5.2 Efficiency and Government

During my government career, I was a part of many project teams. Even though few career government employees are overtly vocal about their political beliefs, I knew that there were liberals, conservatives, and moderates on our teams, and that they had different value systems and beliefs that could be a barrier to teamwork. I thought it was worthwhile to address the team members’ differences by finding common ground. One way I attempted to bring those on the left, right and middle together was by saying that whether we believed in big government or small government, we could all agree on making government more efficient. No one ever disagreed, but, in hindsight, I was quite naïve. I was not wrong about universal agreement on efficiency, and agreeing on efficiency was a good team building exercise. No one in government is opposed to efficiency, but, neither, it must be pointed out, are they opposed to flower gardening, golf, or mountain climbing. They are all nice hobbies and all might be useful in building cohesive teams. What I was wrong about is my underlying presupposition that government itself benefits from and wants efficiency.

Imagine you are running a company making widgets and you are selling widgets as fast as you can make them. If you want to make more money, then it is pretty obvious that you need to make widgets as efficiently as possible and that making more widgets will make more money. If you determine that your company is pretty efficient and that the best way to make more widgets would be to hire more workers, then you would hire more workers. You would track the productivity and efficiency of your workers because they determine your company’s profitability and continued existence.

Now imagine that you have moved on and are now the manager in a government department. Your office has been given some new responsibilities. Based on your previous experience in the widget business you might ask yourself, “How do I determine whether the office can absorb the new responsibilities (through increased efficiency), or do we need to hire more staff?” Those questions are the kinds of questions you might ask in the widget company, but they are not particularly relevant to a government manager. In reality, the only time that a government office can create new positions is when it gets more funding. Funding is not directly based on the product or services being delivered by the office. One office may not have any measurable output, while another office may be chronically understaffed and overwhelmed with a backlog of work. Funding is based on what was spent in the past, plus what can be justified in addition to past funding. Adding to the complexity, government offices usually get funding that is “fenced” for specific purposes. (For example, Information Technology software and hardware funds cannot be used to build a building, buy furniture, or hire someone.) You, a quick learning and ambitious government manager, have kept some untapped capacity in your office so that you can take on some new responsibilities. Further, you realize that these added responsibilities are pretty visible and could be used to justify additional funds; after all, you have used up the capacity you had been holding in reserve and you know that an opportunity to get additional funding is rare. Even if hiring more staff is not possible, you might decide to use the opportunity to request more printers, replacement furniture, bonuses, or more space.

From the perspective of a government manager, a certain amount of inefficiency is highly desirable because it gives the office the ability to respond to new demands, and allows the office to devote resources to justifying its existence and lobbying for more funding. If you are a manager inside government and you get the opportunity to create a new position, you seize the opportunity. These opportunities often come as a result of a crisis or scandal. If you are a government manager you never want to let a scandal go to waste. There are managers in government who do want to be efficient and who expect their staff to work hard, but if they are to be successful they have to recognize that government is fundamentally different than a for-profit company. Those who say that government should be run like a business, do not understand the differences between the two.

Managers working in a business may also value having some excess capacity and inefficiency for many of the same reasons a government manager does. The difference is that a business manager still must cover his costs and make a profit. A government manager does not. The people inside government are no different from people inside companies. They are working to earn money and they need their employer to be successful so they do get paid for their work. In a company, profit means the company will continue to exist and that means good things for employees. In government there is no such thing as profit. The continued existence of government depends on maintaining and increasing the total amount of incoming funds. Increased funding means the same things as increased profits do in a business. While inefficiency is always a threat to a company’s profit and, therefore, its very existence, inefficiency is not a direct threat to the existence of government. In fact the opposite is true, inefficiency is inherent in government. Efficiency is important in government, but only indirectly to the extent it affects the government’s ability to maintain and increase funding. A loss of funding is the only threat to government.

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