services as maximising the private sector income in providing those services. In that respect the US is nonpareil.

Education might be one example where the end user satisfaction is lower when the provider is a government. One factor which might be at the heart of these differences is the substantial efficiencies that follow from a single purchaser. In health and defence this works well. Whereas in education there are obviously fewer benefits gained by having a single purchaser. So that might be a way of testing the proposition in specific cases. Whether uniform and general standards at the purchase stage will create efficiencies.

22

[QUOTE=Sam Stone]
There is a much more fundamental reason why governments are inherently inefficient - lack of information. This is a big, big deal. Governments simply don’t have the ability to gather the information required to make efficient decisions. The economy is far too complex and dynamic for a central authority to maintain control of it.
[/QUOTE]

Why are governments different in this regard. Aside from the scale of the problem, businesses face these things everyday. Consider two video game systems: The Wii and the Virtual-Boy. Same company, yet one bombed, and they can’t make enough of the other to satisfy demand. How is the position Nintendo is operating out of fundamentally different from the government’s? They are never sure whether they will have a warehouse full of systems, or whether they won’t be able to satisfy people’s needs.

[QUOTE=Sam Stone]
For example, consider a case where the state allocates hammers as needed. How do they do that? Do you just apply for a hammer and get one? If so, what’s to stop everyone for applying for a hammer, just in case they need one? But there aren’t enough hammers for everyone, so some people who really need them don’t get them, and other people who don’t need them get lots.
[/QUOTE]

Perhaps. But most people don’t just get things because they are “free” or are subsidized just to get them. There is a cost to such frivolity. In this case, carrying and storing a hammer you will never lose. For the same reason most people don’t aspire to go on welfare, go to the dentist everyday (in countries with universal health care), or ride the bus everywhere. There may be some cases where this is true, but it’s not always so black and white.

[QUOTE=Sam Stone]
Another reason people can’t know - the value of a hammer only matters in respect to the value of the other things you have or can earn. But if there is no price on anything, even that bit of information remains hidden.
[/QUOTE]

Why would nothing have a price? I’m not sure I’m understanding you. Even in your hammer analogy, there are presumably other hammers for sale (from other people), and taxes collected to pay for the gov’t hammers, right? Isn’t they value directly correlated to the value of similar goods and/or the taxes collected.

[QUOTE=Sam Stone]
Now consider what happens under capitalism - someone makes a hammer, and offers it for sale. Two people want one, but one wants it more than the other and bids him out. Efficiency is retained - the person who needed it got it.
[/QUOTE]

Well, the person who could afford it got it. This may be a semantics thing, but just cause you can afford something doesn’t mean you “need” it more. If they start selling organs, I don’t necessarily think the rich people that can afford them need them more.

23

[QUOTE=Sam Stone]
There is a much more fundamental reason why governments are inherently inefficient - lack of information. This is a big, big deal. Governments simply don’t have the ability to gather the information required to make efficient decisions. The economy is far too complex and dynamic for a central authority to maintain control of it.

Furthermore, even if they were really, really smart and had supercomputers and all kinds of other technology, they still wouldn’t have enough information required to govern efficiently - because the information isn’t known by anyone until the forces of the market uncover it.

For example, consider a case where the state allocates hammers as needed. How do they do that? Do you just apply for a hammer and get one? If so, what’s to stop everyone for applying for a hammer, just in case they need one? But there aren’t enough hammers for everyone, so some people who really need them don’t get them, and other people who don’t need them get lots.

Now imagine that your benevolent central manager begs people to please only ask for hammers if they really need them. And let’s further stipulate that the people are the model of communist selflessness, and are really trying to determine if they need a hammer. How do they know? Because the question is relative. The only way you can really know if you should be the one who needs a hammer the most is to know the needs of others, which you can’t see. So now you have to apply an absolute judgement - my hammer is getting old, it’s too small for the pictures I have to hang… does that mean I should get one? Sure, why not?

In the meantime, there’s a boot cobbler down the street going out of business because he lacks a hammer.

Another reason people can’t know - the value of a hammer only matters in respect to the value of the other things you have or can earn. But if there is no price on anything, even that bit of information remains hidden.

Now consider what happens under capitalism - someone makes a hammer, and offers it for sale. Two people want one, but one wants it more than the other and bids him out. Efficiency is retained - the person who needed it most got it. Also, the high vaue on the hammer stimulates people to make more hammers (and more steel to make the hammers, and more mining equipment needed to mine the ore to make the steel to make the hammer, and…) Prices transmit information about scarcity and demand precisely to those who need it, and the prices reflect the aggregate value that people place on items with respect to other items. Information is uncovered that would simply not be available any other way.

