Government inefficiency is not a metaphysical mystery nor an ideological incantation. It originates in two causes: the incentives of politicians and bureaucrats; and the need to constrain the capabilities of these government actors lest they become a full-fledged Leviathan. If one includes this last requirement, constrained government is efficient at a superior level, because tyranny is worse than inefficiency. Efficiency in a narrow economic sense requires entrepreneurship and discretion; in the case of government, this means arbitrary power.
Whoever said something like “fortunately we don’t have the government we pay for” was right. (The aphorism has been attributed to many sources, but my friend and co-blogger David Henderson thinks the original author was Charles “Boss” Kettering, the head of GM.)
This becomes more obvious as government power grows. On the one hand, more power means more opportunities to abuse it, that is, to use it in ways that certain citizens love but that harm other citizens; in other words, more state power means more official discrimination against certain citizens. On the other hand, the more power needs to be (hopefully) constrained, the most likely that Leviathan will be unable to supply simple public services in acceptable quality.
A column in the Wall Street Journal just gave a good illustration. Laura Saunders, a Wall Street Journal columnist who happened to have a tax issue with the IRS, recounts her recent adventures (“The Saturday I Spent Five-and-a-Half Hours in Line Waiting for the IRS,” Wall Street Journal, May 20, 2022). A taxpayer must make an appointment to meet an IRS bureaucrat, but there is no way to do it online and only 10% of phone callers get through. The alternative is a walk-in, only available on certain days and at certain places (by now, no walk-in days are available for the rest of 2022). From 8:30 in the morning on May 14, Mrs. Saunders waited in line for five hours and a half, mostly in a queue that stretched one block outside the building. Only five bureaucrats were assigned to that waiting line. One of Saunders’ companions in the queue, with whom she had exchanged email addresses, tested positive for Covid the next day…
A broader but certainly related question is how, ceteris paribus, a minimum level of decency, morality, propriety is encouraged or discouraged by different political regimes.
READER COMMENTS
Jon Murphy
May 25 2022 at 4:55pm
It reminds me of a similar variation by Eugene McCarthy: “The only thing that saves us from the bureaucracy is its inefficiency.”
nobody.really
May 25 2022 at 5:07pm
1: The poor IRS–and I mean that in every sense–has been a political whipping-boy for the GOP since forever. The party that will clutch its pearls if anyone sez “defund the police” is happy to defund the agency designed to police tax compliance. And thus we all must endure what your friend had to endure.
2: On government inefficiency in general: Yes, often its a feature, not a bug. A bi-cameral legislature and laws governing administrative procedure are designed to make laws hard to pass, and to limit discretion in implementation.
I have occasionally recommended policy “unbundling,” wherein unrelated policies should have to be passed and implemented independently. Some states have anti-logrolling laws that bar statutes addressing more than one topic. The goal is to ensure that each separate aspect of a policy would have to acquire majority assent on its own, without being packaged with unrelated policies. In other words, to prohibit legislators from putting two unpopular provisions together into a single bill in the hope that legislators who like the first provision will be able to tolerate the second provision and vice versa, thereby getting both provisions to pass.
But unbundling would be contrary to traditional norms of economics (wherein trading is encouraged) and actual political practice. In short, I expect that unbundling would make lawmaking even less efficient than it currently is–but might have countervailing benefits.
Pierre Lemieux
May 26 2022 at 2:33pm
nobody.really: You are likely aware that your argument in your last paragraph has received some weighty support from Buchanan and Tullock in The Calculus of Consent. The idea (as you say) is that vote trading would be efficient but that, since it is not allowed, the damage is minimized by logrolling. However, as Buchanan and Tullock point out, organized special interests can then impose great costs on individual voters. More fundamentally, any defendable form of vote trading presupposes constitutional limitations on what assemblies or voters can decide. Perhaps the Jews in Nazi Germany could not have successfully saved their liberties and their lives by trading their votes.
nobody.really
May 26 2022 at 11:47pm
I assure you, nobody.really is aware of this. At least, is aware of it now. Thanks for the tip.
Pierre Lemieux
May 27 2022 at 10:12am
nobody.really: You may want to have a look at my review of The Calculus of Consent.
vince
May 27 2022 at 5:33pm
“The party that will clutch its pearls if anyone sez “defund the police” is happy to defund the agency designed to police tax compliance.”
Comparing defund the police to funding for the IRS? How very partisan and elitist.
You probably believe just the GOP wants tax loopholes for the wealthy. Look up the Democrats and the SALT deduction.
Peter S
May 25 2022 at 5:35pm
It’s surprising that on Econlib the knowledge problem is also not listed as a problem for government.
Pierre Lemieux
May 27 2022 at 10:22am
Peter: You are right at one level. But I was only addressing the efficient inefficiencies of government; another example: https://www.youtube.com/watch?v=yTYa0nMmt-I
vince
May 25 2022 at 7:18pm
Inefficiency in the form of redundancy can be ok. Inefficiency in the form of lazy parasites who suck off taxpayer money to collect paychecks, benefits, pension and all sorts of goodies that no one in the private sector gets, hell no. Well, the private sector that isn’t parasitic; that is, subsidized and government protected.
Long waits at the IRS, and phone calls unanswered? Of course, the IRS is underfunded. How do we know? The IRS says so! Maybe someone should contact the IRS’s new Taxpayer Experience Office! And don’t bother learning English, the IRS can help you in 21 languages! And its spending its scarce resources on expanding to other languages too!!!
Watch them on Youtube! Facebook! Twitter! And more!!
Thomas Lee Hutcheson
May 25 2022 at 9:50pm
Congressional oversight committees should ask to see the cost benefit analyses of whatever decision they are questioning.
Pierre Lemieux
May 26 2022 at 2:16pm
Thomas: I don’t want to minimize your arguments, but, in responding to Monte just below, could we say that it depends if the benefits to those entertained are higher than the costs of those who pay for the show?
Monte
May 26 2022 at 11:52am
Absolutely! Government inefficiency is a very important part of our economy. It’s a very efficient employment multiplier and contributes in huge ways to the entertainment industry.
nobody.really
May 26 2022 at 11:45pm
You’re referring to shows such as “Yes, Minister” and late-night comics?
Monte
May 27 2022 at 2:43am
Yes, and a slew of others. Stand-up comics, SNL, Argus Hamilton, satirists, political cartoonists, ad infinitum. Our government is an an endless source of entertainment. Bittersweet, of course, because (as Pierre alludes to) the costs outweigh the benefits in most cases.
nobody.really
May 27 2022 at 9:39am
Ah, yes–a humor that reveals “shallow wit / When thousands weep more than did laugh at it.” But apparently Shakespeare was a fan.
Monte
May 27 2022 at 9:38pm
…and “Mirth cannot move a soul in agony.”
vince
May 26 2022 at 3:39pm
Yes, government inefficiency is good! Whistleblower reports infant formula problem to FDA in October. FDA finds the notification in February !!!
The result: babies are starving.
Matthias
May 28 2022 at 4:13am
The FDA is behind a lot of the import bans on foreign infant formula, alas.
Matthias
May 28 2022 at 4:23am
Just like the next guy, I’d rather pay less tax than more. But having said that, I never had any trouble with the tax people in my adopted home of Singapore.
All highly efficient and simple to deal with.
Pierre Lemieux
May 28 2022 at 3:00pm
Matthias: But doesn’t the case of Singapore confirm my point? It is apparently much, much better not to get cross with their government–for example, by saying something they don’t like?
Comments are closed.