Activities vs. Results

Edward Glaeser writes,

The U.S. has six large programs — Temporary Assistance for Needy Families, Medicaid, food stamps, housing vouchers, unemployment insurance and the earned-income tax credit — spread across four Cabinet departments and the Internal Revenue Service.

Pointer from Reihan Salam. Salam also recommends an essay by Steven Teles on kludgeocracy.

Unfortunately, this is not an accident. There is a tendency in all organizations to focus on activities rather than results. Every program represents an activity. Managers of an activity seek to perpetuate and expand their domains.

Activities are easy to measure. The impact on results is difficult to quantify. Think tanks report on how many op-eds their scholars publish. How many think tanks report on their impact on results?

Corporations are often the victims of activity-centered thinking. Activities acquire a momentum of their own. One thing that management consultants do is challenge the mindset and power of departmental managers who focus on activities rather than results.

Fortunately, corporations face market constraints and competition. These forces serve to weed out mindless activities and re-focus attention on results. In government, those checks are missing. Thus, it is almost inevitable that government programs will be perpetuated without regard to results. That is the natural behavior in organizations, and only if there are countervailing forces will that natural behavior be overcome.

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5 Responses to Activities vs. Results

  1. Joe Cushing says:

    I’m assuming that one goal of this blog is to do a tiny part increase the level of freedom in the world so as to improve the lot for mankind, through educating us about freedom in economics. That seems to be what many of your posts have been about throughout the several years I have been reading them.

    “Fortunately, corporations face market constraints and competition. These forces serve to weed out mindless activities and re-focus attention on results. In government, those checks are missing. Thus, it is almost inevitable that government programs will be perpetuated without regard to results.”

    This is a very cleansed way of saying that corporations get their money by satisfying costumers in a voluntary relationship. Part of the definition of that satisfaction is based on what the costumer can find from other competing businesses. Governments, on the other hand, get their money by force. Pay your taxes or the men with guns show up at your door to put you in a cage. Resist them and you will be shot dead. The government also has little to no competitors in most cases. The government either outlaws competition with it or because it takes the money to operate by force, there is no or at least less money handed to the government at the time of service.

    I think it’s important that every time we mention the guns of the government that we use the word gun or at least the word force or coercion. We are never going to make significant change in society by pointing out that things would work a bit better if they were done by private individuals. The US government has grown by several factors since the foundation of the Libertarian party, 40 years ago. These quaint pragmatic arguments simply don’t work and the evidence shows it. There is nothing wrong with a pragmatic argument but at least include the moral argument against using force to pay for services….if you don’t want to include a moral argument, at least point out that the force / coercion exists. There is a bias against force already in nearly all people, so by pointing out the force, the argument is implied.

    Rewritten:

    Fortunately, corporations resources come from voluntary relationships and therefore face market constraints and competition. These forces serve to weed out mindless activities and re-focus attention on results. In government, resources come from coercive relationships and therefore those checks are missing. Thus, it is almost inevitable that government programs will be perpetuated without regard to results.

    • wophugus says:

      Voluntary relationships? If I try to take a car the government thinks is owned by a corporation I will be stopped with force, regardless of what I have volunteered for. If I try to wriggle out of a K with a corporation I will be forced to give them the benefit of the bargain, but if I try to wriggle out of a promise to a corporation that is fine. If I contract for a sale of goods with a corporation specifying only quantity, a court will read in terms for price, time of delivery, etc and force me to abide by its new terms. If a corporate executive is self dealing, a shareholder can force him to stop. If I owe a corporation money it has no recourse except through lengthy litigation. If the corporation secured the loan, however, they can take the collateral and I can’t use force to stop them. If I am on my own land minding my own business by building a pile of oily rags to the Rag God, a corporation can sue me for negligence if the rags ignite and burn down their adjoining property. Etc. I volunteered for none of thus, it completely defines my relationship to every corporation I deal with in the free market, and it is very much backed by government force.