Here’s an excellent essay by Friedrich Hayek discussing information flow and the economy: The Use of Information in Society.

Information in a free economy bubbles up from the bottom and radiates through society. Changes in the supply and demand of myriad products are reflected back through the price system to the people who need to know. There is negative feedback - imbalances in supply and demand push the system back to equilibrium.

Central command is like balancing a pencil on your finger. Give the economy a push, observe what happens, Attempt to correct for the problems caused by the first push by pushing the other way. You wind up with an endless series of shortages and gluts, disincentives and wasted production. It’s an inevitable result of the nature of centralized command.
[/QUOTE]
You seem to be confusing ‘totalitarian Communism’ and ‘government’. The majority of the various governments don’t try to micromanage society down to the level of such things as who gets hammers and don’t, so your whole post misses the target.

And like it or not, governments are as efficient or more so at any number of things as private enterprise. Otherwise, for example, we’d have an all-mercenary army. And all the studies I’ve heard of show that our free market focused health care system is less efficient and for most people less effective than the evil, evil government run versions. And so forth. The free market is a tool, and there’s no such thing as a universal tool. It is no more always the best solution than government is always the best solution.

24

[QUOTE=Stranger On A Train]
Two words: benevolent dictatorship.

It doesn’t happen very often, but when it does, it works pretty well. Of course, when it doesn’t, you end up with things like the Great Purges, the Cultural Revolution, and Year Zero.
[/QUOTE]

We have a benevolent dictatorship. It works ok, but the local culture tends to be reactionary rather then really planning ahead. Certainly getting gov’t things done here is more efficient than in Central/Eastern Europe.

25

[QUOTE=DanBlather]
I guess I’d like a cite that govts are poorly run and efficient compared to private business. i worked for a large, profitable corporation for 20 years and only one project I worked on ever shipped.
[/QUOTE]

Who were your customers? Government contracts possibly?

26

[QUOTE=What the … !!!]
Agreed?

If so … why?

What steps could be taken to make the federal governement more efficient and less wasteful? Things a politician could run on and put in place in four years.
[/QUOTE]

The Federal government cannot be made more efficient. It will eventually bloat to the point where no actual services are rendered and it will then collapse. This is more or less the history of every such structure that has not been collapsed externally.

The reason is that government structure is self-perpetuating in terms of budgets and employees. Once a given structure is created, the structure itself is impossible to eliminate. If it does a poor job of doing its original mission, a new structure is created which is in addition to, but not in place of, the original structure. The only incentive is to spend your entire budget in order that you may ask for a larger one next year.

If budgets are cut externally, the structure cuts services before structure. Cuts in those services create incentive for the recipients to demand restoration of the budget and prevent cutting that structure out of the budget. So for instance if there were an Office of Keeping Bridges Under Repair that had $10M dollars of which only $2M was actually repairing bridges and their budget was reduced, you can be sure even less than $2M will go to repairing bridges, hollering will begin, and the budget restored.

For elected officials, there is absolutely no chance they can cut the Federal Budget. Our electorate has long since abandoned the notion that they should seek what they can do for their country. The question has become: How can I best get my share–more than my share if possible? Since we can vote ourselves services from the public coffer, and since we have allowed the government to borrow from the future, we will elect only representatives who are willing to do that.

The proper solution is to have a Federal budget which allocates a percentage of total tax revenue to each area rather than a dollar amount. It is way too late to put that structure in place.

We are living in a house of cards and the wind is blowing.

27

[QUOTE=Chief Pedant]
It will eventually bloat to the point where no actual services are rendered and it will then collapse. This is more or less the history of every such structure that has not been collapsed externally.
[/QUOTE]
Huh ? Examples ? I can’t recall a single example of that happening, much less it being normal.

28

[QUOTE=What the … !!!]
If so … why?
[/QUOTE]

Because all large organizations are poorly run.

The question is, is it really a bad thing?

29

The example of the Government of the United States of America is certainly one that counters the OP’s contention.

In a bare two and a quarter centuries it has gone from an essentially unfunded and powerless advisory group, deliberately limited by its creators from any meaningful authority over its member governments, to an independent self directed civil and military power, able to enforce its whims both inside and outside of its borders.

