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Page 34

Certainly not all the best minds, nor all the best

people interested in quality output, are drawn into govern-

ment work.  In fact, the argument normally goes the opposite

way: the government has difficulty attracting good people.

In comparison with private enterprise, the government offers

lower pay, poorer amenities, increasingly unstable tenure,

and a terrible public image.

In addition to attracting different personnel, govern-

ment agencies differ from firms in the free market in that

they are more likely to be rewarded than punished for fail-

ures.  When government agencies fail, the typical response

from policymakers is that they were underfunded or did not

have sufficient powers.  The remedy is typically to increase

their budgets and augment their powers--in other words, to

reward their failures.

The U.S. Department of Agriculture and the 1997 Straw-

berries Scare.  In the spring of 1997, strawberries that

were contaminated with the virus that causes hepatitis A

were distributed to schoolchildren.  When the story broke,

the company that had originally shipped the strawberries was

blamed, its president quit, and its future was placed in

great doubt.

Meanwhile, the U.S. Department of Agriculture (USDA),

which is responsible for the school lunch program and which

distributed the strawberries to schools, paid no price for

its neglect.  Instead, calls for more USDA funding are the

likely outcome.

The contrast can hardly be more striking.  Companies in

the private sector pay for their mistakes.  Government agen-

cies are excused and often rewarded with more money.

The FDA Drug Approval Process.  As already mentioned,

drug manufacturers are permitted to pay money to the FDA so

the agency can hire additional personnel to review drug

applications.  FDA failure to meet its legislated mandates

to review drug applications in a timely manner made the

program necessary.

The "pay-for-review" program more appropriately allo-

cates the cost for drug review, placing it on the manufac-

turers rather than the taxpayers.  But it preserves the

FDA's monopoly.

The FDA Trial of Third-Party Review of Medical Devices.