      There is no voluntary. There is voluntary within the rules, and the rules are not (in practice) defined by libertarian philosophy or our moral sense (alone) or our legislatures (alone) or judges (alone) or God’s will. They are defined by what the government will force people to do.

      ***

      “Thus, it is almost inevitable that government programs will be perpetuated without regard to results. That is the natural behavior in organizations, and only if there are countervailing forces will that natural behavior be overcome.”

      If you don’t think there is a single countervailing force to government wallowing in mindless, wasteful activity, you need to actually study history a bit. Government can get away with *more* wasteful activity than private business (quite a lot more, maybe), but it certainly cannot get away with an *infinity* of it. Useless, unpopular, and incredibly inefficient programs do, with time, tend to get cut or reformed. Popular programs usually aren’t useless or incredibly inefficient.

      The sad truth is, government hasn’t expanded because of some irresistible law of public choice. Plenty of unpopular and stupid things have been done away with or altered (Airline regulation, the draft, pre-reformed welfare, pre-thatcherite government intervention in the British economy, etc). Government has expanded because expanded government is popular, not because it doesn’t have to answer to a populace that secretly hates it. If the big stuff has stuck around it’s because people like having a welfare state and (in the US) like having a big army, not because dull institutional inertia is preserving all these terrible programs.

      Short version: you’ve correctly identified a problem with government but overstated its severity.

      • Joe Cushing says:

        Often governments have expanded until collapse. Collapse seems to be the only hard restraint on the ability of a government to be wasteful. Collapse is a true, unstoppable, check on government power.

        • wophugus says:

          I don’t understand what you mean by “hard restraint.” Often government expands until collapse, yes, but often it doesn’t. Some governments get so big and wasteful they are invaded and destroyed by outside forces (Ottoman Empire), some governments get so big and wasteful they collapse internally (ancien regime), some governments get so big and wasteful they dissolve into constituent parts (USSR) or join a larger whole (GDR), some governments get so big and wasteful they initiate successful reforms that either reduce waste (thatcher) or size (Latvia in the great recession), some governments never get appreciably more wasteful over time and end for other reasons (I would argue Scottish government got less wasteful over the centuries long buildup to the act of union), and some governments don’t get much bigger over time and end for other reasons (Imperial Roman spending was basically defense spending, and the fourth century army cost about a third as much as the second century army. Since there isn’t much evidence that GDP cratered by a factor of 3, government spending as a percent of GDP probably fell over the last two centuries of the western empire). None of those outcomes are inevitable. Why is one possible but not inevitable outcome out of many the “hard restraint?” And why is it “almost inevitable that government programs will be perpetuated without regard to results?”

          I will agree that all these historical comparisons might be useless. Modern first world states tend to spend more on government over time. But 1. there are explanations for that trend competing against political economy explanations (namely that as people get richer they want to do more income distribution. Growing government is a deliberate choice) and 2. that process is still playing out, and no one knows if it will end in collapse, reform, government spending leveling off, alien invasion, or any number of possible outcomes. We only have history as our guide, and history shows that government’s do not inevitably get bigger and more inefficient until they collapse.

  2. mike shupp says:

    Tell you what, get together a batch of active college Young Republicans or a group of 40-ish libertarians, and tell them we need to take “Temporary Assistance for Needy Families, Medicaid, food stamps, housing vouchers, unemployment insurance and the earned-income tax credit” and combine them in just one or two agencies and bring enrollment and disbursement policies up to 21st century standards.

    You might not get out of the room alive. Conservatives don’t want these programs to be better administered; they want them DEAD, and they are not eager to consider pallative measures on the the way to the cemetary. And no, they don’t want to wait 20 years for the blessed event — it’s bad enough waiting from election to election for God to make things right.

    You see the problem. Liberals can tinker. Liberals can experiment. Liberals can reform. Conservatives are incapable of governing because of their hatred of govenment. (Granted, working politicians are likely more flexible, but they have to answer to ideal-driven constituents.)

    That strikes me as the chief reason the US government is a “kludgeocracy”, and I see no hope for change.

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