Now, that may be many things, but it is not a “poorly run organization.” Government is the ultimate weapon, and its first priority is its own survival. In assuring their own survival, governments must first consolidate authority, then increase both the scope, and the size of their powers. Our government has been very successful in this regard. Efficiency is a measure of the relationship of effort required to results achieved. Confusing efficiency with a measure of benefits created in some way is delusional. That has never been the purpose of any government, merely the fuel it must obtain to gain its power. Even then the perception of benefit is the only really essential element, actual benefit is not even particularly desirable, since it requires far greater, and more sustained effort. Perception is much easier to obtain, and can be sustained thereafter with almost no effort aside from rhetoric.

Tris

30

Governments are chaotic and disorganized because they’re answerable to millions of people who all have different opinions about what they want their government to do.

31

“Poorly run” is not so easy to define. The government often has a monopoly on the activities relegated to it, and we allow that because there are some things that need to be a monopoly-- like the police force. It would be very difficult to have a civil society with a bunch of private militias out there keeping order for whatever faction that happened to pay them. Witness Iraq.

But monopolies lack competition, and so they tend to be slow to change and often slow to respond to the needs of the customers. People can leave the country if they are really dissatisfied, but that’s a pretty drastic step to take. To a certain extent we just have to recognize that the government isn’t going to be as efficient as, say, WalMart, and that isn’t necessarily a bad thing. But it should give us pause as to exactly which functions we want to turn over to the government. It should also give us pause as to how to allocate certain governmental functions between the federal, state, and local level. The more removed the function is from the people it is supposed to serve, the less likely it is going to be properly responsive to those people.

32

[QUOTE=Mrs. Cake]

Governments are no different from businesses - the larger they are, the slower and more wastefully they are run due to the number of layers of bureaucracy required.
[/QUOTE]

Governments are very different from large businesses in several key ways:

-Size - As someone already mentioned, governments operate on a scale orders of magnitude larger than the largest businesses.

-Unlike a business, the government is a closed system - The government cannot selectively govern the population. Businesses can pick and choose which markets they wish to service. For example, a private school is a business. They can be selective about which students they want to educate. They don’t need to concern themselves with students who aren’t their customers. The government needs to work out how it’s going to educate all it’s citizens or it will need to work out the consequences of not doing so.

-Authority - By definition, the government is the law of the land. In spite of what some people might think, a business still has to answer to the laws of the environment in which it operates. The government can define it’s own environment and therefore needs checks and balances to avoid abuses.

33

Mrs. Cake has the right of it. Governments aren’t any different from businesses in how they operate. We all have stories about terrible service at various businesses or wastefulness and excess. The difference is that businesses operate under natural selection. Those that are too wasteful (without producing anything to offset this) go under. Governments don’t, unless they fall to revolution or something. There is a lot more wiggle room for them.

Sam Stone ignores the role of elections when he says that businesses must justify their decisions but not so governments. People get thrown out of office all the time for making stupid decisions. In the case of bureaucrats, like, say, Heck-of-a-Job-Brownie, they get thrown out by those who are accountable to the voters.

In sum, I disagree with the assertion that governments are intrinsically poorly run. That said, can greater efficiency be achieved? Probably, though I’m uncertain how.

34

…both are inefficient, because the lack of competition means there is no check on their actions. take education: the eductaion monopoly equates new schools with high-quality education. That is why we spend billions on new schools, yet the actual quality of the education provided continually declines. And it helps that the construction lobby likes contracts for new schools.

35

[QUOTE=acsenray]
Because all large organizations are poorly run.

The question is, is it really a bad thing?
[/QUOTE]

I agree that generally the larger an organization the more difficult to run it efficiently.

But large organizations can turn themselves around. They can also go under… not always a bad thing.

Large businesses often merge and make difficult choice to “trim the fat”. Not a good thing if you ar part of the fat… I’ll give you that.

When was the last time a governmental agency got smaller?

36

Originally Posted by Chief Pedant:
It will eventually bloat to the point where no actual services are rendered and it will then collapse. This is more or less the history of every such structure that has not been collapsed externally.

[QUOTE=Der Trihs]
Huh ? Examples ? I can’t recall a single example of that happening, much less it being normal.
[/QUOTE]

Would you accept the Soviet Union as the most recent spectacular internal collapse of an inefficient government unable to deliver services?
I don’t want to hijack the OP for a snide editorial comment I made, but given the history of civilization, the long-term survival of political governments is unusual. While the proximate reason is often external, the internal reasons that led to them being weak enough to be collapsible are, in my opinion, related to the inevitable tendency of bureaucracies to bloat and decay from their original mission.
So as not to hijack the thread, I’ll leave any follow-up comments you make alone. To the point of whether it will happen to the US, let’s pick it up again in 25 years.

