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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Altruism and the Politics of Public Sector Efficiency



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Might insights regarding how we think about charity, which we’ve just discussed in the context of a new article by Leon Neyfakh, relate to how we think about advocating for redistribution? A couple of questions come to mind:

(a) How often are arguments for redistribution made out of social pressure or as an act of symbolic exclusion? (i) I don’t want to be the only person in my circle who doesn’t want to raise taxes on households earning over $250,000 a year or (ii) I don’t want to be associated with the kind of people I imagine embrace anti-tax arguments, e.g., people I assume to ignorant, less-sophisticated than myself, greedy, uncool banker-types, etc. 

(b) How do people feel about achieving greater efficiency in public services? It could be that voters don’t actually want public services to be more efficient if it means that “people like them” — in the case of the median U.S. voter, a middle-aged non-Hispanic white person in a middle-income household — might have to be compensated in a manner more closely tied to productivity, and if there will be a large number of redundancies as public sector teams grow more efficient. This might explain the results in Ohio’s SB 5 fight. This is despite the fact that states that have had collective bargaining reform might become much less likely to shed public sector workers than those that have not as the cost of fringe benefits and inefficiencies in deploying staff become unmanageable. As Neyfakh describes the findings of Penn psychologist Jonathan Baron, “What mattered to them was seeing more of their own money at work, Baron concluded, rather than the amount of good it did.” 

This could help explain why those we might call rationalistic neoliberals, like Matthew Yglesias of Slate, have a hard time convincing their political allies that the public sector should devote itself to delivering high-quality public services rather than to providing high-quality public sector jobs for workers who might have a difficult time finding similarly attractive employment terms outside of the public sector. 

In my view, this represents an opportunity and also a significant failure on the part of the right: it is actually possible that those we might call gut-instinct liberals are just not that interested in making the public sector work better, which is to say to make it much more efficient. They seem to mainly want it to be bigger and for it to intend to do good stuff, whether or not it is actually cost-effective at doing good stuff. Taxes, meanwhile, are increasingly seen not so much as unfortunate necessity to finance essential government function but as an affirmative means to redress inequalities in earnings and holdings and, in some cases, to punish a class of high-earners who’ve been identified as cheaters. Well-designed financial system reforms that mitigate cheating, understood broadly as the privatization of risk and the socialization of profit, might, as I’ve suggested, actually intensify inequalities in earnings and holdings. So taxes must serve a separate punitive function.  

Consider the following from Thurgood Marshall Jr. and Paul Weinstein Jr. in a recent Politico op-ed:

Democrats need to focus on one thing: ensuring that no one mislabels them as the party that wants to bring back Big Government.

This will be a tall order — particularly considering the way conservatives will demagogue health care reform after next year’s Supreme Court decision. So Democrats ought to get to work now insulating themselves from the specious claim that they are the champions of unresponsive big bureaucracy.

How to do that? We ought to take a long look at one of the most successful, historic efforts to get Washington back into shape: the National Performance Review that Vice President Al Gore orchestrated during the Clinton years — known as the Reinventing Government initiative.

When Reinventing Government launched, Washington was facing record deficits, and the size of government was nearing its postwar high. It seemed nothing the federal government did went right — from launching the billion-dollar Hubble Telescope with a broken mirror, to paying $600 for toilet seats and $400 for hammers.

But Reinventing Government spurred Washington to get its act together. By the time the initiative was completed in 2001, the federal workforce had declined by 365,000 — the smallest since John F. Kennedy was president; 640,000 pages of internal agency rules were cut — equivalent to 125 cases of copy paper, and $136 billion in budget savings was achieved.

Another effect — probably under-appreciated in the ’96 election — was to thwart Republican efforts to paint the Clinton administration, erroneously, as the champion of expanded bureaucracy. After all, it’s hard to argue that the incumbent president is an advocate of Big Government when he’s stripped the waste out of government agencies that previous administrations, Republican and Democratic, had left bloated. So Reinventing Government proved not only a policy success but a political revelation. 

The authors believe that the Obama administration is picking up this thread. Given where the energy is in progressive politics — in the battles against collective bargaining reform, in calls by college students and university employees for larger tuition subsidies, and in intense, moralistic advocacy of a sharp increase in taxes on high-earners — it seems quite unlikely that Marshall and Weinstein are correct. 

Yet much of the right is not interested in taking up the cause of public sector reform, even if the upshot is that it will shrink the long-term spending burden. For a variety of reasons, many of them understandable, there is instead an intense, moralistic critique of government as such that is often undirected, imprecise, and alienating to persuadable voters. 

To achieve a right-sizing of federal, state, and local governments, we need a productivity revolution, local resource decentralization, and new strategies for imposing fiscal and organizational discipline on public sector firms. If you believe the 2011 Pew Typology Report, about 35 percent of registered voters are Staunch Conservatives, Main Street Republicans, and Libertarians, the groups we might consider friendly to this effort as those of us on the right understood it. The same can be said of only 29 percent of the general public. The right can only win so many battles with 35 percent of the electorate. Arguments from efficiency will probably not sway gut-instinct liberals. They might, however, secure the allegiance of the 14 percent of registered voters Pew identifies as “Post-Moderns,” which could be make or break. 



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