“You get what you pay for” tends to be an accurate assessment. A pricey Cadillac is generally superior to its Chevrolet brethren; a steak at Outback probably tastes better than one at Sizzler; and your fancy Nike sneakers are more comfortable and durable than the generic ones at K‐mart.
But the saying does not always hold true. Government programs typically offer subpar service regardless of how well funded. Think of education spending, where there is no correlation between per‐pupil expenditures and student performance. Or the folks at the Internal Revenue Service, which provides you incorrect advice 35 percent of the time regardless whether you owe the government $2 or $20,000.
Does it have to be this way? Can government agencies perform as efficiently as for‐profit businesses?
The folks at the U.S. Office of Management and Budget think so. In fact, this week they launched a new Web site, ExpectMore.gov, to highlight efficiency (and inefficiency) in all federal programs. It’s a noble effort that could help taxpayers better understand public spending.
The great irony of ExpectMore.gov is that much of our government’s excess and bureaucratic inefficiency is attributable to those who consistently expect more from the federal government. Too many people believe that, to paraphrase the “Daily Show,” when news breaks Congress should fix it. The result is new bureaucracy piled on top of old inefficient layers of bureaucracy.
The Sarbanes‐Oxley Act of 2002 provides a telling case study. When the Enron scandal hit the news, Congress hurriedly responded with this new law: a burdensome set of regulations many experts believe does not actually improve audit quality or enhance firm performance.
The market had already severely punished Enron before Congress held a single hearing. The market also pushed Arthur Andersen to the brink of bankruptcy for its role in the scandal. But the Securities & Exchange Commission — which ignored possible warning signs at Enron for nine years — was rewarded with more funding and sophisticated new job functions. If the reward for failure is a bigger budget and more power, what is the incentive to operate efficiently?
High gasoline prices and public discontent with paying more will probably give us another example of a failed government initiative. To “solve” this public crisis, President Bush has again bought into the false correlation between funding and efficiency. During his recent State of the Union address, he pledged a 22 percent funding increase for clean energy technologies, which would include $65 million more for solar energy and $59 million more for biomass energy.
The pursuit of cheap, clean energy is an admirable goal — but it has been pursued by Washington for nearly 30 years, and to little benefit. The federal government spent more than $20 billion from 1978 to 2004 to increase the use of clean energy, but our renewable energy consumption has actually fallen from 6.3 to 6.1 percent of total domestic energy consumption.
Few policymakers feel any need to question either the success of this program or its worthiness. When they do, they usually only hear from the bureaucrats who benefit from more funding.
Before carrying out knee‐jerk responses to the public’s concern du jour, policymakers should consider the existence and effectiveness of current programs, the necessity of federal involvement, and the economic effect of a larger, more powerful government. The public can do its part by not consistently expecting more from government so government can respond to problems that it can and should solve.
The OMB’s ExpectMore.gov Web site is well‐meant, but it won’t make much difference. Government failure should be punished because no amount of oversight, transparency or increased funding will ever prompt bureaucrats at the Department of Alchemy to turn lead into gold.