37

[QUOTE=Chief Pedant]
Would you accept the Soviet Union as the most recent spectacular internal collapse of an inefficient government unable to deliver services?
[/QUOTE]
Since the Soviet Union is a tool that the Right likes to beat people over the head with while screaming “GOVERNMENT BAD ! BAD !”, no I won’t. The Soviet Union collapsed because it was Communist, and overambitious. It doesn’t demonstrate some inevitable tendency of governments to collapse, which is why so many governments outlasted it.

You are making the same error Sam Stone did, deliberately or otherwise. You are pretending that “government” and “totalitarian Communism”, in this case the USSR, are the same thing.

[QUOTE=Chief Pedant]
So as not to hijack the thread, I’ll leave any follow-up comments you make alone.
[/QUOTE]
In other words, you are wrong and know it.

38

[QUOTE=What the … !!!]
Agreed?

If so … why?

What steps could be taken to make the federal governement more efficient and less wasteful? Things a politician could run on and put in place in four years.
[/QUOTE]

  1. A line item veto so that a Bill which is acceptable overall could not be used as a cover for private interests.
  2. Plain language for items buried in bills. This sort of shenanigan, done for the PGA Tour in this case:
    *"On page 598 of the 650-page bill, at the end of a section designed to limit the use of corporate “deferred compensation” plans, is an exemption for any plan “established or maintained by an organization incorporated on July 2, 1974.” * (The PGA Tour was, of course, the only organization meeting that criterion, and it stands as the single most egregious example of treating pensions for the wealthy differently.) The least expectation is to simply name “The PGA Tour” and let it stand out for the special treatment it got.
  3. No earmarks. None.
  4. Budgets are a percentage of tax revenue, not a fixed dollar amount
  5. Move toward making it the Federal Government’s job to redistribute money, but the local government’s job to oversee it. If West Virginia’s school system gets $100M in Federal money, it should be WV’s job to decide how to spend it.
  6. Unless money needs to be redistributed, leave the Feds out of it altogether. For example, the only money the Feds control for schools is money that’s being redistributed from rich states to poorer ones, and the federal structure is a minimalist pass-through structure.

Stop pulling my chain, DT. My New Year’s gift to you is leaving your smug comment (mostly) alone. Happy New Year

39

[QUOTE=Chief Pedant]
5. Move toward making it the Federal Government’s job to redistribute money, but the local government’s job to oversee it. If West Virginia’s school system gets $100M in Federal money, it should be WV’s job to decide how to spend it.

[/QUOTE]
I agree with most of what you said, but screw #5. If my federal taxes are going to another state I want to have a say in how it’s spent.

40

[QUOTE=Sam Stone]
Governments are very different from large businesses. Large businesses have to justify every decision they make to their shareholders, and as a result every manager up and down the chain has to justify his/her decisions to the next manager up the line. There is intensive scrutiny on all decisions all the time.

[/quote]

Wow, this is an amazingly naive statement. If the results of a decision result in a disaster, then, maybe, the CEO will get fired. Most decisions in a company are made at lower levels, and stockholders never see them. I assume you own stock - has a company ever run its decision by you? If you owned 10% or more of a company, then maybe. But there are plenty of CEOs out there, with tame boards, who are basically immune from stockholders except in extreme cases. Why do you think that a CEO getting fired, like Merrill Lynch, makes headlines? And again, that was due to poor results.

We’ve discovered that balanced budgets are not necessarily good things. You’re talking at the very highest level, lets talk about at the lower levels. I travel for my company, but for grant reviews I travel for the US government. I don’t see much of a difference. I know government per diem requirements are much stricter than my company’s requirements. I used to deal with Sandia when it was run by Bell Labs under government regulations when I was working for Bell Labs. We were a lot freer to spend money than they were. I’ve also know old timers in industry who were far from stingy with company money.

The only place where government is wasteful that I see is that it can’t carry over money, or make a profit, so there is an incentive to spend your budget. But if the purpose is to help people or get a job done, that might be good.

So, the possibility of a politician losing his job in an election every two or four or six years is less of an incentive to be efficient than a CEO who is pretty much set for life assuming he doesn’t screw up?

If you think there is no corruption or inefficiency in business, you must never have gone near a big company. Remember the bubble, where businesses spent like drunken sailors? Governments (usually state or local) under budget crunches are very efficient. Less so when you print money, I agree, but that is a very specific case.