Tim, thought I would jump in to make a few points.
The simplest thing is to ask what is the proxy for market discipline in a public sector agency? And if one exists, how efficient is it likely to be? If there is no adequate proxy for market discipline, then it is inevitable that there will be redundancy in the work force and inefficient utilization of other resources. This is true, incidentally, in necessary areas of public service, like the military. The difference is that some things are worth doing, even if we have doubts about the level of efficiency, and some things might better be contracted out or dropped altogether.
If we look at an industry like steel, which was protected for a long time from competition, we see that protection led to feather- bedding and a lag in retooling. On the other hand, when Detroit started feeling serious competition from Japan, it began to shed redundant workers, negotiate more reasonable compensation, and retool factories for state of the art production.
Inherently, it would seem that government has a monopolistic/cartelistic immunity from competitive pressures. It is true that there may be legislative oversight, internal auditors, and the press, but there is not much to set the standard or the pace of improvement, it is all theoretical. What is state of the art in an industry is determined empirically, from advances in technological application and managerial decision- making dictated by the pressure to gain comparative advantage. When Detroit began losing out to Japan, it had to look to see what they were doing right, or what new things might be done to erase the advantage. Without that, the tendency is to preserve jobs, maintain accustomed practices, be skeptical of the value of technological investment, and to be complacent rather than making major managerial reviews and innovations.
Thus, one can have the best educated work force, and have everyone be personally busy and responsible, and yet have the organization lag in efficiency, productivity, and even elementary usefulness, when compared to standards prevailing in the private sector. And that seems, indeed, to be the case with the public sector........ |
