The Eight Fundamental Flaws of the Government Provision of Public Services
We Do Better is concerned with optimizing the human outcomes delivered by our public services.
In most areas of life, to improve an outcome, we compare the available means of achieving it, and choose the best one.
Remarkably, however, when it comes to providing the services on which we all rely, we don’t do that.
When most people think of the provision of public services, they don’t think about the method that provides the best results or even the most services. Rather, they think about the method to which most resources are directed.
That method involves government agencies, funded by taxation.
It has eight fundamental flaws. From the first follow all the rest.
We do not get to choose how much money to give to government based on its efficiency, impact, or results. The same amount of money will be taken from us regardless and spent in ways that we cannot directly determine and cannot be quickly changed.
Guarantees perpetual revenue
Since we have no choice in how much money government takes from us, government can and does receive at least the same amount of revenue every year. Therefore, it has no practical need or incentive to curb waste, spend wisely, or correct poor outcomes.
Massively concentrates money and power
Collecting money through coercion ensures that only a small number of people make decisions about how large amounts of our money is spent. This makes it worthwhile for special interests to seek favors from politicians, which is the essence of political corruption.
Disincentivizes quality in social services
Since we cannot send our tax money elsewhere, government does not have to maintain or increase the quality of its services to continue receiving revenue. Organizations that address human needs more effectively or efficiently than government agencies are frequently underfunded or never get funded at all. Moreover, this prevents us from fairly judging the effectiveness of government solutions against better solutions, and the quality of government solutions falls unchecked.
Does not respond to real-world outcomes
Since the collection of money is independent of the human consequences of how it is spent, there is no incentive to measure or respond to the outcomes of that spending. This money is spent in a manner that does not consider the individual circumstances of the people it affects, fails to deliver on intended outcomes, and has unintended consequences, all of which often go unmeasured.
Since government has perpetual revenue, it has no incentive to minimize waste. Most organizations have to minimize waste to provide quality services with limited resources, because they must compete with other organizations for revenue. Since government has no need to minimize waste, it can and does continually add red tape, bureaucracy and middlemen that do not contribute to better outcomes from its services.
We cannot vote with our tax dollars, we have no direct say in how our money is spent, and we cannot direct it anywhere else if promised outcomes are not delivered. We cannot keep government accountable by directing our money to more effective means, therefore, the mechanism of accountability that we rely on everywhere else is missing.
Makes us less likely to act on our compassion
Since government revenue is taken coercively, it makes us less likely to give to human needs our tax dollars are supposed to be funding. When money is taken coercively, we lose the gift of giving, and it reduces our resources to meet human needs otherwise. This also gives us the false impression that our responsibilities to each other are already being met, diminishing our incentive to meet the needs of others.
It’s important to understand the advantages and disadvantages of the various ways we provide public services, because only then can we effectively discuss – let alone choose – the ones that provide the best human outcomes.